Creating Shared Value and meeting our commitments Progress Report 2019 Nestlé. Enhancing quality of life and contributing to a healthier future. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 02

Global Compact LEAD company in recognition Last year, we also committed to achieve zero 03 Creating Shared Value A message from our of our ongoing commitment to achieving the net greenhouse gas emissions by 2050, UN Sustainable Development Goals (SDGs). stepping up our climate change mitigation 05 Our 2020 commitments efforts and embracing the most ambitious and progress Chairman and CEO This report provides a detailed overview of aim of the Paris Agreement. Among other how Nestlé is making a difference across our 06 For individuals and families measures, we are expanding our range of Nestlé. Enhancing quality of three impact areas – individuals and families, plant-based food options that have a better 07 Offering tastier and communities and the planet. life and contributing to a environmental footprint and can contribute to healthier choices healthier future. In early 2019, we accelerated actions to a balanced diet. 13 Inspiring people to lead tackle plastic waste and make good on our Our work extends beyond the environment. healthier lives Creating Shared Value lies at the very heart of ambition to make 100% of our packaging We also announced a new gender-neutral how we do business at Nestlé. Our approach is recyclable or reusable by 2025. We more 21 Building, sharing and parental leave and support policy for our built on the conviction that business can be a recently announced an investment of up to applying nutrition employees, as part of our broader efforts to force for good, by simultaneously creating CHF 2 billion to boost the market for food- knowledge support diversity and inclusion. Our aim is to value for shareholders and for society at large. grade recycled plastics and to accelerate the support families and help provide children 24 For our communities development of innovative sustainable In 2019, we reaffirmed our support for the UN with the best start in life. packaging solutions. 25 Enhancing rural Global Compact. We were again named a In this report, you will find more details about development and livelihoods our progress as a company in the areas where 31 Respecting and promoting we can make the biggest impact. The work human rights carried out during 2019 brought us closer to fulfilling our 2020 commitments. We are on 36 Promoting decent track to meet most of them and we will employment and diversity continue to work hard to achieve the others. 40 For the planet We look back on the work achieved over the 41 Caring for water last decade with pride. Looking ahead, we remain as committed as ever to Creating 46 Acting on climate change Shared Value in 2020 and beyond. 49 Safeguarding the environment 55 Reporting and governance 56 About this report Paul Bulcke U. Mark Schneider 57 Independent assurance Chairman Chief Executive Officer statement 58 Our key performance indicators Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 03

In order to achieve these ambitions, we have Creating Shared Value formulated a series of public commitments that we operationalize across our business. Creating Shared Value (CSV) We report on our progress every year. Particular emphasis is on global initiatives to is fundamental to how we do promote healthier lives for children, help business at Nestlé. We believe young people access economic opportunities that our company can only be and demonstrate our protection of water successful in the long term resources. We also act decisively to tackle the current plastic pollution challenge and are by creating value both for our working to become carbon neutral. shareholders and for society. Measuring shared value Our activities and products We continue to explore ways to better should make a positive difference measure our impact and the shared value to society while contributing to we create. Our goal is to invest with greater Nestlé’s ongoing success. confidence and continue to build trust with stakeholders by demonstrating tangible results. We welcome work in this area so The business case for Creating that it can inform our own methodology Shared Value and stimulate further debate on this important topic. Creating Shared Value is about ensuring long-term sustainable value creation for Read more about CSV shareholders while tackling societal issues at the same time. Companies that create shared Read more about our reporting and governance value demonstrate that business can be a force for good. We focus our work on three interconnected impact areas: the individuals and families who place their trust in our products and brands; the communities where we operate; and the planet. We are driven by our purpose to enhance quality of life and contribute to a healthier future. Our 2030 ambitions are: • For individuals and families, to help 50 million children lead healthier lives. • For our communities, to improve 30 million livelihoods in communities directly connected to our business activities. • For the planet, to strive for zero environmental impact in our operations. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 04

Our 2018 materiality assessment materiality assessment integrated with the Enterprise Risk Management process, Focusing on our In 2018, the materiality process was evolved harnessed the perspectives of mainstream to bring both non-financial and financial risk investors, and engaged with key markets and material issues identification together and to connect it more growth categories. closely to business operations. In addition to Trends affecting our industry identifying and prioritizing issues from The food and beverage industry is impacted internal and external stakeholders, the 2018 by a range of trends. Changes in consumer tastes and a growing interest in personalized Nestlé materiality matrix (as assessed in 2018) nutrition are transforming how we develop our product portfolio. As knowledge about the impact of plastic pollution grows, we must Natural resource and water stewardship Supply chain stewardship continue to investigate alternative materials Climate change Over- and under-nutrition and delivery systems. The scale and complexity of our global supply chain present an increased risk of human rights abuses. Major Therefore, we work hard to ensure our standards and policies are upheld. To determine which global trends have the biggest impact for Nestlé, we regularly Food and product safety conduct a thorough materiality analysis. Women’s empowerment Rural development and poverty alleviation Community relations Human rights Changing consumer demographics and trends Business ethics Product packaging and plastic The materiality process Responsible marketing and influence Our comprehensive materiality analysis is Product quality carried out every two years. This helps us Food and nutrition security Significant Resource eciency, (food) waste and to identify the economic, social and the circular economy environmental issues that matter most Land management in the supply chain to our business and our stakeholders.

Conducting a thorough analysis in this Importance to stakeholders Animal welfare Product regulation and taxation way helps to identify issues to be covered Employee safety, health and wellness Geopolitical uncertainty in our reporting and to decide where to Decent employment and equal opportunities Responsible use of technology focus our internal resources. Data privacy and cyber security Moderate

Moderate Significant Major

Impact on Nestlé’s success

For individuals and families For our communities For the planet

Note: Natural disasters, identified as an issue relevant to Nestlé, fell under the negligible category and so has been omitted from our materiality matrix Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 05

Status of our commitments Our 2020 commitments and progress New In progress Achieved

For individuals and families For our communities For the planet Enabling healthier and happier lives Helping develop thriving, resilient communities Stewarding resources and the environment

Our 2030 ambition is to help 50 million children lead Our 2030 ambition is to improve 30 million livelihoods in Our 2030 ambition is to strive for zero environmental healthier lives communities directly connected to our business activities impact in our operations

Offering tastier and Inspiring people to Building, sharing and Enhancing rural Respecting and Promoting decent Caring for water Acting on Safeguarding healthier choices lead healthier lives applying nutrition development and promoting employment climate change the environment knowledge livelihoods human rights and diversity

Launch more foods Apply and explain Build and share Improve farm Assess and address Roll out our Nestlé Work to achieve Provide climate Improve the and beverages that are nutrition information on nutrition knowledge from economics among the human rights impacts needs YOUth initiative water efficiency and change leadership environmental nutritious, especially for packs, at point-of-sale the first 1000 days farmers who supply us across our business across all our operations sustainability across our performance of mothers-to-be, new and online through to healthy aging activities operations Promote our packaging mothers, and infants and Improve food Enhance gender transparency and children Offer guidance on Build biomedical availability and dietary Improve workers’ balance in our workforce Advocate for proactive, long-term Reduce food loss portions for our products science leading to diversity among the livelihoods and protect and empower women effective water policies engagement in and waste Further decrease health-promoting farmers who supply us children in our agricultural across the entire value and stewardship climate policy sugars, sodium and Leverage our products, personalized supply chain chain Provide meaningful saturated fat marketing efforts to nutrition and digital Implement Engage with and accurate promote healthy cooking, solutions responsible sourcing in Enhance a culture of Advocate for healthy suppliers, especially environmental Increase vegetables, eating and lifestyles our supply chain and integrity across the workplaces and healthier those in agriculture information and dialogue fiber-rich grains, pulses, promote animal welfare organization employees nuts and seeds in our Empower parents, Raise awareness on Preserve natural foods and beverages caregivers and teachers Continuously Provide effective water conservation and capital to foster healthy improve our green coffee grievance mechanisms improve access to water Simplify our behaviors in children supply chain to employees and and sanitation across our ingredient lists and stakeholders value chain remove artificial colors Support Roll out the Nestlé breastfeeding and protect Cocoa Plan with cocoa Address under- it by continuing to farmers nutrition through implement an industry- micronutrient fortification leading policy to market breast-milk substitutes responsibly Inspire people to choose water to lead healthier lives Partner for promoting healthy food environments Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 06

For individuals and families 2030 ambition: To help 27.2 million children reached Enabling healthier and happier lives 50 million children through Nestlé for Healthier Kids in 2019 lead healthier lives

each year Offering tastier and healthier choices We offer healthier versions of existing Food is a pillar of culture, bringing people products by reducing sugars, sodium and fat together and providing nutrition that is key to and increasing whole grains, vegetables and good health. To ensure a healthy future for all micronutrients. We are also making our through sustainable nutrition, we must work ingredient lists clearer and simpler to enable together. At Nestlé, this is a responsibility we consumers to better understand exactly what take seriously. they are eating and drinking (pages 7–12). Good nutrition is vital. Poor nutrition or malnutrition, on the other hand, contributes Inspiring people to lead healthier lives to a number of growing public heath We have designed a range of projects and challenges, with an estimated 149 million campaigns aimed at supporting parents and children under 5 stunted and 49 million caregivers, providing them with the wasted, and a further 40 million overweight information they need to build healthy habits (WHO). We are continuously developing our for their families. We encourage children to product portfolio to offer consumers more get active through mobile apps, websites and affordable, nutritious and natural options sports competitions. Additionally, a range of and services to support a healthier, more national campaigns provide a platform to sustainable lifestyle and an enhanced highlight the benefits of healthy habits. quality of life. (pages 13–20). We invest in robust research programs, Building, sharing and applying developing a knowledge base to deliver nutritious products tailored to the needs of nutrition knowledge people, especially children, mothers and We continuously engage with healthcare mothers-to-be. Improving diets and professionals to share our current nutrition establishing healthy behaviors globally is a joint knowledge. We are focusing our efforts on effort. We share the findings of our research accelerating the development of innovative with members of the health community products that address consumer nutritional worldwide to encourage collaboration. needs, working to bring them to market faster. With an increasing trend toward We have identified the three following focus personalized nutrition, we are expanding our areas to help us achieve this goal. work in this area to ensure we meet our consumers’ demands (pages 21–23). Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 07

Offering tastier and healthier choices Why it matters Consumers are increasingly making informed decisions about the foods and beverages they consume and their nutritional value. Taste, however, remains the main deciding factor when people choose what to eat. We aim to make a meaningful impact on people’s diets and offer healthier versions of existing products that still retain the taste consumers expect. Through our products, services and research, we are developing a more personalized approach to nutrition. This means not only supporting changing consumer preferences but also providing affordable nutrition for all. Our contribution We are increasing our focus on natural, Our commitments to offering tastier Our work on offering tastier and plant-based foods and beverages. By and healthier choices healthier choices contributes to removing artificial colors and adding the following SDGs: micronutrients and whole grains, as well as 08 Launch more foods and beverages reducing sugars, sodium and saturated fat in that are nutritious, especially for our existing products, we are improving the mothers-to-be, new mothers, and nutritional profile across our portfolio. infants and children Simplifying ingredient lists also makes it How we map our material issues to 09 Further decrease sugars, sodium the UN SDGs and their targets easier for consumers to understand the and saturated fat content of their food and make better- informed choices. 10 Increase vegetables, fiber-rich grains, pulses, nuts and seeds in our foods and beverages 11 Simplify our ingredient lists and remove artificial colors 12 Address under-nutrition through micronutrient fortification Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 08

Why it matters Expanding our all-natural offerings Launching more Nutrition is fundamental to ensuring healthy Increasingly, consumers want products that development in children. It can be a challenge include natural ingredients. Recognizing this nutritious products for parents to ensure their kids are eating and trend, in Europe we launched the Nesquik All living well. If healthier versions of foods do Natural range, which includes Nesquik All not taste good, kids simply will not eat them. Natural, an instant cocoa beverage to be Our commitment Our aim is to help parents by providing foods prepared with milk, and our new Nesquik All Launch more foods and and beverages, including more plant-based Natural Porridge, which contains whole grain options, that are nutritious and that kids love. oats and less than 5 g of total sugars per beverages that are nutritious, serving. With parents seeking more nutritious especially for mothers-to-be, What we are doing and natural food options for their families, and children in Europe falling far below new mothers, and infants We are committed to delivering more recommended dietary fiber intake levels, and children nutritious products to kids and families. Nesquik All Natural Porridge contributes to a We are also accelerating the transformation nutritious breakfast. Learn more about how Our objective of our product portfolio as we add more we are developing our products to offer kids By 2020: In both developed and developing products that offer consumers choice, Developing healthy snacks a healthy and nutritious breakfast. countries, design and launch foods and including reduced-sugar and no-added- for kids in Brazil beverages that address the daily nutritional sugar options. In particular, we are rapidly Launching organic cereals for kids Ninho is a plant-based, needs and key nutritional gaps of infants, growing our range of organic foods and Nestlé Ceregrow, launched in India in 2019, ready-to-drink product, children up to age 12, new mothers and beverages for children and families, as well is a ready-to-cook children’s breakfast launched in Brazil in 2019. mothers-to-be as our plant-based offerings. cereal made from 100% organic wheat, The drink, for children aged In progress Transforming our portfolio milk and ragi. In addition to containing natural four and over, contains a mix ingredients, Ceregrow is also a good source In 2019, we introduced 1398 new nutritious of oats, peas and real fruit. of vitamins, minerals and iron for children. products for babies, children, mothers-to-be Read more online or new mothers. The products contain less Read more about this commitment sugar and salt, more vegetables, fiber-rich grains, milk, lean proteins, and essential vitamins and minerals. Examples of products include Milo, with reduced-sugar and no-added-sugar options in Asia, Oceania and South America, and further continuation of Nescau reduced-sugar products in Brazil. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 09

Why it matters We continue to seek new ways of lowering sugar levels, including through investing in Reducing sugars, Overconsumption of sugars, sodium breakthrough technologies. To date, we have and saturated fat contributes to dietary achieved an overall 3.5% reduction, equivalent sodium and fat and health problems. This includes to around 45 000 tonnes of sugars. We are increased risk of obesity, diabetes and working to reach our 5% target through cardiovascular disease. Our commitment investment in research and development Further decrease sugars, To help reduce consumption of these (R&D) to develop new technologies, and the nutrients and contribute to improving public introduction of new reduced-sugar and sodium and saturated fat health, we are undertaking complex no-added-sugar products. reformulations of our foods and beverages. Reducing sodium in our products When we make these changes, we must be Our sodium-reduction objective applies to Our objectives careful not to alter how our products taste or Reducing saturated fat in products not yet aligned with our sodium By 2020: Reduce the sugars we add in our feel, as this could encourage consumers to Asian noodles targets based on the WHO’s recommended foods and beverages by 5% to support choose less healthy alternatives. In 2019, we introduced a locally maximum daily intake of 2000 mg. We aim to individuals and families in meeting global grown, nutritionally superior oil deliver an overall 10% sodium reduction by recommendations* What we are doing into the production of our the end of 2020. We need to keep meeting our Reducing sugar content popular Asian noodles. We plan In progress consumers’ preferences while gradually The World Health Organization’s (WHO) to launch the new noodles, with reducing levels of sodium. Breakthrough By 2020: Reduce the sodium we add in our strictest conditional recommendation is significantly reduced levels of solutions that maintain the taste consumers products by 10% to support individuals and to reduce daily intake of free sugars to saturated fat, in 2020. prefer allow us to make reductions, not only in families in meeting global recommendations* less than 5% of total energy intake. products in scope but also in those already Currently, 45% of our products meet this Read more online In progress meeting WHO recommendations. Across our recommendation, another 45% fall under our culinary range, by the end of 2019 we had By 2020: Complete the 10% commitment sugars commitment and 10% are not relevant removed more than 6500 tonnes of salt. taken in 2014, to reduce saturated fat by 10% as their sugar content is regulated, for in all relevant products that do not meet the example, by CODEX (international food Read more about this commitment Nestlé Nutritional Foundation (NF) criteria standards and codes of practice). with respect to saturated fat* In progress

