M-GHG-Emissions-Report.Pdf

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PH PH PH PH Principles in Action Summary 2012 | Contents

Mars Contents

Mars in a Moment...... 1 Data Restatements A Letter from Mars President, Paul S. Michaels...... 2-3 We have restated our 2007 baseline and each subsequent year of Our Approach to Business ...... 4-8 environmental data (where applicable) for our operations, to reflect changes in our business and improvements to our data collection Our Stakeholders’ Views ...... 9 systems. These changes are not material to our overall performance. The most significant adjustments are as follows: Health and Nutrition...... 10-11 We have included greenhouse gas emissions from our global auto fleet as Scope 1 rather than Scope 3 emissions as in previous years. Our Supply Chain...... 12-13 These emissions do not count toward our Sustainable in a Generation goals, which are for our factories and offices only.

Our Operations...... 14-18 We have restated the percentage of black tea purchased from certified sources in 2011 to 32 percent from 18 percent. The new Our Brands...... 19-20 figure represents certified tea as a percentage of black tea only, in line with our target, whereas the previous figure showed certified Working at Mars...... 21-23 tea as a percentage of all leaf tea purchased. Assurance...... 24 The percentage of new Associates receiving Essence of Mars training within their first 12 months has been restated for 2011 due to a calculation error.

Reader’s Guide Welcome. This 2012 Principles in Action Summary provides an overview of our business and a review of 2012 progress toward our objective of creating mutual benefits for all our stakeholders through our operations.

This Summary describes the highlights and challenges faced in addressing our material issues in 2012. There is more information about our wider efforts in the fields of health and nutrition, sustainability and being a great place to work at www.mars.com/global/about-mars/people-planet- performance.aspx.

Reporting Scope and Data Our Principles in Action Summary covers the global activities of Mars, Incorporated and its business segments: Mars Petcare, Mars Chocolate, Wrigley, Mars Food, Mars Drinks and Mars Symbioscience. It describes our performance in the 2012 calendar year. Where appropriate, we mention or provide links to activities and case studies from other years to give a more complete picture of our work.

All environmental data for our factories are based on actual 2012 figures, though data for most offices are still estimated. Estimates comprise approximately five percent of data relating to raw materials and packaging materials. We measure all volumes in metric tonnes (1,000kg), which we refer to simply as tonnes throughout. Financial values are United States dollars (US$) unless otherwise stated.

“The company’s objective is the manufacture and distribution of food Mars products in such manner as to promote a mutuality of services and Mars in a benefits among all stakeholders” Moment – Forrest E. Mars, Sr. 1947 . We strive to do this by putting our Five Principles into action every day to make a difference to people and the planet through our performance.

incorporated

PH Petcare Chocolate

394 Operations in Sites 74 Global HQ Countries in McLean, Virginia, USA 1911 Frank C. Mars made 11 the first Mars candies Food in his Tacoma, $ BILLION Washington kitchen BRANDS

More than 100,000+ $33bn SUPPLIERS net sales Private family-owned company

Symbioscience Drinks

PLANTS SIMPLY LOVE IT !

Total Sales

More than 90% of sales come from Petcare, Chocolate and Wrigley

Mars Letter from Paul S. Michaels President Mars, Incorporated

The challenges our business shares with society require long-term efforts to deliver change on a large scale.

