Nestlé Creating Shared Value Update 2010
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Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development Nestlé Creating Shared Value Update 2010 Visit the Creating Shared Value site at www.nestle.com/CSV Nestlé Creating Shared Value Update 2010 Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development Contents Nestlé Creating Shared Value Update 2010 Creating Shared Value at Nestlé 2 A message from our Chairman and CEO 4 2010 overview 5 Material issues 8 Challenges 11 Governance 15 Creating Shared Value Advisory Board 16 Nestlé Prize in Creating Shared Value 19 Prize winner 2010 20 Healthy Kids Programme 21 Stakeholder engagement 22 Support for global principles and goals 26 About our reporting 32 Assurance statement 34 Reporting performance 38 2010 Rural Development highlights 39 Key Performance Indicators 40 External assessments 43 Nutrition 45 Overview 45 2010 update 46 Case study 55 Water and environmental sustainability 56 Overview 56 2010 update 58 Case studies 86 Rural development 90 Our people 91 Overview 91 2010 update 93 Case studies 107 Global Reporting Initiative Index 109 www.nestle.com/CSV 1 Nestlé Creating Shared Value Update 2010 Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development Creating Shared Value at Nestlé What is Creating Shared Value? Creating Shared Value is the basic way we do business, which states that in order to create long-term value for shareholders, we have to create value for society. But we cannot be either environmentally sustainable or create shared value for shareholders and society if we fail to comply with our Business Principles. This involves compliance with national laws and relevant conventions, as well as our own regulations, which often go beyond our legal obligations. For example, we support the Universal Declaration of Human Rights (UDHR), which stands at the basis of the UN Global Compact’s Human Rights Principles, and our CEO Paul Bulcke signed the UN Global Compact CEO Statement for the 60th anniversary of the UDHR. Our strong support for the UN Global Compact, and our detailed commitments to the Fundamental Conventions of the International Labour Organization (ILO) or other relevant instruments, are laid out in our Nestlé Corporate Business Principles and related policy documents, and their application is verified through our CARE programme and our internal Corporate Group Auditors. Beyond that, how we do business is based on sustainability – ensuring that our activities preserve the environment for future generations. In line with the Brundtland Commission’s definition, sustainable development to Nestlé means “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. www.nestle.com/CSV 2 Nestlé Creating Shared Value Update 2010 Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development At the same time, Creating Shared Value goes beyond compliance and sustainability. Any business that thinks long term and follows sound business principles creates value for shareholders and for society through its activities eg. in terms of jobs for workers, taxes to support public services and economic activity in general. But Creating Shared Value goes one step further. A company consciously identifies areas of focus, where: a) shareholders’ and society’s interests strongly intersect, and b) where value creation can be optimised for both. As a result, the company invests resources, both in terms of talent and capital, in those areas where the potential for joint value creation is the greatest, and seeks collaborative action with relevant stakeholders in society. At Nestlé, we have analysed our value chain and determined that the areas of greatest potential for joint value optimisation with society are Nutrition, Water and Rural Development. These activities are core to our business strategy and vital to the welfare of the people in the countries where we operate. www.nestle.com/CSV 3 Nestlé Creating Shared Value Update 2010 Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development A message from our Chairman and CEO It is our firm belief that, for a company to be successful over time and create value for its shareholders, it must also create value for society. We call this “Creating Shared Value”. Based on strong foundations of compliance and sustainable business practices, this is our basic way of doing business. Given the nature of our activities and our ambition to be the world’s leading Nutrition, Health and Wellness Company, we have identified three areas where Nestlé can, in particular, optimise the creation of shared value: nutrition, water and rural development... Read the full message from our Chairman and CEO > www.nestle.com/CSV 4 Nestlé Creating Shared Value Update 2010 Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development 2010 overview Compliance with applicable laws and international conventions such as the Universal Declaration of Human Rights (see next page) and strong support for the UN Global Compact, as well as our internal standards and regulations, is the foundation of our business. Beyond compliance, our business is based on sustainability, ensuring our activities protect the environment for future generations. Yet we believe we need to go further, creating shared value for both the Company and society in areas where shareholders’ and society’s interests intersect. Three such areas – nutrition, water and rural development – are the focus for this strategy. Read the full CSV Rural Development report. 2010 highlights • The launch of the Nescafé Plan to consolidate our sustainable coffee programmes; • Our partnership with The Forest Trust to ensure our products do not have a deforestation footprint; • The award of the inaugural Nestlé CSV Prize to IDE Cambodia; • The continued roll-out of our “Healthy Kids” Global Programme; • The distribution of our revised Nestlé Corporate Business Principles and the launch of our new Employee Relations Policy. Overall goals Rural development: We contribute to what we believe are the five ways to increase farmer income: increasing productivity, growing higher-value crops, using land more efficiently, gaining additional non-farm income and employment beyond farming. Our approaches involve supporting farmers through technical and financial assistance, access to markets, and investing in new factories in rural areas that create infrastructure and employment. Water and environmental sustainability: In our operations, we strive to continuously improve our operational efficiency and environmental performance, and apply a life cycle approach to assess our own operations and those associated with the wider value chain, to produce tasty, nutritious food and beverages with the lightest environmental footprint. We aim to provide all Nestlé employees with a professional, healthy and inspiring working environment that fosters personal accomplishment and team development, and that respects diversity and equality. Nutrition: Using science-based solutions, we seek to improve quality of life through food and diet, contributing to the health and wellbeing of consumers, including those with specific nutritional needs and those at the base of the income pyramid through products with higher nutritional value at affordable prices. We also aim to generate greater awareness, knowledge and understanding among consumers through clear, responsible communication. www.nestle.com/CSV 5 Nestlé Creating Shared Value Update 2010 Creating Shared About our Reporting Nutrition Water and environmental Rural Our people Value at Nestlé reporting performance sustainability development Nestlé Prize in Creating Shared Value: IDE Cambodia In May 2010, the first Nestlé Prize in Creating Shared Value was presented to International Development Enterprises (IDE) Cambodia. Since 2005, IDE Cambodia has employed franchised Farm Business Advisors to assist farmers in intensifying or expanding their production of vegetables. To date, IDE has increased the productivity among 4500 smallholder farmers in rural Cambodia, boosting their income and increasing their standard of living. The CHF 500 000 prize will help IDE to extend its reach to an additional 20 000 farmers. Performance The launch of the Nescafé Plan in 2010 will bring a CHF 500 million investment over the next decade to the coffee sector, with a focus on improving yields and smallholder farm income. We will also continue to provide support and training on farming practices to 144 926 farmers [KPI] through capacity-building programmes and access to financial assistance. Through an ongoing commitment to operational environmental efficiency measures and a move towards renewable energy, we have reduced our direct GHG emissions by 15% to 4.0 million tonnes CO2eq [KPI] and reduced energy consumption by almost 3% since 2000 to 88.6 PJ [KPI]. In the same period we reduced our total water withdrawal by 32% to 144 million m3 [KPI] while increasing our production volume by 73%. We continue to focus on packaging optimisation, are producing less