Reducing sugars All Nestlé foods and beverages

45% 45% 10% Our foods and beverages out of scope of this Our foods and beverages Our foods and beverages commitment as their sugar

that provide less than 5% in scope of our content is regulated (for sugars (added)* commitment** example, by CODEX)

* These results apply to products within the scope of our commitment, not to our global product range as many * For example, milk powder, culinary products, coffee and waters of our products already meet recommended levels ** For example, confectionery products, Nesquik, Milo and coffee mixes Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 10

Why it matters Adding more fiber and whole grains to our breakfast cereals Adding vegetables, Our studies show that many people, especially children, do not consume enough Roughly 11 million deaths worldwide are fiber and whole grains sources of fiber, vitamins, minerals and associated with poor diet (The Lancet), with nutrients, found in food such as vegetables, whole grains being one of the biggest grains, bran, pulses, nuts and seeds. This dietary shortfalls. Since 2003, we have Our commitment risks harming their growth, development increased the use of whole grains by 50%, Increase vegetables, fiber-rich and health. and today over 99% of our breakfast cereals meet the CODEX requirement of at least 3 g grains, pulses, nuts and seeds There is also a lack of awareness and of whole grain per 100 g serving as the source in our foods and beverages understanding among consumers of the of fiber. importance of these vital ingredients. In some Our objectives parts of the world, Nestlé products are one of In 2019, whole grain was the main ingredient in over 99% of our ready-to-eat breakfast By 2020: Add to our products at least the leading sources of whole grain intake. It is Satisfying consumers with cereals for children and teenagers, and in 750 million portions of vegetables, important that we continue to encourage healthier pizza 100% of our cereals carrying the green banner 300 million portions* of nutrient-rich grains, greater consumption of nutrient-rich foods. To satisfy the needs of health- are made with a minimum 8 g of whole grain pulses and bran, and more nuts and seeds Through activities such as our participation in conscious consumers looking per serving, achieving our objective. Achieved the global Whole Grain Initiative, we are to consume more vegetables, helping to increase consumer awareness of Although we have achieved our two our California Pizza Kitchen By 2020: In addition to whole grain already the importance of whole grains and promote objectives for 2020, we continue to work business is leveraging on-trend being the main ingredient in our ready-to-eat their consumption. toward our overall commitment of increasing ingredients to create a breakfast cereals for children and teenagers, vegetables, fiber and whole grains. As an cauliflower crust. all our Nestlé-branded cereals that carry What we are doing example, our Nesquik breakfast cereals Green Banner will be a source of fiber** In addition to putting more of these vital contain over 50% whole grains as well as and made with whole grain*** ingredients into our recipes, we promote being a source of vitamins****, iron****, Achieved healthy cooking at home and provide calcium**** and fiber. nutritional advice on packs and online. Read more about this commitment Calculating increases of serving sizes is highly complex. In 2018, our cautious approach to the data led us to underestimate the increases achieved. In 2019, we strengthened and refined our data gathering and analysis, implementing new tools to ensure robust, transparent figures. We are now confident that we have met our 2020 objective, with 403 million portions of fiber-rich grains and 2.76 billion portions of vegetables added * A portion of fiber-rich grains is the amount of grain by the end of 2019, measured against the product (variable, depending on the type of grain, type baseline of 2016. of product, etc.) that contains 16 g of whole grains ** All products that carry 3 g or more of fiber per 100 g on pack nutrition table *** Having a minimum of 8 g of whole grain per serving ****Except in countries in which fortification is not permitted Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 11

Why it matters Simplifying ingredient lists Simplifying Increasingly, people want to know what is in We continued simplifying our recipes in our the foods and beverages they consume – and beverage, dairy, food, professional, waters, ingredient lists whether the ingredients are nutritious, fit into confectionery, ice cream, nutrition and Nestlé a healthy lifestyle and are sustainably sourced Health Science businesses. and manufactured. We can meet these Our commitment We have set up and reinforced an internal expectations by being clear about what our cross-disciplinary team to consider how Simplify our ingredient lists products contain, how we express this on products can be simplified by only using and remove artificial colors packs and by getting rid of ingredients that ‘kitchen cupboard’ ingredients – ingredients may be unfamiliar to consumers. that people know and love and are likely to Our objectives find at home. Our entire Maggi portfolio in By 2020: Continue removing What we are doing Nestlé Russia is now made with ‘kitchen unfamiliar ingredients We are transforming products by removing cupboard’ ingredients. We are continuously In progress artificial colors and ingredients that working to reformulate and innovate our consumers do not recognize. We also provide products to contain more instantly By 2020: Remove all artificial colors simpler labels with clear information. recognizable ingredients. Launching a simplified, natural from our products* Removing artificial colors Among the products launched in 2019 using cocoa powder in Europe In progress In 2019, we continued to remove artificial simple, natural ingredients and flavors were Launched in Europe in 2019, colors from our food and beverage recipes. Nestlé Coffee-Mate Natural Bliss plant-based Nesquik All Natural offers a Currently, 1.67% by weight of the colorants Half and Half (half almond milk and half cocoa beverage with a simplified used in our foods and beverages is defined coconut cream) and Nestlé Coffee-Mate ingredients list containing just as artificial. Natural Bliss Oat Milk creamers. Nescafé five natural ingredients. The Coffee Protein Smoothie, launched in the US, powder also uses less sugar and We continue to seek non-artificial color is made from real coffee and contains no is sold in recyclable paper solutions that are acceptable in both artificial flavors, carrageenans (a seaweed packaging. performance and cost. However, there extract) or sweeteners. Nestlé Cold Whipped are challenges. Sometimes it is difficult to Latte, also launched in the US, includes seven Read more online change to non-artificial colors that provide all-natural ingredients. the same consumer experience and meet demands for affordable pricing. Wherever Read more about this commitment this is an issue, we work with suppliers to find suitable solutions.

* This objective does not currently apply to our pet food products Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 12

Why it matters • Increase micronutrient accessibility through partnerships, new routes to market Micronutrient Around one-third of the world’s population and affordability strategies. lacks essential vitamins and minerals (Global fortification Nutrition Report). This can lead to serious In 2019, we focused our activities in our Zone health issues, such as impaired growth and AOA (Asia, Oceania and sub-Saharan Africa), physical and intellectual development, as running projects in eight countries. Our commitment well as compromised immunity. Address under-nutrition Delivering solutions It is estimated that by 2025, the We are continuing to fortify relevant foods and through micronutrient nutrition crisis will cost society around beverages with the micronutrients most fortification USD 3.3 trillion (CHF 3.12 trillion) per year commonly lacking in local diets. In 2019, we (Global Access to Nutrition Index). Nestlé delivered 185.4 billion fortified servings Our objectives is helping tackle this by fortifying foods (including 9 billion from our joint venture Cereal By 2020: Reach millions of children and and beverages with micronutrients that are Partners Worldwide (CPW)), incorporating at families with fortified foods and beverages unavailable or lacking in local diets, focusing least one of the Big 4 micronutrients (iron, In progress particularly on children and families in iodine, vitamin A and zinc, as defined by the developing and high-priority countries. WHO) in 64 countries with higher vulnerability By 2020: Initiate or support collective to micronutrient malnutrition. action to reduce micronutrient deficiencies What we are doing Of our popularly positioned products for in 10 countries Micronutrient deficiencies are a serious lower-income consumers, 87% were fortified In progress public health challenge. We believe we can with at least one of the Big 4. As a result of Tackling iron deficiency in help tackle it by fortifying a significant our global efforts, we ranked first out of the Sri Lanka By 2020: Continue to develop the supply proportion of our nutritious foods and 22 largest food and beverage manufacturing At the request of the Sri Lankan chain for biofortified crops and expand our beverages. Collective action is key to companies assessed by the 2018 Access to Government, we implemented fortified portfolio achieving more. We work with governments, Nutrition Index (ATNI) in the category of a series of multi-pronged In progress non-governmental organizations (NGOS), Addressing Undernutrition. The next initiatives in the country to raise the professional nutritional community and assessment will be in 2020. awareness of iron deficiency, retailers to: supporting health professionals We aim to use more biofortified maize in • Raise micronutrient fortification (MNF) in the field and using chat bots cereal products, particularly in Nigeria. In on the agenda at political, research or to speak with consumers. consumer levels. addition to using as much biofortified maize as possible, we actively participate in • Advocate the inclusion of MNF in Read more online workshops and forums on biofortified crops. national nutrition plans.

• Build multi-stakeholder platforms in Read more about this commitment support of MNF. • Develop education or social marketing campaigns with governments and other bodies. • Further research into MNF deficiencies. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 13

Inspiring people to lead healthier lives Why it matters This strategy helped us to progress faster in implementing our commitment to double Approximately 1.9 billion adults globally are outreach by 2020 by focusing the obese or overweight, with 462 million more communication actions of our bigger brands underweight. Adding to the problem, for more impact. 52 million children under the age of 5 have low weight for their height and 40 million are We support individuals and families overweight or obese (WHO). throughout their lives, from conception to old age. Our dedicated R&D teams create healthy Regardless of demographic, there has been products that address a range of nutritional a clear upward trend in the levels of refined requirements. Additionally, we run a variety of grains and sugars in global diets and a campaigns and collaborate with other industry decrease in nutrient-rich foods such as fruit, partners to offer information on topics such as vegetables and whole grains (Global Nutrition healthy hydration and infant nutrition, Report). At Nestlé, we want to help consumers encouraging people to live healthier lives. live healthier lives by providing transparent nutrition information and inspiring them with healthier recipes and lifestyle tips. Our contribution Our commitments to inspiring people Our work on inspiring people to We are on track to meet most of our to lead healthier lives lead healthier lives contributes to commitments by 2020. We have been able the following SDGs: 14 Apply and explain nutrition information on to achieve this by developing a range of packs, at-point-of-sale and online programs to promote healthier lives globally, in line with the SDGs related to zero hunger, 15 Offer guidance on portions for our products good health and reducing inequalities. 16 Leverage our marketing efforts to promote Through our brands, we promote healthy healthy cooking, eating and lifestyles cooking and eating as well as active lifestyles 17 Empower parents, caregivers and teachers How we map our material issues to encourage adults and children to lead to foster healthy behaviors in children to the UN SDGs and their targets healthier lives, while we continuously work to provide clear and easily understandable 18 Support breastfeeding and protect nutrition and portion information both on it by continuing to implement an industry- packs and online. leading policy to market breast-milk substitutes responsibly 19 Inspire people to choose water to lead healthier lives 20 Partner for promoting healthy food environments Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 14

Why it matters In June 2019, we announced our support for Nutri-Score as the preferred front-of-pack Providing nutritional Our consumers want to make informed labeling initiative for food and beverage decisions about their food and beverage products in Continental Europe. We are information choices. We have a responsibility to committed to implementing it at scale, communicate about our products starting in countries that already support the transparently and comprehensively, including Our commitment initiative. Nutri-Score is a color-coded system ingredients and nutritional values. Apply and explain nutrition that classifies products according to their It is important that we provide consumers with nutritional profile, with a scale from A information on packs, at easy-to-understand information. We align (healthier choices) to E (less healthy choices). point-of-sale and online with external front-of-pack labeling initiatives Read more about Nutri-Score on our website. to ensure the nutritional information of our Updating the Nestlé Nutritional Compass Our objective foods and beverages is visible and clear. By 2020: Continue providing detailed product The Nestlé Nutritional Compass has been nutrition facts with daily value percentages, What we are doing displayed on our product packaging since ingredients and allergens, and add special diet Improving nutrition information on packs 2005 and is now featured on 96.4% of packaging. The Compass brings together information, nutrition labeling explanations As regulations for front-of-pack nutrition nutritional information, explanations of what and healthy eating tips on all our relevant labeling vary from market to market, there are this information means for consumers and packs, as well as on our websites and e-retailer challenges associated with identifying a how the product fits into a balanced and sites, to better enable informed choices global approach that is quickly and easily healthy diet. Research performed by the In progress understandable for consumers. We started Consumer Goods Forum found that 55% of implementing Guideline Daily Amount (GDA) consumers want more information on social, in 2014, which is now present on 88% of our health, environmental and safety issues products, as part of our wider commitment to related to products. We are now in the provide consumers with transparent process of investigating how best to display information about the nutritional value of this on our packaging. our products. Developing Ask Nestlé in India

Governments around the world are Read more about this commitment Helping parents better increasingly endorsing interpretive front-of- understand the unique nutrition pack labeling initiatives, such as the Health requirements of their children, we Star Rating in Australia, the color-coded developed Ask Nestlé in India. initiative in the UK and Ireland, and warning The online portal provides labels in some Latin American countries. information on nutritional needs In such cases, we are committed to as well as an easy-to-understand implementing local initiatives across our recipe directory. relevant product portfolio. Read more online Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 15

Why it matters What we are doing Offering portion Globally, there is a lack of understanding about Expanding on-pack portion guidance what a good food portion looks like. Although Currently, Nestlé Portion Guidance is provided guidance sizes in general are increasing, intake of on 61.9% of our products. nutrient-rich foods such as vegetables and The intention of the Nestlé Portion Guidance whole grains are simultaneously declining – Our commitment initiative is to engage consumers on which can contribute to adverse health Offer guidance on portions considering responsible portions, right at the outcomes (Cochrane). point-of-sale and moment of usage – in other for our products We are well placed and committed to words, when their decision about foods and contributing to solutions through our beverages quantity is made. Our objectives Nestlé Portion Guidance initiative, designed to help In addition, we strive to provide our consumers By 2020: Continue providing guidance on consumers make informed food choices as with nutrition information per portion of portions globally on all children’s and family part of a balanced diet. product in the nutritional information table. product packs and add frequency of In countries where portion guidance is closely consumption indications on relevant products regulated, we follow the local regulations In progress deemed relevant to our consumers. Partnering for portion sizes in Australia By 2020: Extend our guidance on portions Read more about this commitment to our consumer recipes, and relevant In Australia, we are chairing an teenager and adult products Industry Best Practice Guide Working Group, as part of the In progress Government’s Healthy Food By 2020: Gradually increase the proportion Partnership strategy. This of guidance on portions provided through collaborative initiative is product form, pack design, serving device designed to tackle the numbers or dispenser to make it even more intuitive of overweight and obese in than on-pack messaging the country. In progress Read more online Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 16

Why it matters Partnering with the Global Alliance for Responsible Media Marketing Our expertise is in making nutritious foods and beverages that support a healthy To guide our online marketing efforts this year, healthy choices lifestyle. We want to share it with consumers we continued our participation in the World worldwide. Through the scope and power of Federation of Advertisers (WFA). Through the our marketing, we are promoting more WFA, we are partnering with 16 other Our commitment nutritious options to consumers – responsibly advertisers, including global companies such Leverage our marketing and transparently. as Unilever, Adidas and P&G, to form the Global Alliance for Responsible Media. The efforts to promote healthy We target our marketing efforts toward Alliance will work with publishers and cooking, eating and lifestyles parents and caregivers, helping them to make platforms to ensure safe online environments. informed decisions on how to keep their It also forms part of Nestlé’s wider strategy of Our objective children and families healthy. We have also being safe, transparent and accurate in our By 2020: Double the outreach of our developed robust guidelines to restrict advertising on digital platforms. efforts to promote healthy cooking and marketing that targets children. eating and healthy lifestyles for individuals, Leading the industry in marketing compliance families and their pets What we are doing Encouraging cooking with In progress Implementing standards for marketing Since making our commitment to market Maggi in Thailand healthy choices in 2016, we have stepped up to children Maggi’s Mum and Me cooking efforts to promote healthy cooking, eating In 2017, we implemented a robust standard on club in Thailand helps children and lifestyles. This represents a 67% increase marketing products to children with the learn cooking skills from in marketing expenditure in 2019 (versus development of our Policy on Marketing their parents. 2016) toward products that actively support Communication to Children, one of the healthy lifestyles. strictest policies of its kind in our industry. Read more online

In line with this policy, we have further Read more about this commitment committed not to advertise to children under the age of 6, and to only market products to children between the ages of 6 and 12. Products that we do market to children must meet the Nestlé Nutritional Profiling System. In 2019, we audited our Indian operations for marketing to children compliance, with the results of this review made publicly available. This was identified as a best practice for the industry by ATNI in their India spotlight, which was released in June 2019. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 17

Why it matters habits. The campaign reached more than 200 million parents worldwide. Promoting healthy Adopting good nutrition and exercise practices from an early age gives children a Through increased efforts, in 2019, we behaviors in children better chance of growing up to be fit and supported 27.2 million children through the healthy. Malnutrition continues to grow as an program in over 84 countries around the issue on a global scale: more than 340 million world. This contributes to our objective of Our commitment children and teenagers are overweight or reaching 50 million children cumulatively Empower parents, caregivers obese (WHO), and many others suffer from from 2016 to 2020, and is a milestone toward and teachers to foster healthy under-nutrition. our wider 2030 ambition to help 50 million children every single year. Read more about behaviors in children We bring together current public health data how we are partnering with retailers through with findings from Nestlé research to create Nestlé for Healthier Kids on our website. Our objective products and offer services that support the By 2020: Support 50 million children healthy growth of children. Read more about this commitment through our nutrition education and behavior change programs, an important milestone What we are doing toward our wider 2030 ambition Supporting children to live healthier lives Adopting a fruit or vegetable In progress The Nestlé for Healthier Kids initiative brings in Argentina together several programs that promote Encouraging children to eat more healthy eating in children as well as programs fruit and vegetables, Nestlé designed to equip parents with all the launched the Adopt a Fruit, Adopt information they need to reach their child’s a Vegetable initiative in nutritional requirements. It drives actions Argentina. The initiative was a supporting our global ambition to support collaborative effort with the 50 million children every year by 2030. supermarket Carrefour.