In last year’s Principles in Action Summary, I described how daunting millions of people in Africa in the future. challenges are shaping our approach to business and our thinking about the kind of business we want to be. These challenges – preserving the Creating Shared Prosperity in our Supply Chain environment for future generations; spreading prosperity and economic Our business cannot endure unless the farmers that supply our agricultural growth; feeding a burgeoning global population while addressing obesity – ingredients can make a decent living from raising their crops sustainably. remain as pressing as ever. Our Vision for Change program for cocoa farmers in Côte d’Ivoire made As a private, family-owned company, we have the benefit of being able to considerable progress last year, opening eight more Cocoa Development take a generational view – committing to the long term and making choices Centers (CDCs) to provide the tools, techniques and training to cultivate today that will pay off down the road, rather than this quarter. But, even with high-quality yields that result in better incomes. Our challenge now is to scale this freedom, we know that we can’t tackle the challenges we share with up successful pilot projects to become standard practice. Mars is now the society alone, if we really want to make a difference and create the scale of world’s largest purchaser of cocoa from certified sources, and farmers need change necessary. We believe that collaborating with others is part of our our continued support to achieve certification if we are to meet our target of responsibility to society and to our stakeholders. And, we know it is the best sourcing 100% of cocoa from certified supplies by 2020. way to achieve our objective “to manufacture and distribute food products in To ensure success, we need to understand the long-term outcomes and a manner that creates a mutuality of benefits for all of our stakeholders.” It impacts of our interventions in the communities producing key ingredients will also make us a better, more efficient company that is still in business in such as cocoa, tea, coffee and rice. We have developed a methodology for another 100 years. monitoring CDC performance and are gathering baseline data. Working with Our determination to make a difference unites the Mars family, the Mars others, our aim is to set data-based, meaningful and ambitious targets for Leadership Team, and more than 72,000 Mars Associates around the improving livelihoods, safety and wellbeing throughout our value chain. world. Providing opportunities to make a difference makes the experience of working at Mars more than just a job – and in an extremely competitive Making a Difference for the Environment global marketplace this is a critical factor in attracting and retaining the highly We all rely on the planet’s resources – businesses, communities and talented people we need to be successful. individuals alike – so the case for environmental protection is indisputable. At Mars, we are reducing our environmental impacts through our Sustainable In our previous Principles in Action Summaries, we reported in detail on the in a Generation program, though we have made slower progress toward our depth of our commitment and the breadth of our activities. This year, our aim 2015 targets than we would like. Our energy use, greenhouse gas emissions is to be more focused on recent progress and challenges facing our business. and water consumption remained constant this year rather than declining. Addressing Hunger and Obesity through Health and We need to redouble our efforts and stay focused on our commitments. Nutrition If we employ all the energy efficiency, technology and renewable energy projects we have planned, our targets are still achievable. To make sure this Obesity and hunger are tremendous, complex challenges for the world – happens, this year we linked a percentage of the long-term incentive plan for impacted by everything from how we live, work and get around, to social, our top 100 executives to achieving our greenhouse gas emissions reduction economic and cultural factors, genetics and what we eat. target for our operations.

We offer a broad portfolio of products from rice and sauces to chocolate, We have also broadened our approach to take responsibility for the gum and confectionery. We are proud of these products and the pleasure environmental impacts caused by, and affecting, our agricultural supply they bring. They can be enjoyed as part of a healthy, balanced diet, and we chains. In this year’s Summary, we provide data on the water and land use are making this easier by reducing sodium and saturated fats. Of course, this impacts of sourcing our raw materials and packaging, in addition to the is just a small step that we can take on our own. To make a more substantive figures on greenhouse gas emissions reported in previous years. contribution, we are working with external partners like the Healthy Weight Commitment Foundation in the United States, to deepen understanding of the broader causes of poor nutrition and to promote healthier lifestyles. In another example, our expertise in plant science is helping to increase yields of “orphan” crops that, with enough investment, could provide good nutrition for

Looking to the Future The challenges our business shares with society require long-term efforts to deliver change on a large scale. While we wish we were moving faster in some areas, we are heading in the right direction and learning and improving as we go. By initiating conversations and collaborations that bring together different sets of expertise, we believe we can overcome the obstacles holding us back.

I hope you find our Summary helpful in understanding our objectives, and I thank you, in advance, for your feedback, partnership and help in driving continuous improvement in all that we do.

Our Five Principles guide our approach to business and unite our Associates across generations. Governance In 1947, Forrest E. Mars, Sr. documented his objective to build a business Mars is governed by a Board of Directors who are members of the Mars that manufactures and distributes food products in a manner that family, and who receive independent advice from four external Board creates a “mutuality of benefits” for all stakeholders. Still owned by the Advisors. Mars family, we remain committed to this objective at every level of the Our Board uses committees comprised of Board members and external company. We plan for the long term, and are making choices now that advisors to fulfill key aspects of its mandate, including Audit, Remuneration, will help us grow sustainably for generations to come. Technology and Benefits Funding and Investment Oversight. Our Five Principles of Quality, Responsibility, Efficiency, Mutuality and Freedom guide our approach to business and unite our Associates across generations. Day-to-day operations are led by the Mars Leadership Team including:

