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Creating Shared Value and Meeting Our Commitments 2017

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Good Food, Good Life Nestlé in society Creating Shared Value and meeting our commitments 2017 Full report Nestlé. Enhancing quality of life and contributing to a healthier future 2 A year of positive impact For individuals and families For our communities For the planet January Recognised by CDP as a global leader in tackling climate change and reducing carbon emissions across our supply chain. Nestlé was featured in CDP’s first-ever Supplier Engagement Ranking among 29 companies from over 3300 that were assessed. Participated in the launch of the Food Reform for Sustainability and Health (FReSH) programme to promote healthy, enjoyable diets using food produced with respect for our planet. March Nestlé Waters, through the NaturALL Bottle Alliance, announced a partnership with Danone and Origin Materials to develop a PET plastic bottle made from 100% sustainable and renewable resources. Launched a series of Leading Together employee conferences to accelerate diversity and inclusion and help us reach our ambition to be a gender-balanced company by 2018. Announced our new 2020 commitments and long-term ambitions, in support of the 2030 United Nations Sustainable May Development Goals (SDGs). Joined 37 companies at the Second Pacific Alliance Youth Summit in Santiago, Chile to launch the Alliance for YOUth in Latin America. Maggi announced a renewal of its global product portfolio with simple, recognisable ingredients, as part of its Simply Good initiative to inspire and offer tastier, healthier choices. July Hosted the Planting the Seeds for the Future of Food conference in Vevey, Switzerland, to explore issues around agriculture, sustainability and nutrition. September Nestlé Chairman Paul Bulcke was given the Concordia Leadership Award for 2017, for leading the company’s ongoing commitment to Creating Shared Value and supporting the UN’s SDGs. Launched our global youth initiative, Nestlé needs YOUth, at the October Private Sector Forum of the United Nations General Assembly in New York. Published Tackling Child Labour, our first report on child labour in the cocoa supply chain. It details our approach to this complex challenge and our work with partners on the ground to identify its causes and take remedial action. November Nestlé Pakistan, in collaboration with Lahore University of Nestlé pledged to source only cage-free eggs by 2025. Management Sciences and WWF, launched a local Water Plan to promote sustainable agricultural techniques, and improve access Nespresso invested in post-conflict Colombian coffee. to safe water and sanitation. Nestlé Waters announced its enhanced collaboration with the Alliance for Water Stewardship, which will certify 20 factories to its global water stewardship standard by 2020. Nestlé in society Creating Shared Value 2017 3 Contents Welcome to this 2017 Nestlé in society: Creating Shared Value report. Aimed at shareholders, stakeholders and other interested parties, this report shares detailed information about our issues, impacts and performance during 2017. Nestlé in society Reporting and governance 2 A year of positive impact 100 Business ethics and transparency 4 A message from our Chairman 101 Taxation and CEO 102 Accountable and inclusive 5 Creating Shared Value governance 6 Framing our CSV approach 103 Product safety and quality 7 Brands with purpose 104 The materiality process 8 Global opportunities and challenges 105 Materiality and the Sustainable Development Goals 10 Contributing to the global agenda 106 Responding to stakeholders 11 Collaborating for a positive impact 108 Our key performance indicators 12 Our commitments and progress 111 External recognition 112 About this report 113 Independent assurance statement For individuals and families For our communities For the planet 15 2017 highlights 45 2017 highlights 74 2017 highlights 16 Nestlé for Healthier Kids 46 Global youth initiative: 75 Improving our environmental Nestlé needs YOUth performance: our focus on water 17 Food for life 47 Empowering the next generation 76 Engaging on food loss and waste 18 Applying science for better health of farmers 77 Towards 100% renewable electricity 20 Offering tastier and healthier choices 48 Understanding our human 78 Moving forward in our 29 Inspiring people to lead rights impacts own operations healthier lives 49 Supporting collective action 79 Caring for water 40 Building, sharing and applying in our Thai seafood supply chain nutrition knowledge 87 Acting on climate change 50 Rural development and enhancing livelihoods 91 Safeguarding the environment 59 Respecting and promoting human rights in our business activities 63 Promoting decent employment and diversity Where to find more information Our reports are made available online at Our Corporate Business Principles are the basis of www.nestle.com/CSV, where you can also find: our company’s culture and are available as a This document forms an integral part of Nestlé’s UN PDF download. Global Compact (UNGC) Communication on • More detailed information on our management Progress, together with: approach and