The initiative also acts as a platform from Read more online which we continue to research and develop more nutritious products for kids. This includes reducing the amount of sugars, saturated fat and salt in our products while increasing the nutrient, fiber and vegetable content. Read more about how we are developing healthier products. In 2019, two communication campaigns across 40 markets highlighted the progress made in the nutritional improvement of our portfolio. It also provided an opportunity to raise awareness of the importance of cooking together with children to improve their eating Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 18

Why it matters Marketing BMS responsibly Supporting Good nutrition in the first 1000 days, from We are committed to implementing the WHO conception until two years old, is essential Code as outlined by national governments as breastfeeding for mother and baby. We support the well as our own policies and procedures, WHO’s recommendation that mothers whichever is stricter. We audited 33 countries (who can) should exclusively breastfeed on WHO Code compliance in 2019. We aim to Our commitment infants for the first six months of life, followed retain our FTSE4Good score in the 2020 Support breastfeeding and by the introduction of adequate nutritious review. We also want to encourage the entire protect it by continuing to foods alongside breastfeeding up to BMS industry to work toward achieving the two years and beyond. highest level of marketing compliance. We implement an industry-leading strive to be industry leaders in applying the policy to market breast-milk However, some new mothers may be unable, WHO Code, even when stricter than our or choose not, to breastfeed or decide to offer own policies. substitutes responsibly mixed feeding. We want to support these mothers with breast-milk substitutes (BMS) Supporting new mothers Our objectives Launching Materna Opti-Lac that address infant nutritional needs, as well We want to do everything to help ensure By 2020: Advocate for a breastfeeding- as science-backed information about what mothers have comfortable, secure areas In 2019, we launched Materna friendly environment by supporting the is best for early infant nutrition. where they can breastfeed. In 2019, we Opti-Lac in Hong Kong to support set-up of breastfeeding rooms in provided breastfeeding rooms in all our breastfeeding. Materna Opti-Lac communities where we operate What we are doing facilities with more than 50 female employees. contains a patented probiotic strain, , In progress Ensuring compliance throughout We also installed 5912 rooms for public use in L. fermentum LC40 naturally found in the breast milk our business countries where we operate. Ongoing: Ensure the practices of the of healthy mothers. We developed our Nestlé Policies and Nutrition business consistently meet Read more about this commitment Procedures for the Implementation of the the FTSE4Good Index Breast Milk Read more online WHO International Code of Marketing of Substitutes criteria Breast Milk Substitutes to ensure the In progress Code is implemented throughout our organization. In 2019, 1428 Nestlé employees Ongoing: Continue to strengthen our policy completed training on breastfeeding, the WHO and procedures to maintain industry Code and Nestlé policies and procedures. leadership on the implementation of the WHO Code In 2019, we launched the Code of Interaction In progress with Healthcare Professionals and Institutions for Nestlé Nutrition Business Units. This Ongoing: Continue to report publicly on document sets out the principles for engaging our progress on the implementation of our with healthcare institutions and professionals policy on the WHO Code on BMS and the types of interactions our In progress employees can have with healthcare professionals to avoid conflicts of interest. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 19

Why it matters In 2019, we ran a social media campaign across nine key markets, including Mexico Encouraging The water intake recommendation for the and China, promoting the benefits of healthy average adult is about 1.5 liters each day, a hydration. The campaign also served to healthy hydration level that many people do not reach. highlight the results of studies done by Water is necessary for a whole host of body market research organizations IPSOS and Our commitment functions. We want to ensure people get Kantar on the hydration behaviors and habits Inspire people to choose enough hydration each day as part of a of adults and children around the world. healthy lifestyle. We know good hydration Gathering global information on hydration water to lead healthier lives habits need to start early. That’s why we have made it a priority to develop programs In 2018, we achieved our objective to release Our objective that encourage children to drink enough an open-access platform where anyone can By 2020: Launch national campaigns water daily. download information on global drinking promoting healthy hydration with public habits. We have also put together easy-to- Wild About Water: making and private partners in 10 countries What we are doing understand information summarizing our water a fun choice for global research into children’s attitudes children worldwide Achieved Launching national campaigns to drinking water and preferences for The majority of children do not The majority of children do not drink the water compared to sugary drinks. Find out drink the daily recommended recommended daily amount of water, a more about global hydration on the Nestlé amount of water, and this is, in statistic that Nestlé is committed to Waters website. part, because they find it boring improving. We continue to develop to drink. Our global Wild About campaigns to encourage better hydration. Read more about this commitment Water campaign was designed 55 countries now formally include the Choose to get children excited about Water module in their Nestlé for Healthier Kids drinking water, with bottles initiatives. In 2019, these countries launched specially designed to look like 99 programs that address the module, animals and with exciting facts including TummyFish, an app released in the about animal hydration. United Arab Emirates to get children excited about drinking water. Find out more about our Read more online healthy hydration app on our website. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 20

Why it matters affects our bodies. Through our outreach efforts, we have engaged with approximately Health-promoting Knowledge of the importance of proper 70 000 industry professionals to date. nutrition is on the rise globally. At the same food environments time, greater accessibility and availability of Collaborating for Healthier Lives nutritious products mean the healthy choice In 2019, within the retail sector, we partnered is increasingly the easier one. We believe that Our commitment with 18 retailers, 58 manufacturers and 27 we, and the wider food and beverage stakeholders (public health authorities, Partner for promoting industry, have a role to play in supporting academia, NGOs, and city officials) through healthy food environments people to make informed choices to lead the Consumer Goods Forum Collaboration for healthier lives. Healthier Lives global program. Through joint Our objective Partnering with retailers represents an action, in stores (including digital) and By 2020: Partner with retailers and food opportunity to inspire behavior change and communities, we work to promote healthy professionals to foster environments that promote healthier lives. Through offering diets and lifestyles. The program is being promote healthier diets and lifestyles brands and services that are good for deployed in the following markets: Colombia, In progress consumers, their families and the planet, the US, Japan, Turkey, Central America, the manufacturers and retailers can encourage UK, France, Mexico and China. more healthy and sustainable shopping Nestlé actively participated in all the country patterns in consumers. initiatives, offering a range of products, services and consumer information. What we are doing Additionally, we are contributing to research Inspiring people to cook Engaging with industry professionals to define metrics to measure initiative results. Our Worldchefs Academy is an In 2019, we maintained our commitment to This will supplement a global learning tool online learning portal that engaging with professionals in the food that will allow the learning to be disseminated provides free foundational-level industry to share current information on and to scaling up the Consumer Goods Forum culinary information to anyone out-of-home nutrition. Through our Nestlé Collaboration for Healthier Lives program. interested in pursuing a career Professional LinkedIn page, we engage with in the culinary industry. In 2019, over 84 000 people globally. Our page acts Read more about this commitment 5177 young people were trained as a platform through which we can share globally through the academy. information on developments in the food service industry as well as tips from chefs about healthy eating with relevant audiences. Learn more about how we leverage this platform to widen our reach on our website. Expanding our reach further, we continue to connect with professionals through our Worldchefs Academy and through International Chefs Day, an event held on October 20 each year. The theme for 2019 was How Healthy Food Works, and events focused on teaching children how food Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 21

Building, sharing and applying nutrition knowledge Why it matters Today, we have the most advanced science and innovation network in the food industry, The foods and beverages babies and children with around 23 R&D locations and more than consume play a vital role in shaping their 3900 employees. In 2019, we invested future health and development, both mentally CHF 1.7 billion in our research activities. We and physically. In the same way, what we also collaborate with leading universities, consume as adults can influence our health research organizations, start-ups and other later in life. However, many babies, children innovation partners. These partnerships help and adults worldwide suffer from under- us widen our scope by generating new ideas nutrition or over-nutrition, with potentially that can help us address key public health serious consequences, both for themselves challenges and much more. and for society. By understanding more about these issues, we can develop products that We also continue to engage with, and help consumers of all ages to enjoy healthier, support, healthcare and nutritional more nutritious diets. professionals around the world, providing training, disseminating information and Our contribution learning, and facilitating the sharing of Through our global network of research and best practice. development centers, we study everything Our commitments to building, sharing and Our work on building, sharing and from maternal and children’s health to healthy applying nutrition knowledge applying nutrition knowledge aging and pet care. We take a holistic contributes to the following SDGs: approach that focuses on nutrition and 22 Build and share nutrition knowledge from physical activity, and their combined impact the first 1000 days through to healthy aging on health. This includes expanding our 23 Build biomedical science leading to health- personalized nutrition work, which enables promoting products, personalized nutrition consumers to find the right nutritional and digital solutions How we map our material issues solutions for their particular circumstances. to the UN SDGs and their targets Our work is helping us build a deep understanding of nutritional science and develop products that enable us to fulfill our purpose: enhancing quality of life and contributing to a healthier future. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 22

Why it matters 2 years of age. In 2019, we presented our study at two international congresses – the Sharing nutrition It is well known that what we eat and drink as 10th International Symposium on Diabetes, children sets the foundation for our adult Hypertension, Metabolic Syndrome and knowledge lives. However, as we get older our nutritional Pregnancy in Florence, Italy, and the needs change. At Nestlé, we carefully study International Diabetes Federation Congress throughout life the links between health and nutrition in Busan, Korea. throughout all the stages of life – from babies and children to expectant mothers and Contributing to the knowledge of Our commitment healthy aging. healthcare professionals Build and share nutrition In 2019, in addition to our global NNI website, knowledge from the first 1000 What we are doing we operated 18 local websites, reaching days through to healthy aging Nestlé believes healthcare professionals are 373 653 registered healthcare professionals, best placed to advise consumers on nutrition. scientists and nutrition practitioners across Our objectives We support and engage healthcare 178 countries. These included websites By 2020: Build knowledge on the professionals (HCPs) around the world developed in French to make scientific through communications, training, courses, knowledge accessible to French-speaking associations between nutrition and lifestyle, Contributing to the knowledge workshops, websites and other initiatives. and biomarkers of health in mothers and doctors in the Central and West Africa of healthcare professionals Region, a region where we have many children through the EpiGen collaboration Through our not-for-profit Nestlé Nutrition projects to support local communities. The NNI has supported In progress Institute (NNI), we share our cutting-edge, fellowships for doctors from science-based nutrition content with HCPs, Sharing knowledge with nutrition scientists developing countries. For By 2020: Build further knowledge on while our Medical Affairs division engages Nestlé actively participates in conferences, example, we have almost tripled dietary intake, eating behaviors and healthcare professionals and brings this such as the 2019 Asian Congress of Nutrition, the number of fully certified lifestyles in infants and children knowledge to clinical practice. held in Bali, Indonesia. The conference pediatric gastroenterologists we In progress Improving the health of mothers and babies attracted more than 3000 scientists from all have trained in African countries, over the world. Nestlé hosted three symposia from 9 in 2011 to 27 in 2019. We continued our work with the EpiGen By 2020: Develop a deeper understanding and one plenary session, which included Global Research Consortium on the NiPPeR of dietary intake, preferences and lifestyle presentations from distinguished academics Read more online (Nutritional Intervention Preconception and habits during aging with whom we collaborate. Topics covered in During Pregnancy to Maintain Healthy In progress the symposia included nutrient profiling of Glucose Metabolism and Offspring Health) food, the double burden of malnutrition, and metabolic health study in 2019. NiPPeR aims nutritional needs for Indonesian children. to establish whether specific combinations of

nutrients and probiotics can improve the Read more about this commitment health of mothers and babies. Recruitment of study participants is now complete: more than 550 babies will be followed until they are Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 23

Why it matters Developing a nutritional score for Nestlé website recipes Enhancing Around the world, people are living longer. However, healthcare systems may not be able To help consumers prepare nutritionally biomedical science to provide the support an older population balanced, home-cooked meals, we’ve requires. Biomedical science – which focuses developed a meal nutritional score for recipes on how cells, organs and systems function in on our website. Each recipe is rated based on Our commitment the human body to help healthcare – enables daily nutritional requirements using a Build biomedical science us to understand, treat and help prevent scientifically validated algorithm developed disease at all stages through life. Our work by Nestlé Research. Consumers can see leading to health-promoting how nutritionally balanced recipes are and, products, personalized also helps us see the role nutrition, as well as genetics, family history, environment and where needed, get suggestions for nutrition and digital solutions lifestyle, has in health and well-being. complementary dishes. In late 2019, the system was piloted in Mexico Our objectives What we are doing and went live. To date, 96% of all recipes By 2020: Develop digital nutrition profiling We are developing our work in nutritional (more than 5000) on our Mexico website have for calculating nutrient intakes, as well as for profiling to enable more personalized a meal nutritional score. We plan to roll out Combating aging through a making recommendations for nutritional solutions for consumers. Cellular nutrition – the rating system to at least five more Nestlé new class of nutrition balance, into a comprehensive tool to assist which uses plant nutrients to support cells in recipe websites in 2020. individuals and families to lead happier and the body – and its potential benefits for health Nestlé Health Science has healthier lives are also a key focus area. In particular, we are Read more about this commitment invested in and partnered with In progress exploring its role in tackling aging. Swiss-based Amazentis, licensing the rights to cutting-edge By 2020: Develop new interventional Developing personalized nutrition technology that uses nutrition to nutritional solutions driven by studies and In 2019, Nestlé Health Science expanded its revitalize mitochondria, boosting diagnostic profiling. These programs will operations into personalized nutrition with the cellular health. focus on key areas such as metabolism, acquisition of Persona, a leading US-based gastrointestinal and brain health, healthy personalized vitamin business. Persona uses Read more online aging, skin health and pets a proprietary algorithm, taking into account a In progress consumer’s lifestyle, history and individual needs, to develop a customized nutritional assessment. This enables consumers to discover the right nutritional solutions for their specific needs. Persona is expanding globally as Nestlé Health Science looks to increase its overall personalization portfolio. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 24

For our communities 2030 ambition: Our global youth initiative, Helping develop thriving, resilient communities Nestlé needs YOUth, helped over To improve 30 million 900 000 young people access livelihoods in economic opportunities in 2019 communities directly connected to our business activities

As demand for resources increases, we need Respecting and promoting to ensure a secure, long-term supply chain to safeguard the future of our business and local human rights communities. That’s why we work with Respect for human rights is fully embedded in farmers and suppliers across the world to our company’s purpose and values. There is develop thriving, resilient communities and no place for human rights abuses in our sustainable agricultural techniques. To business or our supply chains. Upholding the support our efforts, we divide our focus human rights of everyone who works for or between the following three key areas. with us is essential to make our business activities and supply chains more resilient, Enhancing rural development stable and sustainable (pages 31–35). and livelihoods Promoting decent employment Globally, demand for food is growing and eating habits and behaviors are changing, and diversity with increasing preference for plant-based, A business thrives when it has a healthy, natural products. At the same time, diverse and engaged workforce that reflects agriculture faces many challenges, from an society. Cultural diversity makes businesses aging farming population to the effects of stronger, as it brings innovation and climate change. We want to help build a encourages different ways of thinking. We sustainable, long-term supply of ingredients. have a particular focus on gender balance and Through initiatives such as Farmer Connect, empowering women, while our new Nestlé we aim to help farmers improve their Global Parental Support Policy extends livelihoods and increase their incomes, while gender-neutral support to primary and our agripreneurship program trains a new secondary caregivers. Through our Nestlé generation of farmers and shows that needs YOUth initiative, we tackle the serious agriculture can offer a viable career path for global issue of youth unemployment, young people (pages 25–30). equipping young people with the skills they will need in tomorrow’s workplace (pages 36–39). Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 25

Enhancing rural development and livelihoods Why it matters farmers. Agripreneurship grows and improves key farming skills. It also plays a Demand for food is growing, but an aging major role in making farming more attractive farming population, climate change, poor to young people as a viable career choice, agricultural practices, and old or diseased helping to ensure a stable, long-term plants all present threats to sustainable supply chain. supply chains. Many farmers and their families and communities live on low incomes Encouraging farmers – especially and often have periods without sufficient smallholders in developing countries – to food to sustain themselves. At the same time, grow more protein-rich crops can be an not enough young people see agriculture as important step in helping improve their own an attractive, viable option. These challenges nutrition intake and diversifying income, as must be overcome to meet demand and well as mitigating the effects of climate secure long-term supplies of the raw change. We have programs and training in materials we use. place to help farmers and their families learn more about ways to improve their nutrition. Our contribution Few companies in the food business are As a major global food and beverage taking this kind of holistic approach to company, we can make a difference. By nutrition provision. working closely with farming communities, Our commitments to enhancing rural Our work on enhancing rural Consumers are also increasingly aware of civil society, industry peers and governments, development and livelihoods development and livelihoods issues around responsible sourcing in supply contributes to the following SDGs: we can identify the root causes of the 26 Improve farm economics among the chains, wanting to ensure that the products challenges farmers face. Armed with this farmers who supply us they buy have been sourced ethically. This is information, we can apply our Theory of particularly relevant to ensure human rights Change model, which enables us to focus our 27 Improve food availability and dietary are upheld and the environment protected activities where they matter most and diversity among the farmers who throughout our supply chain. Our policies and measure our impact against desired long- supply us activities are intended to ensure that Nestlé term outcomes. 28 Implement responsible sourcing in sources ingredients only where workers’ our supply chain and promote Through Farmer Connect, we work directly rights are protected and children have not animal welfare with more than 550 000 farmers, helping been exploited. We also aim to ensure all them to grow and thrive. We place a special animals in our supply chain are healthy and 29 Continuously improve our green focus on agripreneurship, to identify and stress-free. coffee supply chain develop the most talented, progressive 30 Roll out the Nestlé Cocoa Plan with How we map our material issues to the UN SDGs and their targets cocoa farmers Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 26

Why it matters Improving farm economics around the world Delivering impact Around the world, the farming population and the rural communities in which they live are Based on rural development assessments through Farmer aging. We can increasingly expect to see this carried out to understand the needs of impact our supply chain. Many farmers also farmers who supply us, we are implementing Connect face economic pressures resulting from programs to support them in seven priority historically low food prices and are dealing locations. Having had results from four of the with the effects of climate change. We locations in 2018, we obtained results from Our commitment support farmers to meet these challenges. the three remaining countries – China, India Improve farm economics Our initiatives help make agriculture an and Pakistan – in 2019. among the farmers who attractive career choice for young people, Developing agripreneurs supply us which is essential to ensuring the long-term Each year, we provide training to more than sustainability of our supplies. 400 000 farmers. Around 20 000 are identified Our objective as potential agripreneurs – those with the What we are doing progressive attitudes necessary to grow and By 2020: Improve farm economics in Our Farmer Connect program, through which develop their farms as successful future seven priority sourcing locations based Ensuring healthy dairy cows we work directly with more than 550 000 businesses. As well as developing their own on the results of the Rural Development in Brazil farmers, helps us to improve farm economics farms, they can pass their training on to other Framework baselines Animal welfare is essential, and and ensure viable agriculture. To identify and farmers, empowering them and supporting In progress we want to source ingredients prioritize local issues and suitable wider communities. only from stress-free, healthy interventions, and measure the outcomes, animals. In Brazil, our brand we have adopted a Theory of Change (ToC) This will also help build generations of loyal, Nido is piloting an initiative called approach. Applied in our coffee and dairy successful farmers, creating stability in that uses sensors to supply chains, ToC enables us to address farming practices and supply chains, and CowSense assess the movement, these issues and develop bespoke solutions. high-quality produce. contentment and stress levels of Creating sustainable farming methods At the heart of our activities is agripreneurship, dairy cows so we can implement our program for developing farmers – Today, sustainable, economically viable measures to eliminate elements especially young farmers – who have the farming must also address material issues that cause stress. dynamism, skills and mindset to make their such as soil health, biodiversity and water. farms strong and sustainable businesses. Agripreneurship trains farmers in methods to Read more online mitigate the impacts of climate change on these issues, especially through reducing greenhouse gas emissions and reducing their carbon footprint.

Read more about this commitment Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 27

Why it matters Supporting coffee communities in Mexico We are working with the Bancos de Alimentos Improving Our Rural Development Framework assessments showed that shortage of food de México (BAMX) to extend its food bank farmers’ diets can be a major problem for many farmers and operations into the rural coffee communities their families – up to 70% may spend up to and to implement an Impact Evaluation to three months each year without enough food. measure results, particularly on mothers and Our commitment Moreover, many farmers lack diversity in their young children. In 2019, 8553 households Improve food availability diets, with insufficient protein and nutrient- benefited from this work. and dietary diversity among rich foods like dairy, fruit and vegetables. Providing clean water in Indonesia the farmers who supply us A stable, long-term supply chain requires Poor sanitation must be addressed alongside healthy farmers and farming communities, nutritional interventions. The Indonesian Our objective and improving their diets is an important community empowerment program is focused By 2020: Improve food availability and dietary contribution to achieving that. on providing clean water to communities. We diversity in five priority sourcing locations, What we are doing have built 8 clean water access points in based on the results of the Rural Development 4 districts (cocoa and dairy), reaching Framework baselines Our priority locations 2123 households. Tackling food insecurity in Nutrition and food security for farmers is a In progress Empowering women in Côte d’Ivoire the Philippines complex problem with no easy solutions. Our assessments found that 77% We have initiated tailored pilot programs to In Côte d’Ivoire, women often do not have access to economic opportunities. We are of farmers in the Philippines address challenges in Kenya, Mexico and experience food shortages at the Philippines, with further programs in working with the FarmStrong Foundation to help women set up their own businesses, some point each year. To help Indonesia and Côte d’Ivoire either in place address this, we train farmers in or in development. improving their livelihoods and their household incomes. more productive farming Boosting kitchen gardens in Kenya practices, such as diversification In Kenya, we continue to train farmers and Read more about this commitment and increasing yields. Among their partners in better nutrition. In 2019, we the initiatives are developing the developed plans to help connect farmers with keeping of poultry for local markets and reduce waste and improve consumption and implementing food availability through better food our Nestlé for Healthier Kids preservation methods. We are also fostering program to help ensure children the use of kitchen gardens, providing seeds to eat well. farmers to help them grow nutritious Read more online vegetables that are more resilient to climate change and dry seasons, as well as providing nutrition and cookery advice. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 28

Why it matters By the end of March 2019, 76% of our raw Raw materials that are responsibly sourced, materials, including soya, sugar, meat, pulp % of the volume of our priority categories Implement A secure supply of high-quality agricultural and paper, and palm oil, were verified 2017 57% ingredients is essential to ensuring the deforestation-free. While we will not be able 2018 63% responsible sourcing long-term sustainability of our business. Our 2019 70% to meet our target of raw materials being responsible sourcing program plays a key role 2017 57% completely deforestation-free by 2020, 2017 63% toward achieving this. It helps us to know 2018 63% Our commitment primarily due to not wanting to exclude 2018Raw materials that are traceable, 72% where our ingredients come from and how 2019% of the volume of our priority categories70% smallholders and small-scale farmers from 2019 76% Implement responsible they are produced, and to address our supply chain, we do expect the figure to be 2017 63% environmental and social issues such as 2018 72% sourcing in our supply chain above 90%. We will continue to work with deforestation, human rights and animal 2019 76% and promote animal welfare smallholder farmers and large suppliers to be welfare. Through responsible sourcing close to 100% deforestation-free within the practices, we can have a positive social and Our objectives next 3 years. Read more about our work to environmental impact on the communities By 2020: For Tier 1 suppliers, over 80% of the eliminate deforestation from our supply chains. with which we work. total spend and volume sourced from audited Promoting human rights in our and compliant suppliers What we are doing supply chains In progress We work with our suppliers and partners to Human rights abuses have no place in our address supply chains risks. However, real By 2020: For upstream, 80% of the spend business activities; respect for human rights transformation requires working beyond our and volume of our priority categories to be is embedded in our values, activities and own supply chains. We are collaborating with traceable and 70% to be responsibly sourced policies. However, some of the most pressing NGOs and industry peers to create sector- human rights challenges are found in global In progress wide approaches, share know-how and bring agricultural supply chains. We have solutions to scale. developed a set of salient issues to help us maximize our impact and are training all our Driving transparency employees on human rights. By taking action We believe that disclosing information about to respect and promote the rights of workers the sourcing of high-risk commodities is in our supply chains, we can transform the essential to build trust and ensure lives of the most vulnerable. Read more about accountability. We have published a list of how we assess and address human rights direct suppliers, upstream locations and impacts across our business. countries of origin, as well as total volume sourced, for our 15 raw materials. We also Promoting animal welfare advocate increased transparency, and We made good progress in 2019 on our harmonized disclosure and reporting at commitment to source only cage-free eggs in industry level. Europe by 2020 and are on track to meet our target of 100%. We are working with the Tackling deforestation Global Coalition for Animal Welfare to explore Over the past 10 years, we have invested in how this commitment could be expanded to ending deforestation across our supply chain. the rest of the world. We have developed an integrated approach, combining supply chain mapping, Read more about this commitment certification, on-the-ground verification, satellite monitoring and landscape projects. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 29

Why it matters Improving farmer economics through the Nescafé Plan Responsible coffee Coffee is one of Nestlé’s most important commodities. Globally, demand for coffee Our field programs, which we have developed sourcing continues to rise, but with limited arable land through the Nescafé Plan, support measurable available and with other crops competing improvements in productivity and quality. with coffee for space, there are considerable Together with our partners on the ground, we Our commitment challenges for producers. Further significant continue to train farmers in best agricultural Continuously improve our challenges include low coffee prices, primarily practices, cost management and business green coffee supply chain resulting from temporary oversupply, and the skills. In 2019, 7228 farmer training sessions effects of climate change in coffee-growing were carried out. Our objectives regions across the world. Thanks to our partnership with the By 2020: 70% of the total Nescafé coffee Rainforest Alliance, we measure our impact supply to be responsibly sourced What we are doing in 12 countries, enabling us to support the In progress As per the Coffee Barometer report 2018, revitalization of coffee farms and achieve Nestlé’s program to responsibly source better results for farmers and the environment. By 2020: to improve the quality, coffee and improve farmer livelihoods and Nescafé Improving labor rights in Mexico and Reviving coffee growing quantity and sustainability of its coffee coffee landscapes is the largest in the world. the Philippines in Zimbabwe supply chain by distributing 220 million Our Nescafé Plan and Nespresso AAA We worked with two NGOs, Verité and Through its Reviving Origins coffee plantlets Sustainable Quality Program represent a Certificadora de Productos Sustentables program, Nespresso invests in In progress CHF 78.2 million investment in 2019. (PPS), in 2019 to improve workers’ labor rights reviving coffee production in We remain on track to meet our 2020 targets. in Mexico, and partnered with coffee certifier regions that have been blighted By 2020: Nescafé to improve coffee In 2019, 65% of our total coffee supplies was 4C Services to conduct a scoping study in the by conflict, economic hardship farm economics in at least four responsibly sourced, with some major Philippines. PPS then visited 293 medium to or environmental disasters. In coffee-sourcing countries markets, such as Brazil, Japan and Thailand, large farms during harvest time to carry out 2019, we launched two new In progress making significant advances. During the year, specific labor rights assessments. Nine farms coffees, Zimbabwe and Cafécito we also passed the milestone of 200 million within, or related to, our supply chain were de Puerto Rico, bringing to life By 2020: Nescafé to monitor and improved coffee plantlets distributed identified with Child Labor risks at the time of the work carried out with farmers improve labor rights in at least two to growers. the visits. From these nine farms, we in these regions. coffee-sourcing countries requested our suppliers to remove five from In progress The share of coffee in Nespresso’s permanent our value chain. For the remaining four, Read more online range sourced through the Nespresso AAA corrective actions were undertaken and By 2020: Source toward 100% of the coffee Sustainable Quality Program reached 95% in followed up locally as a condition for these for Nespresso’s permanent range through 2019, keeping us on track to achieve our farms to continue supplying us coffee. In the its AAA Sustainable Quality Program on 2020 objective. We are also positioned to Philippines, 4C Services identified issues coffee sourcing meet our target of planting 5 million trees in including noncompliance with local minimum In progress AAA coffee farms and landscapes to combat climate change. wage legislation and a low level of school enrolment. We are assessing the situation and identifying root causes and potential solutions to address and rectify this.