governance structure; Front cover: Our Nestlé Cocoa Plan in action • Additional information on human rights Nestlé – Annual Review 2017 due diligence; Good Food, Good Life Annual Review 2017 • Our performance data; • Case studies; and • Additional audio and video content. Nestlé. Enhancing quality of life and contributing to a healthier future. Our Human Rights Reporting Framework and GRI Content Index are available as separate Our Annual Review The Nestlé in society PDF downloads. section of our corporate website Nestlé in society Creating Shared Value 2017 4 A message from our Chairman and CEO We are pleased to share with you our 2017 Nestlé in society: Creating Shared Value full online report. This year, we further integrated our public reporting on In recognition of our work in contributing to the UN our financial and non-financial performance by including Sustainable Development Goals (SDGs) through our the highlights from our Nestlé in society report in our Creating Shared Value approach, Nestlé received the Annual Review, which is issued to our shareholders. We Concordia Leadership Award. We have also renewed our recognise that for our company to be successful over time commitment to the United Nations Global Compact. It and create sustainable value for shareholders we must promotes the principle of public–private collaborations in also create value for society. This longer report provides support of the SDGs. These efforts, among others, show greater detail on how we go about this, including our that business has a vital role to play in building a better, progress in meeting our 2020 public commitments and more sustainable world for everyone. 2030 ambitions. We look forward to your feedback on this report and on The world is changing fast, with consumer expectations, our progress towards meeting our 2020 commitments. competition and society evolving at an unprecedented pace. While our company is anticipating and adapting to these changes, two important dimensions do not change – our purpose and our values. Our purpose is to enhance quality of life and contribute to a healthier future. Our values, rooted in respect, guide our decisions and actions. This is deeply anchored in Nestlé’s culture and reflected Paul Bulcke in our Corporate Business Principles and our Code of Chairman Business Conduct. We want to help shape a better, healthier future. This starts with supporting young people. In 2017, we regrouped and aligned our healthy kids initiatives to better support parents and caregivers on their journey to raise healthier children. We also extended our Nestlé needs YOUth initiative globally to encompass our entire value Mark Schneider chain and set out an ambition to help 10 million young Chief Executive Officer people have access to economic opportunities by 2030. Nestlé in society Creating Shared Value 2017 5 Creating Shared Value We believe that our company will be successful in the long term by creating value for both our shareholders and for society as a whole. This approach, called Creating Shared Value (CSV), remains the fundamental guiding principle for how we do business. It enables us to bring our purpose to life: enhancing quality of life and contributing to a healthier future. Maximising value creation Underpinning all our efforts are our values, which are rooted in respect: respect for ourselves, respect for others, Through our CSV approach we aim to create value not respect for diversity and respect for the future. Guided by only for shareholders but also for society. Our CSV impact these values, we work alongside our partners and areas are those areas where our business intersects most stakeholders to ensure that our approach to CSV continues closely with society, and where we can create the most to inform all our behaviours, policies and actions. value and make the most difference. These include: • Nutrition, to enable healthier and happier lives for The business case for CSV individuals and families, with a strong focus on infants A long-term approach to business has always been part of and children; Nestlé’s DNA. Through CSV, we integrate sustainable • Rural development, to help develop thriving and development into business activities. This is increasingly resilient communities, and support better livelihoods important to long-term investors. CSV brings business for those we live and work with; and and society together by generating economic value in a way that also produces value for society. Foods and • Water, to address an issue of critical concern for the beverages with a nutrition, health and wellness dimension planet and a lynchpin of food security. perform better. Rural development programmes for Our aim is to have a positive impact on society while we farmers offer commercial differentiation to consumers, grow our business. We enable healthier and happier lives while responsible stewardship of water reduces costs and for individuals and families, we help develop thriving and secures supplies for our businesses. resilient communities, and finally, we steward the planet’s Nestlé is one of a small number of corporations involved in natural resources for future generations.
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