Read more about this commitment Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 30

Why it matters We made further progress on distributing new, higher-yielding cocoa plants to farmers Nestlé Cocoa Plan The Nestlé Cocoa Plan aims to help farmers in Ghana, but in Côte d’Ivoire the government address the challenges they face through does not allow companies to distribute three pillars – better farming, better lives and Our commitment planting material. better cocoa. Activities such as training in Roll out the Nestlé Cocoa better agricultural practices, distributing Better lives Plan with cocoa farmers higher-yielding plants, promoting gender Tackling child labor equality and tackling child labor help farmers In 2019, we released our second Report on Our objectives to improve the quality of their products as Tackling Child Labor, providing further By 2025: Source all cocoa for Nestlé well as their income and livelihoods. insights into the progress made by our Child confectionery through the Nestlé Labor Monitoring and Remediation Cocoa Plan What we are doing System (CLMRS). New Through the Nestlé Cocoa Plan, we have The number of children leaving child labor – announced we intend to source 100% of the being free from carrying out hazardous tasks By 2020: Source 230 000 tonnes of cocoa for Nestlé confectionery – around across two inspection visits in six months – cocoa through the Nestlé Cocoa Plan 300 000 tonnes – by 2025 and so will increased to 2459 (29% of children who have Helping cocoa Discontinued* continue our tonnage growth. This renewed received two visits) in 2019. Our focus on communities save objective was introduced as we will not meet education saw four more schools refurbished our previous 2020 objective of sourcing The Village Savings and Loans or built, and we maintained our cooperation Association (VSLA) program 230 000 tonnes of cocoa through the Nestlé with the Jacobs Foundation on bridge enables communities to save, Cocoa Plan. schools, helping at-risk children reintegrate invest and loan to those needing Tackling deforestation into normal schools. assistance. Currently, 2773 Deforestation remains a major issue in cocoa farmers within the Nestlé Cocoa Better cocoa regions, and Nestlé continues to be part of Plan participate in VSLAs. Certification challenges the Cocoa & Forests Initiative to combat this. Some of our co-operatives failed certification We distributed over 420 000 shade trees Read more online audits in 2019 and despite assistance were globally in 2019 and completed the mapping unable to pass re-audits. This is unfortunate of all Nestlé Cocoa Plan farmers in Côte both for the farmers and for Nestlé, but is a d’Ivoire and Ghana. Read more about our result of more rigorous auditing, which is in approach to deforestation. the long-term interest of the credibility Better farming of certification. Improving farming practices We continued our focus on farmer coaching Read more about this commitment, including detailed information on the Nestlé Cocoa Plan KPIs and pruning. So far, 729 farms have been pruned, which will result in increased yields and incomes. Farmer demonstration plots have shown up to a threefold productivity increase. * Despite significant progress, we will not meet our 2020 objective and so have revised our plans and announced a renewed objective for 2025 Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 31

Respecting and promoting human rights Why it matters Issues around human rights go far beyond any company’s supply chain, and solving Human rights abuse has no place in all our them is a long-term challenge. In 2019, the activities. We take our responsibility to ensure FLA created a new committee dedicated to human rights are respected and upheld agricultural supply chains to coordinate throughout our value chain very seriously. efforts on these issues. As a business that Safeguarding the people who work for or has been working with the FLA and others to with us helps build a resilient, stable and lead on human rights for many years, Nestlé sustainable supply chain. It is an essential has been appointed to chair this new part of how we as a business live our values. committee, enabling us to drive its future Our contribution work across the industry. Our human rights work is embedded in our activities and policies, supported by training on key topics for all employees. Our biggest challenges are found in our supply chains, and we have a particular focus on addressing these issues. Tackling human rights abuses requires a Our commitments to respecting and Our work on respecting and collaborative effort with suppliers, promoting human rights promoting human rights governments, NGOs and other stakeholders. contributes to the following SDGs: 32 Assess and address human rights In particular, we work closely with expert impacts across our business activities organizations such as the Danish Institute for Human Rights (DIHR), the Fair Labor 33 Improve workers’ livelihoods and protect Association (FLA), the International Cocoa children in our agricultural supply chain Initiative, Verité, Issara Institute, Earthworm 34 Enhance a culture of integrity across the Foundation and Proforest. These organization collaborations help us understand the How we map our material issues challenges and their underlying causes. 35 Provide effective grievance mechanisms to the UN SDGs and their targets Together, we design and implement to employees and stakeholders interventions that have a real impact. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 32

Why it matters Rolling out human rights training Assess and address Our values embed respect for the human Throughout 2019, we continued to roll out our rights of everyone who works for or with us, human rights training program, developed human rights impacts throughout our business activities. We with the DIHR. 23 708 additional employees believe that upholding the human rights of received this training in 2019. We will everyone who works for or with us is essential continue to train as many employees as Our commitment to making our business activities and supply possible; however, we will not meet our Assess and address human objective of training all Nestlé employees on chains more resilient, stable and sustainable. Tackling child labor in our rights impacts across our human rights by 2020. While the program What we are doing was initially developed as an online training cocoa supply chain business activities tool, two-thirds of our employees do not have All chocolate for KitKat is Working with the Danish Institute of Human access to computers, so an offline platform sourced through the Nestlé Rights (DIHR), we have identified a set of Our objectives has also been developed. Cocoa Plan. Through our Cocoa 11 salient human rights issues. These are the By 2018 (2020): Carry out six human Plan we work to improve the lives issues that carry the risk of the most severe rights impact assessments in our upstream Implementing action plans of farmers and address the root negative impact (defined by the scope, scale supply chain* We have continued to work with partners to causes of child labor in our cocoa and remediability of the impact) on rights In progress implement action plans. We have made much supply chain. holders through our activities and business progress on child labor in Côte d’Ivoire and By 2019: Have a functioning governance relationships, and that have the highest Ghana, as well as in our hazelnut supply chain Read more online structure in place in all markets that looks likelihood of occurrence. in Turkey. after human rights risks and opportunities We are currently reviewing these issues, An effective governance structure Achieved determining how we can focus our activities A toolkit for Market Compliance Officers to for the biggest positive impact. We are support the establishment of a governance By 2020: Train all Nestlé employees on developing a list of sites, commodities and structure to manage risks and opportunities human rights geographies where our salient issues arise, associated with human rights at market level In progress to ensure the risks are measured and tangible was launched in 2018. As of 2019, all markets action plans are in place. have the structure in place.

Read more about this commitment

* Our partner the Fair Labor Association has an ongoing program of assessments in our upstream supply chain, which will inform our human rights work. Because of this, we have extended this objective to 2020 Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 33

Why it matters Providing effective grievance mechanisms Protecting workers Nestlé is opposed to all violations of human We work with suppliers and partners to ensure workers in our supply chain have Tackling Child Labor rights, including breaches of labor rights. In 2019 Report and children total, 7 of our 11 salient issues involve labor access to effective grievance mechanisms, rights and are associated with our agricultural and we are using new technology to supply chains. We have a particular focus on strengthen this. In 2019, we piloted a project Our commitment protecting children so they can gain an reaching nearly 6000 workers at Sime Darby Improve workers’ livelihoods education to help them and their Plantation, a palm oil supplier in Malaysia. communities have better futures. The system uses a cutting-edge mobile and protect children in our platform to assess human rights risks, deliver agricultural supply chain What we are doing mitigation plans and track progress, while workers can access communication channels Tackling child labor Our objective in the form most appropriate for them. In Our second Report on Tackling Child Labor By 2020: Start reporting on the number of Thailand, we are working with the Issara confirms that our Child Labor Monitoring and workers in agricultural supply chains having Institute to give workers access to a Remediation System (CLMRS) is working benefited from our interventions on all salient smartphone app that provides them with well. By the end of 2019, we had identified labor rights issues shared information, advice and support. Reporting on child labor more than 20 000 cases of child labor, issues In progress Read more about our work to promote Our second Report on Tackling we could not have identified before the human rights. Child Labor in our cocoa CLMRS was implemented. The high number supply chain was published of cases illustrates the deep-rooted nature of Read more about this commitment in December 2019. Covering the issues, which go far beyond our own sourcing in Côte d’Ivoire, the supply chain. It also demonstrates the report highlights the scale effectiveness of our system in identifying and root causes of child labor, them – without which they cannot be and our efforts to provide addressed. This information provided through remediation for children our CLMRS means we are able to address and families. incidences of child labor more effectively. The report also details our remediation Read more online

activities, such as providing birth certificates and access to education. CLMRS means that Nestlé can assess the magnitude of the issue of child labor in the supply chain. Our child labor report is part of our efforts to be as transparent as possible about the issue, the causes and the actions we take to address it. Read more about our work in the cocoa supply chain. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 34

Why it matters Reinforcing compliance through leadership CARE audits 2019 Our corporate toolkit is now available to all Our culture of business A strong culture of business ethics and Audits carried out 198 managers, encouraging them to reflect on integrity is an enabler for our business and Locations covered 362 ethics and integrity operations, enhancing and strengthening a their role as leaders. This toolkit can be mindset of ‘doing the right thing for the right accessed globally through an e-learning Improvement 293 reason’. Through this, we continuously foster platform and by new employees as part of opportunities (gaps) Our commitment creating shared value for our business and their induction program. Developed in identified Enhance a culture of integrity activities, as well as for our consumers, English, the materials can be translated by Gaps closed 125 across the organization shareholders and communities. markets according to their needs. in year The toolkit includes actual (adapted) case Our objectives What we are doing studies, as well as press articles and videos of Read more online By 2019: Markets reinforcing compliance We believe there are two key elements for further examples and discussions. The training as a leadership responsibility based on a compliance: reinforces the roles and responsibilities of corporate toolkit for training managers leaders to do the right thing. 1. Enabling and protecting: our Compliance on business integrity Program is an enabler for Nestlé’s business Measuring compliance through CARE audits Achieved and operations and protects Nestlé’s Our compliance audit program, CARE, reputation. independently assesses compliance with key By 2020: A proactive review is conducted principles. Detailed information on the audit for our compliance activities and policies in 2. Doing the right thing, for the right reason, findings. light of our evolving product portfolio based on respect and mutual trust. In progress We encourage employees and external Read more about this commitment stakeholders to report any practice or behavior at Nestlé that is inappropriate or illegal. We believe that businesses only thrive when they are ethically sustainable and reflect stakeholder needs. We also continually foster a culture of compliance, including statements from Market Heads, Compliance Officers’ annual messages to employees, campaigns, posters and newsletter articles. This reinforces a ‘speak up’ culture and awareness, as well as trust in the Nestlé Integrity Reporting System. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 35

Why it matters Engaging employees on our internal Nestlé Integrity Reporting System (2019) reporting system Grievance mechanisms To uphold mutual trust and respect and Number of messages 1740 ensure a sustainable supply chain, it is In 2019, we received 1740 messages through received the Integrity Reporting System, covering and remediation essential that employees and other Number of cases 1496 issues including abuse of power and/or stakeholders have access to safe, effective closed grievance mechanisms. These mechanisms mobbing/bullying, labor practices and Our commitment discrimination. We also received 1360 Number of cases 474 must ensure remediation for any violations substantiated Provide effective grievance that are substantiated. questions from employees seeking mechanisms to employees compliance advice, demonstrating that What we are doing employees are engaging with the system. Tell us (2019) and stakeholders In 2019, we carried out a major review of the Number of messages 1178 Raising awareness of our external reporting Our objectives effectiveness of our external (Tell us) and received channel – Tell us By 2019: Review grievance systems’ internal (Nestlé Integrity Reporting System) Number of cases 907 is an independently operated system effectiveness with internal and external grievance mechanisms, including a three- Tell us closed available to all stakeholders. We have been stakeholders to define improvement year trend analysis of grievances. scaling up awareness of the program through Number of cases 53 opportunities The review confirmed the systems’ overall the Nestlé website. substantiated Achieved effectiveness, with some learning points. For example, while there is active use of the In 2019, we worked closely with Nestlé’s Public Read more online By 2020: Grievance systems improvements systems in some countries, others have low Affairs and Nestlé Waters’ Sustainability implemented in pilot markets volumes of complaints. We are working to teams to incorporate Tell us into Customer In progress understand this and build sufficient trust in Relation Program guidance and questionnaires the system. There is also a potential lack of used by Nestlé Waters. Communication knowledge and awareness of the Integrity pilots are currently planned for Nestlé Reporting System in some countries. Waters factories in five countries, using To address this, we reinforced a ‘speak up’ existing channels. In collaboration with our culture and communication around the Nestlé Responsible Sourcing team, we are working Integrity Reporting System in some countries on the visibility of the existing systems in in 2019. our value chain. Our aim is to build an overall picture of the various grievance mechanisms In all cases, we have effective remediation in use, review their effectiveness and evaluate processes, including action plans and the way forward. communication back to employees on actions taken. We use benchmarks for the number of Read more about this commitment messages received and substantiation rates. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 36

Promoting decent employment and diversity Why it matters proportion of women in top senior executive positions to 30% by 2022, championing Nestlé employs more than 291 000 people equality throughout our business. We also around the world, from over 150 nationalities. run programs and initiatives designed to Our products are sold in 193 countries, and we empower women throughout our value chain. have more than 400 factories in 85 countries across the globe. Youth unemployment is a priority issue for Nestlé. We participate in a number of A business thrives when it has a healthy, initiatives across the world to help tackle diverse and engaged workforce that reflects youth unemployment, part of our ambition to society. Cultural diversity makes businesses help 10 million young people access stronger, bringing innovation and encouraging economic opportunities by 2030. We believe different ways of thinking. However, women this is very much an issue where the private continue to be under-represented across the sector can make a significant contribution. As world, in business management and a major employer globally, we are in a position agricultural communities alike. At the same to provide training and skills development to time, levels of youth unemployment are high, help equip young people for the workplace of contributing to global poverty and damaging the future. communities and their futures. For businesses like Nestlé, supporting young people to find Our Nestlé Global Parental Support Policy, Our commitments to promoting decent Our work on promoting decent employment, training and skills is essential to launched in 2019, is a progressive policy that employment and diversity employment and diversity securing a pipeline of future talent to ensure recognizes the diverse structures of modern contributes to the following SDGs: 37 Roll out our Nestlé needs YOUth initiative long-term success. families. The new policy provides gender- across all our operations neutral parental support for all employees. Our contribution Primary caregivers will be entitled to 38 Enhance gender balance in our Diversity and inclusion are embedded in our 18 weeks’ support (an increase from 14), workforce and empower women across practices at all levels throughout our operations. and secondary caregivers, who previously the entire value chain They were defined as being among our had no entitlement to leave, are now 39 Advocate for healthy workplaces and priorities for 2019 and included as a topic at the guaranteed 4 weeks’ leave. healthier employees How we map our material issues Nestlé stakeholder convening in March for the to the UN SDGs and their targets first time. Nestlé was also included in the Bloomberg Gender-Equality Index. We have a particular focus on gender balance. Through our Nestlé Gender Balance Acceleration Plan, we aim to increase the Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 37

Why it matters Launching the Global Alliance for YOUth Opportunities for Around the world, more than 170 million Over the past three years, the Alliance for people are unemployed (International Labour YOUth has offered more than 215 000 jobs, young people Organization), of whom more than one-third apprenticeships and traineeships to young are aged between 15 and 24. We believe that people in Europe and, more recently, South the private sector has an important role to America. In 2019, it expanded worldwide with Our commitment play to equip young people for their future. the launch of the Global Alliance for YOUth at Roll out our Nestlé needs Nestlé, as a major employer, can make a the World Economic Forum in Davos, YOUth initiative across all positive difference, providing employment, Switzerland. our operations training and skills development opportunities. The Global Alliance for YOUth is a business- Through apprenticeships, training programs driven movement, with 20 founding and other initiatives, we equip young people Our objective members: ABB, Adecco, BBVA, Cargill, with essential skills for the workplace. Cemex, Engie, EY, Facebook, Firmenich, By 2020: Nestlé needs YOUth initiative Mercer, Mastercard, Microsoft, Nestlé, commits to deliver: What we are doing Nielsen, Publicis, Rockwell Automation, SAP, •  45 000 to 50 000 apprenticeship and Nestlé needs YOUth, our global youth Starbucks, Vodafone and White & Case. Developing tomorrow’s traineeship opportunities initiative, focuses on three Action Areas: These organizations are passionate about entrepreneurs •  Continued readiness-for-work events working together to help young people • Employment and employability, providing Working with Ashoka, the world’s globally, with an increasing number of around the globe get the necessary skills to apprenticeships, internships, training and leading social entrepreneurs employees involved in such events thrive in the world of work, today and job opportunities for young people. network, as well as SociaLab, tomorrow. The Alliance has so far supported •  Enhanced collaboration with external • Agripreneurship, aimed at developing the which supports socially oriented 10 million young people to build employability partners to motivate them to join and to next generation of farmers. businesses, and UNESCO, we increase impact skills and aims to help 15 million by 2022. • Entrepreneurship, which supports organized the ‘Comprometidos’ •  20 000 to 25 000 job opportunities for young people to become entrepreneurs Read more about this commitment Challenge for young people under 30 years of age every year and sponsors sustainable entrepreneurs in Latin America. In progress entrepreneurial projects. Teams were invited to find solutions to issues such as In 2019, Nestlé needs YOUth helped sustainable packaging, education 900 000 young people around the world. and digital transformation, with more than 700 entries from 19 countries. Ten finalists took part in a week of training in Buenos Aires to accelerate their ideas and received online mentoring. The winning team will be announced in 2020.

Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 38

Why it matters Improving women’s livelihoods Empowering women From under-representation and a lack of We remain on track to achieve our equal pay in business management to 2020 objective to improve women’s livelihoods in the priority locations. Our commitment restricted access to training, tools and finance for agricultural workers, women In Brazil, Iran and India, we are surveying Enhance gender balance continue to face challenges throughout the farmers to assess the levels of equality in our in our workforce and global workplace. Building gender equality supply chain. The surveys explore issues such empower women across and supporting women’s rights, education as the tasks carried out by men compared to and empowerment are critical to creating those carried out by women and pay the entire value chain shared value for our business. Throughout differences. We are also working to improve our value chain, we work to tackle the the livelihoods of women in our hazelnut Our objective challenges women face, with particular supply chain in Turkey. Find out more about By 2020: The livelihoods of women have been focus on our five priority sourcing locations – our work in our hazelnut supply chain. improved in five priority sourcing locations Brazil, India, Iran, Kenya and Rwanda. In progress Many more examples of our activities and What we are doing initiatives across our business and value chain to empower women can be read online. Accelerating gender balance in our business

Having achieved our 2018 objective of Read more about this commitment increasing the managerial positions in Nestlé Empowering women in held by women, we launched our Gender coffee communities Balance Acceleration Plan in March 2019. Through the Nescafé Plan, we are The plan aims to increase the proportion working with our partner Coffee of women in the group’s top 200 senior Management Services to executive positions to 30% by 2022. Read empower 5000 women coffee more about how Nestlé is supporting farmers in Kenya and a further women’s empowerment. 1800 in Rwanda. Having trained participants in co-operative leadership, coffee production, confidence building and self- development, we are now focusing on supporting them on sustainable, efficient coffee growing. In all, we aim to support more than 18 000 coffee farmers over three years.

Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 39

Why it matters Nestlé’s proactive approach to health includes participating in key external forums Workplace health Nestlé’s purpose of ‘enhancing quality of life and networks. In 2019, we: and contributing to a healthier future’ begins and safety with each and every one of us. Our aim is to • Continued to be part of the Consumer inspire our employees to make informed Goods Forum, as a member of the decisions about their health and safety. Employee Health & Wellbeing working Our commitment group, with other food and beverage Advocate for healthy What we are doing companies. Participants share expertise workplaces and healthier Supporting employees’ health and best practices, producing resources employees We made good progress toward our such as guidelines and toolkits to support commitment in 2019 through our three major members in the implementation of health and well-being initiatives for employees. Our objectives global programs – Know Your Numbers By 2020: Offer our employees education, (KYNP), #HealthyLives and Stress and • Hosted the European Health Network Encouraging employees to early screening and programs that support Resilience. conference, enabling industry experts to eat healthier healthier lifestyle choices KYNP is designed to help us better exchange best practices and to drive the Through our #HealthyLives In progress understand our employees’ health profile and employee health agenda forward. training program, we are the impact of health issues on productivity so • Participated in Mental Health and Well- encouraging our employees to By 2020: Continue leading through we can design evidence-based interventions. being – Impact on Business, a conference in make healthier food and drink industry forums The program includes an initial screening Barcelona, where Nestlé was invited to choices at work. To support this, In progress (biometrics and health risk assessment), present its approach to mental health. 96% of our canteens now offer a followed by professional guidance leading to healthy meal option. targeted health support. By the end of 2019, Promoting safety in the workplace KYNP was available to 73% of employees, In early 2019, we developed and deployed who can choose whether or not they wish to Caring Leadership in Safety (CLiS) to simplify participate. The program has been and improve safety effectiveness; within particularly successful in Brazil, where there 5 months, 13 markets had adopted CLiS. This are already 13 421 participants (92%), and in program will continue to be deployed Turkey, with 1321 employees (79%) taking in all markets. part. Read more about KYNP, #HealthyLives During the year, we incorporated data on near and . Stress and Resilience misses with high-risk potential into our safety and health performance analysis, enabling us to identify preventative measures across the value chain.

Read more about this commitment Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 40

For the planet 2030 ambition: A third of our factories (189) now Stewarding resources use 100% renewable electricity and the environment To strive for zero environmental impact in our operations

Our business must contribute to ensuring Acting on climate change that society lives within planetary Climate change cannot be addressed boundaries. This means protecting without driving transformative action. In biodiversity and natural resources while 2019, we committed to achieve zero net encouraging others to act responsibly. Our greenhouse gas (GHG) emissions by 2050. ambition is to strive for zero environmental We are speeding up the transformation impact in our operations. We have public of our product portfolio to include more commitments to use responsibly sourced climate-friendly ingredients. We are also ingredients and renewable resources, focusing on scaling up renewable energy operate more efficiently, eliminate waste use and developing agricultural initiatives for and manage water responsibly. carbon storage, reforestation and biodiversity It is important that we target our efforts to protection. Taking these steps will help us tackle the most pressing environmental to cut our GHG in line with the ‘Business issues, including the impact of plastic Ambition for 1.5°C’ pledge we signed packaging, deforestation, the use of (pages 46 – 48). resources and the loss of biodiversity. These specific focus areas are all part of Safeguarding the environment our broader environmental ambitions and the Our business relies on healthy forests, soils following three impact areas. and oceans for the supply of ingredients. As such, we are committed to protecting Caring for water natural resources and biodiversity and Water is a precious resource that we are minimizing our environmental impact. We committed to protecting. We believe access work with industry partners to address to water is a basic human right. Through our biodiversity loss and we are committed to Caring for Water initiative, we are upgrading achieving deforestation-free supply chains. our facilities to reduce water use while also As part of our vision for a waste-free future, working with suppliers, especially in our our packaging institute is instrumental to agricultural supply chains, to improve water achieving our 2025 aim of 100% recyclable use efficiency. We engage with key or reusable packaging (pages 49–53). stakeholders in communities where we operate to improve access to potable water and hygiene services (pages 41–45). Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 41

Caring for water Why it matters as a company. Our efforts are externally reviewed, and we received a score of 100 in the As the climate changes, water-related issues Water-Related Risks section of the 2019 Dow will continue to grow in importance. While Jones Sustainability Index. this is a global issue, the impacts are felt on a very local level, with droughts in some We are driving change within our operations, localities and flooding in others. Farmers rely investing in technologies to improve the on water to grow the crops we source for our water efficiency of our manufacturing ingredients, making water-related risks a processes. However, our efforts do not stop critical issue for us – one that we want to at our own operations. We engage actively leverage our resources to alleviate. with suppliers, stakeholders and local communities to develop and implement The uneven distribution of water availability collective actions to address water scarcity. In worldwide is compounded by demographic 2019, we extended an existing partnership changes such as population growth and with the International Federation of Red Cross urbanization. These factors are putting and Red Crescent Societies to bring drinking increasing strain on available water sources, water infrastructure to more communities in with only 7 in 10 people able to access safely the Ashanti and Eastern regions of Ghana. managed drinking water services and 4 in 10 having access to safely managed sanitation Caring for Water Our commitments to caring for water Our work on caring for water services (WHO/Unicef). By 2030, the global demand for water will contributes to the following SDGs: 42 Work to achieve water efficiency and exceed supply by 40% (UN Environment). sustainability across our operations Our contribution Through our flagship Caring for Water Preserving water resources is not something initiative, we are addressing the issue in 43 Advocate for effective water policies one company can do alone. Reducing strain on four areas: and stewardship water requires the collaboration of a range of • Agricultural supply chains 44 Engage with suppliers, especially those partners, from suppliers to governments and • Communities in agriculture civil society. To target our actions, we launched • Factories How we map our material issues in 2018 a flagship initiative, Caring for Water. • Watersheds 45 Raise awareness on water conservation to the UN SDGs and their targets We have created a playbook that outlines all and improve access to water and the tools and information needed to Read more about our Caring for Water global initiative sanitation across our value chain implement and deliver on water stewardship Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 42

Why it matters Reducing water use in our facilities Improving water Water is vital to Nestlé’s operations, and we We are on track to meet our 2020 commitment are aware of our responsibility to use it as for Water Resource Reviews of our facilities, efficiency efficiently as possible. We annually assess with six completed in 2019. These audits are the water-related risks at our facilities – key to the continuous improvement in our combining the level of water stress in the operations, leading to actions in areas where Our commitment regions where we operate and our water use – efficiency and water management can Work to achieve water to determine the factories where water issues improve. Additionally, water stewardship efficiency and sustainability matter most. plans have been implemented at 27 factories, across our operations with all 27 certified by the Alliance for Water As many of our facilities are located in Stewardship by the end of 2019, including Our objectives water-stressed areas, we are permanently three sites in Pakistan. working to preserve local water resources By 2020: Reduce direct water withdrawals through robust auditing processes and In 2019, we implemented 371 water-saving per tonne of product in every product 3 technology improvements to ensure best-in- projects at our factories, saving 3.5 million m category to achieve an overall reduction class water efficiency in our operations. of water. We are also applying some of these of 35% since 2010 technologies to other areas of our business to Preserving water with Nestlé In progress increase the percentage of water being What we are doing Pure Life recycled and reused. By 2020: Carry out 40 new Water Resource Improving water use efficiency Nestlé Waters has been engaged Reviews in selected manufacturing facilities To ensure the constant improvement of Read more about this commitment in long-term collaborative in all greenfield sites our water use efficiency, all factories apply solutions, at both factory and In progress the ‘reduce, reuse, recycle’ approach. We watershed level, to preserve continually invest in innovative technologies the quantity and quality of and initiatives to reduce water use within local resources. our facilities and to improve the efficiency of our processes. By the end of 2019, we had achieved an overall reduction of water withdrawal per tonne of product of 31% since 2010, with a total withdrawal of 121 million m3. Considering the growth and changes in our product portfolio, this is a significant achievement.

Direct water withdrawal reduction, % variation since 2010 per tonne of product in our manufacturing operations

2010 to 2016 25% 2010 to 2017 29% 2010 to 2018 30% 2010 to 2019 31% Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 43

Why it matters We continue to support the AWS Standard and have implemented it in 27 locations. Water stewardship Water is a shared resource. Protecting it Using the AWS Standard and targeting must be a shared effort as well, especially third-party certification of our manufacturing advocacy in areas of scarcity. That is why we participate facilities, we can demonstrate that we have in partnerships and long-term projects best practices in place for water management to develop and evaluate solutions to the Our commitment and conservation. We have committed to challenges we face with regard to have all our Nestlé Waters factories certified Advocate for effective water water stewardship. policies and stewardship by AWS by 2025. Other relevant food and What we are doing beverage factories will also follow the Our objectives same process. Addressing water scarcity together By 2020: Continue to build the 2030 Water Reducing strain on global water sources Engaging with employees Resources Group public-private partnership cannot be achieved by one person or even Advocating for better water stewardship is a by adding one more state or country per year one company. It must be a collaborative business-wide endeavor. That is why we In progress effort. Multi-stakeholder platforms (MSPs) engage employees in what Nestlé is doing to bring together companies, local governments improve industry standards. In 2019, we By 2020: Continue supporting the Alliance Joining WASH4Work and other relevant stakeholders to create hosted an internal livestream seminar on our for Water Stewardship Standard by 2019 saw us formally join the water solutions. Targeting our efforts in areas Caring for Water initiative. Around 350 implementing it in five new locations WASH4Work initiative, where we operate, Nestlé is a member of employees followed the seminar, with senior encouraging greater private Achieved members of Nestlé Waters, Operations and a MSPs in countries such as Bangladesh, Peru sector engagement in SDG CSV Council member answering their and South Africa. Learn more about how efforts. Through this initiative, questions on Nestlé’s water use. these MSPs are driving changes in we will improve access to water, water efficiency. sanitation and hygiene (WASH) Read more about this commitment Expanding our commitments in the workplace, in communities Nestlé participates in several MSPs, including where our employees live and the 2030 Water Resources Group (WRG), the across supply chains. UN CEO Water Mandate and the Alliance for Water Stewardship (AWS). These platforms provide a strong support network for local stakeholder engagement. To date, the 2030 WRG has projects in 14 locations. Since 2018, the 2030 WRG has been hosted by the World Bank, moving from the International Finance Corporation. This relocation has enabled the group to scale up efforts. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 44

Why it matters Engaging with Most of our impact on water sources comes Making irrigation more accessible from agricultural activities in our supply to farmers our suppliers chains. It is by focusing our efforts here that Monitoring soil moisture before irrigating we can have the greatest impact. We work farms can improve water use efficiency by with our suppliers to improve the water Our commitment 10–15%. However, often the technology efficiency of their activities, tailoring efforts designed to do this monitoring is highly Engage with suppliers, to address the specific water management expensive, meaning it is not a viable option especially those in agriculture needs of various locations. for many farmers. We partnered with the Institute of Water Informatics at LUMS Our objective What we are doing University, Pakistan, to develop a more By 2020: Implement all action plans defined We take pride in the close, hands-on cost-effective irrigation smart sensor. It for improved water management in our relationships we have built with our suppliers, produces the same results but at a 10th of the upstream supply chain for coffee, sugar, and we work with them across our price, costing between USD 200 (CHF 193.8) dairy and cereals in high-priority locations agricultural supply chains to ensure water is and USD 250 (CHF 242.25). The sensors can In progress used as efficiently as possible. As of 2019, we help farmers to reduce water use by up to 12% have established 10 projects in 9 water- while increasing crop productivity by 15%. stressed areas. Read more about this technology.

We work closely with farmers to improve the Read more about this commitment water efficiency of their practices. In 2019, we collaborated with the Swiss Government and the Neumann Foundation to identify long- Improving irrigation efficiency term solutions to water use efficiency during in Vietnam and Brazil times of drought in Vietnam and Brazil. Read Water availability is a critical issue more about how we are collaborating to for coffee farmers in Vietnam. save water. Through our More Coffee with Less Water project, in partnership with the Swiss Government and the Neumann Foundation, we have worked with 50 000 coffee farmers to improve irrigation efficiency, resulting in water savings of around 50 million m3 of water since 2013 with no loss in product yield. The project included the development of WeGAP, an app that provides farmers with advice on water requirements.

Read more online Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 45

Why it matters Introducing WASH for business Access to water, Access to safe water, sanitation and hygiene We achieved our target to provide access to (WASH) is a basic human right, and yet only WASH to 600 000 beneficiaries in 2017, three sanitation and hygiene 7 in 10 people have access to safely managed years ahead of time, but that does not mean drinking water services and 4 in 10 to safely we will stop there. Encouraging people in managed sanitation services (WHO/Unicef). local communities to take ownership of their Our commitment As a global business, we recognize our ability access to water, sanitation and hygiene Raise awareness on water to help address the situation and to contribute facilities, we have continued to develop water conservation and improve to providing clean, potable water to people delivery systems. At the end of 2019, access to water and sanitation based on local needs and resources. 896 168 people around the world were benefiting from our WASH programs. across our value chain Bringing WASH services What we are doing to Ghana Our objectives Read more about this commitment Developing tools for due diligence In August 2019, we expanded By 2020: Implement detailed guidelines We want to direct our efforts to best address our partnership with the on human rights to water and sanitation the needs of our communities. To improve International Federation of due diligence in all Nestlé markets and key dialogue and engagement with the Red Cross and Red Crescent agricultural supply chains communities surrounding our factories, we Societies to develop a safe In progress developed a dedicated Community Relations WASH project in Ghana. The Process tool in 2019 and piloted it in five project will provide relief from By 2020: 600 000 beneficiaries in local countries: Colombia, Iran, Mexico, Pakistan strain on current potable water communities have access to water, and South Africa. With this tool, factory sources, which are insufficient sanitation and hygiene projects around managers and local staff can identify key for local communities. our manufacturing facilities and key stakeholders in the communities where we This development is part of our agricultural supply chains operate and start a dialogue with them. commitment to reaching 60 000 Achieved Concerns from local communities can be people in communities from identified and addressed if necessary. The where we source cocoa. tool will be rolled out throughout our markets in 2020. Read more online

Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 46

Acting on climate change Why it matters We have received external recognition for our efforts, achieving a score of 94 in the Climate change impacts are already apparent Environmental dimension of the 2019 Dow in shifting weather patterns, extreme weather Jones Sustainability Index and of 100 for events and reduced resource availability. Water, the highest possible score. We Everyone, globally, will feel the effect of these disclose our efforts to the CDP annually, and changes, from the farmers who supply Nestlé in 2019 maintained our position in the A list in to the consumers who enjoy our products. the Climate Change section. Under current forecasts, global temperatures We were also named as a Global Compact could rise by 3–4°C, an increase that would LEAD company in 2019 for our ongoing drastically impact people and the planet commitment to the Ten Principles of the UN alike. Interventions and business initiatives Global Compact and support of the SDGs. must be developed with increased urgency to deliver global reductions in greenhouse gas We know that climate change cannot be (GHG) emissions and higher levels of resolved without collaboration. We will resilience throughout the value chain. continue to develop more robust and wide- reaching initiatives as we move into the final Our contribution year of our 2020 commitments and work In 2019, we scaled up our efforts to reduce our toward 2050 ambitions. In 2019, we worked Our commitments to acting on climate change: Our work on acting on climate environmental impact, as well as that of our with Lancaster University to assess the change contributes to the 47 Provide climate change leadership suppliers. We announced a new ambition to impact of various climate change scenarios following SDGs: achieve zero net GHG emissions by 2050, in on our business and how we can disclose 48 Promote transparency and proactive, line with the UN climate pledge. To guide our the results in line with Task Force on long-term engagement in climate policy efforts, we have identified several key actions: Climate-related Financial Disclosures fight deforestation in partnership with other (TCFD) recommendations. organizations; reduce food loss and waste; work with dairy farmers to reduce GHG emissions; develop alternative packaging How we map our material issues solutions; and help suppliers manage soils to the UN SDGs and their targets through regenerative agriculture and tree planting. We are also investing more in renewable energy in our factories. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 47

Why it matters while emissions from distribution operations fell by 10.6%. In 100 major warehouses, Climate change Climate change is already having a global emissions have been cut by 35% to date impact. Food and agriculture is one of the versus 2014, exceeding our 2020 target. This leadership sectors that will be most impacted by climate was achieved through sourcing renewable change, and it is imperative that we act to energy, improving vehicle capacity utilization, limit GHG emissions and build resilient Our commitment and creating and rigorously monitoring farming systems so we can continue to action plans. Provide climate change leadership provide food for the world. This is, however, a systemic issue, and collaboration between Setting a 1.5°C target Our objectives businesses, consumers and governments As climate science has developed, so has our By 2020: As a member of RE100, aim to is needed to safeguard the climate and ambition to reduce our operational impact. In procure 100% of our electricity from renewable environment for future generations. September 2019, we announced plans to sources with the shortest practical timescale accelerate our commitment to tackle climate

In progress What we are doing change. With the expiration of our 2°C Increasing our renewable energy science-based target at the end of 2020, we By 2020: Reduce greenhouse gas (GHG) Rolling out plant-based procurement have committed to achieving zero net GHG emissions (Scope 1 and 2) per tonne of product products for the planet In 2019, we continued our commitment to emissions by 2050 and aligning our efforts in every product category to achieve an overall By launching more plant-based procuring 100% of electricity from renewable with the ambitious 1.5°C target outlined in the reduction of 35% in our manufacturing products with a smaller sources. 189 of our factories (approximately most recent Intergovernmental Panel on operations versus 2010 environmental footprint, we can one-third) now purchase 100% renewable Climate Change report. In progress support our aim to achieve net electricity, including our facilities in Western More than 90% of our GHG emissions occur zero emissions by 2050. Europe and most facilities in Latin America. By 2020: Reduce GHG emissions per tonne along our value chain*. We will address these Progress is underway to bring biomass of product by 10% in our distribution through a range of product developments Read more online boilers to some of our facilities in Spain and operations versus 2014 and collaborative actions with our suppliers. Malaysia, replacing current natural gas In progress Read more about how we are developing our installations. Learn more about our renewable climate change mitigation strategy. energy procurement. By 2020: Reduce GHG emissions per tonne Replacing synthetic refrigerants of product by 10% in the 100 major Cutting our emissions We are phasing out synthetic refrigerants warehouses we use versus 2014 Innovation is key to achieving significant with high global-warming potential, such as Achieved reductions in GHG emissions. More than hydrofluorocarbons (HFCs) in our industrial 100 new projects have been identified in the refrigeration systems. We are expanding our By 2020: Expand the use of natural Europe, Middle East and North Africa use of natural alternatives, including CO2, refrigerants, which do not harm the ozone (EMENA) area, including upgrading to LED ammonia, water, air and hydrocarbons. In layer and have a negligible impact on climate lighting, optimizing energy consumption 2019, we installed eight new units that use change, in our industrial refrigeration systems during non-production times, increasing natural refrigerants. In progress biomass steam usage versus gas usage and recovering heat energy. Read more about this commitment In 2019, overall Scope 1 and 2 emissions per tonne of product fell by 34% versus 2010, * Our GHG emissions are estimated following the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 48

Why it matters Engaging with investors Proactive engagement Climate change is a global issue and not We know our investors want to support one that can be tackled by just one person, companies that act sustainably and are on climate change one organization or one government. If transparent about their activities and greenhouse gas (GHG) emissions are to be developments. We maintain a dialogue with stabilized, let alone reduced, it is going to over 360 investors from across the globe Our commitment take everyone working together to combat through the Climate Action 100+ initiative. Promote transparency and damaging practices. Following the redefinition The initiative was designed to ensure that proactive, long-term engagement of the ‘safe’ limit of climate change from 2°C 100 systematically important GHG emitters, in climate policy to 1.5°C by the Intergovernmental Panel on including Nestlé, take necessary actions Climate Change, policy changes and climate against climate change. We also engaged Our objective initiatives need to be more ambitious than with investors through our collaboration with By 2020: Implement the Guide for ever before. As a global company, Nestlé is the WBCSD to understand what information Responsible Corporate Engagement in Climate well positioned to advocate for, and promote, they are interested in seeing reported and Policy developed by CDP, the UNGC, Ceres, long-term engagement in climate policy, both areas where we can enhance our disclosures. The Climate Group, the WWF and the World within and outside our organization. Read more about this commitment Assessing our resilience in Resources Institute What we are doing various climate change In progress scenarios Assessing our resilience We have collaborated with In June 2019, the Task Force on Climate- Lancaster University, UK, to related Financial Disclosures (TCFD) released build a more robust review of the a status report, noting a low level of corporate impact of different climate disclosure on the resilience of business scenarios on three of our key strategies under different climate scenarios. commodities: coffee, wheat and While we already report risks of climate dairy. Our first disclosure on the change to our performance under the project was made in our Annual financial review section of our annual report, Review 2019 (p65), in line with in 2020 we are – for the first time – disclosing TCFD requirements. the risks to Nestlé of climate change in our annual financial report, in line with the Read more online recommendations of the TCFD. We are one of six food, agriculture and forest products companies collaborating with the World Business Council for Sustainable Development (WBCSD) to create sector guidance best practice for addressing TCFD requirements and recommendations. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 49

Safeguarding the environment Why it matters Our contribution We depend on forests, soil, oceans and the In 2018, we announced our ambition to make climate – not only for a sustainable supply 100% of packaging recyclable or reusable by of ingredients but also to maintain 2025 in a bid to prevent any of our packaging environmental conditions suitable for life. ending up as litter in landfill or in the oceans. Yet, globally, resources are being used in an We made strong progress in this area in 2019, unsustainable manner. Indeed, if the whole with the roll-out of recyclable and recycled world consumed at the same rate as the packaging for several of our brands. Our richest countries, we would need between first-in-the-industry packaging science three and five Earths to sustain consumption institute is enabling us to accelerate work on (Global Footprint Network). If these sustainable packaging solutions. unsustainable habits go unchecked, the The topic of biodiversity is of particular knock-on effects on people, natural habitats importance for business in 2020, with both and animals will be drastic. Predictions the 15th Convention on Biological Diversity state that if we take a business-as-usual Conference of the Parties and the IUCN approach to production, waste and diets, World Conservation Congress taking place. by 2050 the extinction rate could reach Driven by this, the One Planet Business for 1043 extinctions per million species (Eat- Biodiversity (OP2B) coalition, of which Nestlé Our commitments to safeguarding the Our work on safeguarding the Lancet Commission report). is a signatory, is an opportunity for Nestlé and environment: environment contributes to the While we consume more resources, we are other members to demonstrate leadership in following SDGs: 50 Improve the environmental performance simultaneously producing more waste, with a biodiversity protection. Through this initiative, of our packaging predicted 3.4 billion tonnes of waste we will work with other member companies produced annually by 2050 (World Bank). to accelerate transformational change in food 51 Reduce food loss and waste Each year, approximately 8 million tonnes of and agriculture systems to protect 52 Provide meaningful and accurate plastic is dumped in the ocean (Plastic biodiversity, for the benefit of people and environmental information and dialogue Oceans), while a third of all food produced for planet alike. In 2019, Nestlé rolled out a new human consumption is wasted or lost (FAO). business approach, centered around 53 Preserve natural capital How we map our material issues protecting and restoring natural spaces and to the UN SDGs and their targets working with farmers to diversify their crops and land use. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 50

Why it matters Managing packaging waste and marine littering Improve packaging The issue of packaging waste, notably plastic waste, is of particular public concern. Collective action is vital to ensuring packaging performance However, packaging is necessary for food stays out of the environment. In 2019, we safety and quality, protecting food in achieved our commitment to drive alliances transportation, extending its shelf life and with relevant stakeholders in 10 markets. We Our commitment reducing food waste. This makes food and now have 15 initiatives running across the Improve the environmental beverage packaging a unique challenge for world, including Project STOP, a collaborative performance of our packaging Nestlé and our industry. We must develop project to prevent leakage of waste into the solutions that reduce packaging volume and environment. Read more about how Project Our objectives impact without compromising on protection. STOP is improving community recycling By 2020: Continue to systematically analyze We envision a future without waste, and this efforts and infrastructure. and optimize our packaging portfolio, means not only increasing plastic recycling, Through our Nestlé Cares program, launched avoiding the use of at least 140 000 tonnes but also identifying alternatives, whether in in June 2019, 13 000 employees participated from 2015 to 2020 the form of new delivery systems or materials. in beach cleanups in over 80 countries. With Achieved the help of over 900 partners, such as NGOs, Developing packaging-free What we are doing local governments and schools, 140 tonnes of delivery systems and reuse By 2020: Drive alliances with relevant Achieving our plastic ambition waste was collected, separated and recycled. models stakeholders to address packaging We have already achieved our 2020 Developing our approach to packaging In a few selected countries, waste management and marine littering objectives, but we know we must go much Nestlé Purina now sells dry pet in 10 relevant markets further, which is why we are now focused Several products, including our Yes! food without packaging to Achieved on a new commitment to make 100% of our snackbars and Poland Springs water, customers who can bring and packaging recyclable or reusable by 2025. now come in recyclable or 100% recycled fill their own containers. This is ambitious, with much work required packaging. We are also piloting alternative to achieve it, but we are determined to get delivery systems to offer consumers the same products they know without Read more online there. In 2019, 87% of our packaging was  recyclable or reusable. We used 4.6 million the single-use packaging. To guide our tonnes of packaging material in 2019 (2018: activities beyond 2020, we have developed a 4.7 million tonnes). three-pillar roadmap. Read more about our packaging plans. We are also working to increase recycled content. In 2019, 26% of packaging used in Read more about this commitment, including our operations contained recycled materials. information on the global plastic tonnage and use by type For plastic packaging, we used 2% recycled plastic. Of our packaging materials, 37% were renewable. We have exceeded our commitment to eliminate 140 000 tonnes of packaging by 2020. In 2019, the volume of packaging avoided since 2015 rose to 142 663 tonnes. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 51

Why it matters Reducing operational waste Reducing food loss Approximately 1.3 billion tonnes of food is Thanks to concentrated efforts, we are on lost or wasted annually (FAO). Half of this is track to achieve zero waste for disposal in all and waste nutrient-rich foods such as fruit and Nestlé sites, achieving absolute reductions of vegetables (WWF). Food losses are 96% since 2009. In 2012, we began work in our measured not only by nutritional value losses on-site restaurants, engaging employees in Our commitment but also by environmental impact. It has been cutting food waste. In our headquarters Reduce food loss and waste estimated that, by 2050, greenhouse gas restaurant, we have been measuring and (GHG) emissions from food loss and waste reducing food loss and waste for the same Our objectives time period. As of 2018, the initiative has could reach 5.7–7.9 Gt CO2e annually (WWF). By 2020: As a member of Champions 12.3, Food loss and waste occurs throughout the resulted in food waste per tray decreasing accelerate progress toward halving value chain, from farm production, handling from 70.32 g per day to 47.25 g, amounting to food waste by 2030 and storage issues to packing and distribution 838.67 tonnes less food waste annually In progress at the factory and, finally, during consumption (between 2012 and 2018). All waste produced by the consumer. is recycled into liquid fertilizer or transformed By 2020: Achieve zero waste for disposal into biogas. Next year, we will be piloting in our sites What we are doing automated weight technologies to measure Clarifying what food labels mean In progress Cutting supply chain food losses daily food waste in different factories. In Europe and North America, As an active member of Champions 12.3, we By 2020: Make date labels understandable Read more about this commitment per capita waste is 95–115 kg continue our work toward target 12.3 of the to our consumers to reduce food waste at every year (FAO). Often this is a UN SDGs: by 2030, halve per capita global consumption stage result of poor meal planning or food waste at the retail and consumer levels misunderstanding of food labels. In progress and reduce food losses along production and We are simplifying our labels to supply chains, including post-harvest losses. make it easier to understand the In 2019, we identified five key commodities difference between ‘best before’ upstream in our supply chain where losses and ‘use by’ to help reduce were most significant: palm oil, cereals, dairy, unnecessary food waste. fruit and vegetables. Taking this information,  we can locate hotspots for food waste and loss and work with farmers to devise solutions. Read more about how we work with farmers to cut food losses. Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 52

Why it matters Cutting waste in the home Promoting sustainable Consumers want to act more sustainably. Sustainable consumption throughout our With our international scale and reach, value chain is only possible if our consumers consumption we are ideally situated to provide product feel engaged. That is why we have developed information that helps them do so. With direct a series of guides, stories and advice on how access to millions of people across the world, they can cut food waste in the home. From Our commitment we can use our products and platforms to recipes using leftovers to meal planning to Provide meaningful and encourage positive change in terms of reduce unnecessary food purchases, learn accurate environmental recycling, energy efficiency and sustainable how we are inspiring consumers. information and dialogue food choices on a global scale. Read more about this commitment

Our objective What we are doing By 2020: Improve the availability and Providing consumers with consistency of fact-based environmental environmental information information for consumers on our digital We want our consumers to be able to access and other channels environmental information easily, which is Highlighting the benefits of In progress why 84% of the pages on our corporate leftovers in Greece website now display fact-based information Through an online video series, in a visible and easy-to-understand format. Maggi consumers in Greece are However, we do not want to keep encouraged to explore the environmental information just online. We are benefits of utilizing leftover food currently looking to update our Nestlé in healthy and tasty recipes. The Nutritional Compass to allow for sustainability Change Your Taste campaign has initiatives to be presented on packs as well. had 2.5 million views to date over several social media platforms and is having a positive impact on consumers, helping them to get creative with leftovers.

Read more online

 Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 53

Why it matters Halting deforestation Protecting natural We are a business that relies on raw By the end of March 2019, 76% of our materials. To ensure our success and protect agricultural raw materials are confirmed as capital the planet, we must work with suppliers and deforestation-free. While we will not meet our farmers to help them improve their practices. target of being completely deforestation-free by 2020, we anticipate being above 90% by Our commitment Water scarcity is a growing problem globally, 2020. We are working with smallholder Preserve natural capital while deforestation continues as areas are farmers and large suppliers alike to be close cleared for agricultural activities. We must to 100% deforestation-free within the next Our objective make use of the tools and expertise available three years. To this end, we will continue to By 2020: 70% of the volume of our 15 priority to us and do what we can to protect these act on different fronts: natural resources that are essential for a categories of raw materials have been • Using technology developed in partnership sustainable supply of our raw materials. assessed against our Responsible Sourcing with organizations such as Airbus, requirements and are compliant, Standard What we are doing including satellite monitoring and or improvement plans to preserve natural blockchain, to drive transparency and capital are ongoing Protecting, restoring and diversifying ensure accountability. natural capital Monitoring deforestation in In progress • Supporting smallholder farmers to conserve In 2019, 70% of the volume of our 15 priority our supply chain forests while improving their livelihoods. categories of raw materials was responsibly Over the last 10 years, we have sourced. As we continue to work toward our • Advocating for greater disclosure and for the developed an integrated overall commitment to preserve natural creation of sector-wide approaches to share approach to address capital we must maintain and improve on this. know-how and bring solutions to scale. deforestation risks in our supply We have developed a three-pronged chains through supply chain Read more about this commitment approach toward natural capital: protect, mapping, certification, on-the- restore and diversify. This approach supports ground verification, satellite our aims to reduce deforestation and monitoring and landscape minimize our impact on the ocean as well as projects. Satellite imagery from working with farmers to restore natural the Starling system, which we environments and support biodiversity. developed in collaboration with Read more about our approach. Airbus and Earthworm Foundation, has also aided our efforts and is now being used to monitor our entire palm oil supply chain.

Read more online

Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 54

Reporting and governance Our governance systems and approach to business ethics are fundamental to our organization. We publicly share these, as well as our comprehensive reporting processes, as outlined below.

Our performance in leading indices Doing business right Prioritizing key issues Awarding good work We are not driven by awards and recognition. Ethical principles are fundamental to To ensure our sustainability efforts keep The Nestlé CSV Prize is awarded every Nonetheless, we are proud to have our how we operate. This means zero up with a changing world, we conduct a two years to recognize and promote efforts and achievements in sustainability tolerance for fraud, bribery and materiality analysis every two years. initiatives that address nutrition, water acknowledged by world-leading ratings and corruption and increased efforts in the and rural development. rankings agencies: protection of personal data and open Materiality disclosure of tax payments. Creating Shared Value Forum Nestlé has been consistently listed Ethical business in the FTSE4Good responsible Talking to the right people investment index since 2011. We always seek the advice of the best Bringing new ideas to life experts and advocates to make our CSV Through the CSV Prize and our open Being transparent at all times business approach as robust as it can be. platform HENRi@Nestlé, we aim to Nestlé was ranked 1st out of 22 The tax we pay is an integral part of nurture the ideas and innovations that global food and beverage Creating Shared Value (CSV), and we Stakeholder engagement will shape the future. manufacturers in the 2018 Access to Nutrition Index (ATNI). believe it is good practice to openly disclose information about our taxes as Supporting innovative ideas Nestlé was rated AA by MSCI ESG part of being a responsible and Collaborating for Research for its performance on transparent organization. major change environmental, social and Aligning our ambitions and governance (ESG) issues. Taxation Collaboration is an essential element to tackle global issues like rising obesity, commitments with the UN Nestlé maintained its top scores in child labor and climate change. Sustainable Development the 100th percentile in the categories of Health & Nutrition and Putting our values Partnerships and collective action Goals (SDGs) Enviromental Policy, as well as at the heart of what we do Our commitments and ambitions are receiving a score of 100 in the Water category. Building our business on clear principles closely aligned with the 17 SDGs. and sound governance maintains the Contributing to the Global Goals Retained our place in CDP’s trust in the Nestlé brand and reduces Climate A list and rejoined CDP’s risk in the value chain. Water A list.

Governance and policies Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 55

Data scope and methodologies UN Global Compact Communication Where to find more information on Progress About this report Unless otherwise noted, the performance This document forms an integral data included in this report corresponds to Every year, Nestlé submits its Communication part of Nestlé’s UN Global Our 2019 Creating Shared Value companies that are consolidated in our on Progress to demonstrate its commitment Compact (UNGC) Communication Progress Report provides our financial statements. to the Ten Principles of the UN Global on Progress, together with: Compact and support of the SDGs on shareholders and stakeholders Our safety and health data covers 275 557 human rights, labor, environment and with a summary of our 2019 employees, while our environmental data anti-corruption. performance against our refers to factories and warehouses, with the exception of some recent acquisitions. UN Guiding Principles Reporting commitments. We provide further Framework detailed information online. Our climate change disclosures conform with The UNGP Reporting Framework offers the Climate Disclosure Standards Board comprehensive guidance for companies to framework requirements. We also follow the report on salient human rights issues. This is standards of the Greenhouse Gas Protocol to Our Annual Our CSV in line with the UN Guiding Principles on establish our GHG inventory. Review web pages Reporting period, scope Business and Human Rights. Our human rights reporting meets the Tier 1 assurance and boundaries See our response to the CDP Investor Information Request for comprehensive indicators of the UNGP Assurance Framework. Go to www.nestle.com/CSV, This report covers our global operations for details of our climate change disclosures We address our responses to the Framework where you can also find more the calendar year ending December 31, 2019. and performance. It contains data for wholly owned companies in our Index of Answers. detailed governance information, and subsidiaries but excludes joint ventures Reporting frameworks Audience performance data, case studies and suppliers unless specifically stated. and additional audio and video Our CSV report serves as a transparent tool, ‘Markets’ refers to our business and/or We maintain ongoing dialogue with a wide content. outlining our performance in 2019. It has been activities at a national level, while ‘Zone’ range of stakeholders interested in this produced in compliance with several Our Human Rights Index and GRI refers to a geographic group of markets. report. They include investors, non- reporting frameworks. governmental organizations, ESG services, Content Index are available as This report is focused on progress to date separate PDFs. Global Reporting Initiative consumers and suppliers. against our commitments and objectives, The Global Reporting Initiative (GRI) is an Our Corporate Business which are based on the most material issues. Currency conversion international independent standards Principles are the basis of our These were updated during our most recent organization that helps businesses, All amounts in this report have been converted company’s culture and are materiality assessment in 2018. The process governments and other organizations to Swiss francs (CHF) using the exchange rates available as a PDF. reviewed economic, social and environmental understand and communicate their impacts reported in the consolidated financial issues that are of most concern to our Read more: on issues such as climate change, human statements of the Nestlé Group 2019. external stakeholders against those that pose rights and corruption. This report has been Explore our full GRI Content Index risks or present opportunities to Nestlé. The Contact us prepared in accordance with the See the awards and recognition we results have informed the content of this Comprehensive option of the 2016 GRI We hope you find this report engaging have received progress report and that of our CSV web Standards, and the Food Processing Sector and informative, and we continue to welcome pages, in line with the GRI 2016 Standards Supplement, and externally assured by Bureau your input and views: materiality principle (see Reporting Veritas. See the full GRI Content Index. [email protected]. frameworks). Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 56

Summary Assurance Statement Independent assurance from Bureau Veritas UK Ltd statement Bureau Veritas UK Ltd. (Bureau Veritas) has provided independent assurance to Nestlé We engaged a third-party SA (Nestlé) over the Creating Shared Value Progress Report 2019 (‘the CSV Report’) organization, Bureau Veritas, to published on the Nestlé website provide independent assurance (https://www.nestle.com/csv). The assurance for this 2019 progress report. This process was conducted in line with the requirements of the AA1000 Assurance process aims to provide assurance Standard (2008 with 2018 addendum) Type 2 to Nestlé’s stakeholders of the at moderate level of assurance. The scope of accuracy, reliability and objectivity Bureau Veritas’ work was limited to Nestlé’s head office based activities where Nestlé of the reported information and consolidates and reconciles data provided by to confirm that it covers our most its markets/countries of operation. The material issues. assurance was provided over all data and text included in the CSV Report and included an evaluation of the CSV Report’s alignment to GRI Standards and the RE100 criteria. It also included a review of Nestlé’s human rights reporting against the ‘Tier 1’ Assurance Indicators of the UN Guiding Principles Reporting Framework. Bureau Veritas’ full assurance statement includes certain exclusions, observations of good practices, recommendations for improvement, and a detailed assurance methodology and scope of work. The full assurance statement with Bureau Veritas’ independent opinion can be found at: https://www.nestle.com/csv/performance/ downloads. London, March 2020 Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 57

Nestlé in society and Creating Shared Value key performance indicators 2019 2018 Page GRI Our key performance Standards Economic indicators Total Group sales (CHF million) (a) 92 568 91 439 AR p1 Nestlé’s key performance Net profit (CHF million) (b) 12 609 10 135 AR p49 201-1, FP4 indicators (KPIs) provide metrics Nutrition (c) to measure and report Creating Products meeting or exceeding Nestlé Nutritional Foundation profiling criteria (as % of total sales) 80.5 82.5 201-1 Percentage of total sales volume of consumer products which have been changed for nutrition and health considerations 8.4 9.1 FP6, FP7 Shared Value, sustainability Products analyzed and improved or confirmed via 60/40+ program (sales, CHF million) (d) 34 166 32 823 416-1 and compliance. The following Products featuring Nestlé Nutritional Compass labeling (% of sales worldwide) (e) 96.4 95.6 14 417-1 performance summary forms Products with guideline daily amounts (GDA) labeling on front of pack (% of sales) (f) 88 87.3 14 417-1 part of our Communication Children’s and family products that provide Nestlé Portion Guidance (%) 61.9 65.4 15 417-1 on Progress to implement the Nestlé television advertising to children under 12 in compliance with policies on responsible marketing (%) 98.6 99.2 417-3 principles of the United Nations Total number of countries where the Nestlé Policy and Procedures for the Implementation of the WHO International 33 28 18 417-3 Global Compact (UNGC). Unless Code of Marketing of Breast Milk Substitutes practices were audited Infant formula marketing staff in higher-risk countries trained on the WHO Code (% of staff) (g) Discontinued 98.5 103-2 otherwise stated, performance Total number of Nestlé employees who had completed training in Breastfeeding and the WHO Code 1428 5883 18 103-2 indicators are for the calendar Rural development year ending December 31, 2019. Farmers trained through capacity-building programs 429 800 440 000 203-1

Percentage of purchased volume fully compliant with the Nestlé Supplier Code (h) 66 61 42 FP1

Water (l)

Total water withdrawal (million m3) 121 127 42 303-1

Total water withdrawal (m3 per tonne of product) 2.28 2.33 303-1 To provide transparency for our stakeholders, we have indicated the correlation between Environmental sustainability our KPIs, our commitments and Global Production volume Reporting Initiative (GRI) indicators in the Total production volume (million tonnes) 53 54.2 102-7 table opposite. Materials

The references in the GRI column relate to Raw materials used (million tonnes) 25 24 301-1 the applicable indicator from the 2016 Materials for packaging purposes (million tonnes) 4.6 4.7 50 301-1 GRI Standards. We report against these Standards in line with our material issues, Packaging source optimization (kilotonnes saved) 24 15 301-1 which are identified through our stakeholder Energy engagement process and shape our public Total on-site energy consumption (petajoules) 87.8 88.1 302-1 commitments. Total on-site energy consumption (gigajoules per tonne of product) 1.66 1.63 302-1

Total on-site energy consumption from renewable sources (% total) 20 18.7 302-1

Total direct energy consumption (petajoules) 59.4 60 302-1

Total direct energy consumption from renewable sources (% total direct) 12 12.5 302-1

Total indirect energy consumption (petajoules) 67.9 67.7 302-1 Creating Shared Value Individuals and families Communities Planet Reporting and governance Creating Shared Value Progress Report 2019 58

Nestlé in society and Creating Shared Value key performance indicators 2019 2018 Page GRI a) Does not include joint ventures Standards b) Includes Nestlé’s share in net result of joint ventures

Environmental sustainability continued c) Total Nestlé (F&B except CPW, NHSc, Pharma, Nespresso, CPW and businesses not in GLOBE Biodiversity reporting) excluding non-edible products (78.4% in Total size of manufacturing sites located in protected areas (hectares) (i) Discontinued 18.8 304-1 2016 with comparable baseline)

Emissions, effluents and waste d) In the 60/40+ program, Nestlé products tested with consumers must be preferred over the competitor’s. Direct GHG emissions (million tonnes CO2eq) 3.3 3.3 305-1, 305-2 Assessment results are valid for a maximum of three years if all parameters remain equal Direct GHG emissions (kg CO2eq per tonne of product) 62 62 305-1, 305-2 e) PetCare, Gerber Life, Nestlé Health Care Nutrition, Indirect GHG emissions (million tonnes CO eq) 2.3 2.5 305-1, 305-2 2 Wyeth Nutrition, other Nestlé Health Science Indirect GHG emissions (kg CO2eq per tonne of product) 43 46 305-1, 305-2 businesses and non-Nestlé-branded products in Nestlé Waters are out of scope Total water discharge (million m3) 67 75 306-1 f) Includes all F&B and Nestlé Waters except plain water. 3 Total water discharge (m per tonne of product) 1.27 1.39 306-1 It excludes joint ventures, Nestlé Nutrition, Wyeth Average quality of water discharged (mg COD/l) 55 41 306-1 Nutrition, Nestlé Health Science and specific category/ country exemptions By-products (kg per tonne of product) 31.5 30.6 306-2 g) As of 2019, the KPI on infant formula marketing staff in Waste for disposal (kg per tonne of product) 0.3 0.6 306-2 higher-risk countries trained on the WHO Code is no longer reported. Moving forward it will be included in Environmental sustainability governance the total number of employees trained in Manufacturing sites certified against ISO 14001 (% of total manufacturing sites) 96 96 103-2 Breastfeeding and the WHO Code

Human rights and compliance h) In 2016, scope extended to include service and indirect materials with target of 50% Total number of significant product recalls or incidents of noncompliance 12 6 416-2 i) Nestlé has decided to no longer report the total size of Total number of FTSE4Good countries of concern, and number in which human rights impact assessments have manufacturing sites located in protected areas. As a (j) Discontinued 12 103-2 been carried out on Nestlé operations measure of biodiversity this is now no longer seen as a Number of employees trained on human rights 125 321 101 613 412-1 materially important way to communicate our dependency and impact upon biodiversity Our people j) Tracking discontinued in 2019. Nestlé has moved to (k) Total workforce (number of employees) 275 628 308 301 102-8 conducting human rights impact assessments in the Total rate of new employee hires (%) (k) 12.6 11.1 401-1 upstream supply chain k) Covers Nestlé employees registered in HR system Total rate of employee turnover (%) (k) 17.3 15.7 401-1 (approximately 84% of all employees) CARE gaps identified related to Business Integrity (l) 49 67 102-17 l) CARE, our global external audit program, is conducted Of which: Minor 25 32 102-17 by three audit companies and verifies that all employees and sites we own or operate comply with Major 1 0 102-17 local legislation, our Corporate Business Principles Critical 0 0 102-17 and Code of Business Conduct. The audits take place every three years Observation 23 35 102-17 m) Training hours are based only on information recorded Total number of fatalities (employees, on-site contractors and on-site members of public) (k) 5 3 403-2 in the Learning Management System (LMS). The numbers would be higher if manually recorded training Average hours of training per year per employee (m) 23.8 42.4 404-1 hours were considered. Training hours per employee Leadership positions held by women (%) (n) 42 43.2 38 405-1 covers 100% employees in the system

Local Management Committee members native to country in developing countries (%) (k) 85.5 83.01 202-2 n) Nestlé has changed the definition of this KPI and moved from a definition driven of the job catalogue to a definition based on grades