We embed these Principles in our approach to conducting business and, because we are a private, family-owned company, we have the freedom to Paul S. Michaels, President, Mars, Incorporated make long-term investments in tackling the challenges facing our business Aileen Richards Todd Lachman and planet, such as climate change and food security. This includes investing Executive Vice President, People and President, Petcare in research to enhance scientific knowledge, as well as practical research to Organization, Mars Global Services apply this knowledge in areas where our business has a direct stake. Reuben Gamoran Frank Mars We are also committed to working with others, including our customers, Vice President and Chief Financial President, Symbioscience suppliers, governments, nongovernmental organizations, industry, Officer academia and research centers, to help create a successful future for all our David Kamenetzky Martin Radvan stakeholders. Vice President, Corporate Affairs and President, Wrigley Strategic Initiatives Read more on Our Approach to Business at http://www.mars.com/global/ about-mars/mars-pia/our-approach-to-business.aspx. Alberto Mora Grant Reid Vice President, Secretary and General President, Chocolate Counsel (Retiring 2013)

Richard Ware Poul Weihrauch Vice President, Supply, Research & President, Food Sustainability at Mars Development and Procurement

We seek to create lasting mutual benefits for our business and all our stakeholders by amplifying our positive social impacts, minimizing our We also have a group, the Mars Global Advisors, that serves in an environmental footprint and helping to create economic prosperity. It is advisory-only capacity. This group of external experts engages the senior our obligation to help address the challenges we share with society, and management of Mars, Incorporated in strategic dialogues regarding major we recognize that our business cannot endure for future generations public policy, geopolitical, and macroeconomic issues and trends, and how without doing so. they affect business strategies and priorities. To lead by example, we aim to make a difference through our business performance. This begins with the impacts of our factories and offices (our “operations”), where we have direct control. Beyond the factory gates, we are working to create sustainable prosperity in the communities where we source our ingredients and, through our brands, to champion good causes and promote products that are better for people and planet.

Governance

FIVE PRINCIPLES

Board of Directors

Global Mars Leadership Team

Mars Associates

QUALITY RESPONSIBILITY MUTUALITY EFFICIENCY FREEDOM

Our objective as a company is to create a mutuality of benefits for all of our stakeholders through our operations

Business Integrity and Compliance Global Food Policy Group: ensures globally consistent positions, policies and standards across all aspects of food policy; led by the Global Head of Public Our Five Principles foster a culture of ethics and integrity that makes us proud Affairs with members representing all major functions and business to be Mars Associates. With a business that continues to grow globally, often segments. in places where cultural norms may differ and regulations may be unlike Mars’ standards, it is our Five Principles that serve as our guide. By equipping Associates with the training and tools to maintain the high ethical standards we expect, we nourish a culture that holds ethics and integrity at the core of our business in which we operate.

A key part of nurturing our ethical culture is ensuring that Associates all understand how to incorporate our Five Principles into decision making. This begins with “Essence of Mars” training for new Associates, and is woven into all Senior Leadership Programs.

Good intentions must also be supported by knowledge. Today’s business environment brings evolving and increasingly complex legal requirements in areas such as competition law and anti-corruption compliance. We ensure Associates and others involved in our business understand their legal and ethical responsibilities through policies, procedures and related training, such as our Improper Payments Policy, our Competition Law Compliance Program and our Supplier Code of Conduct. Our Five Principles have helped us Together, these efforts help us deliver on our commitment to doing good becomeOur Five Principlesa successful have global helped food us become business, wherever we do business. companya successful and global are essential food company for building and a sustainableare essential business for building that a willsustainable endure for Policy Development generations.business that will endure for generations. Our business segments each put strategies and resources in place to manage their specific impacts on people and the planet and contribute to areas such as health and wellbeing. They are guided by the following bodies: Long-term Incentives Sustainability Leadership Team (SLT): agrees company wide sustainability We have two different long-term incentives plans for eligible executives. The strategy and policies; members include the Chief Sustainability Officer, first is a three-year plan driven by traditional financial metrics that rewards senior functional heads and a senior representative of each business consistent year-on-year delivery of business performance targets. In 2012, we segment. revised our second long-term incentive plan to incorporate the achievement of strategic objectives including Associate engagement and the reduction of Sustainability Working Group: develops policies and practices for approval greenhouse gas emissions. by the SLT; comprised of corporate sustainability directors plus representatives from each segment.

Defining our Approach Impacts of Water Use With external partners, we are working to define and standardize water We use accepted scientific data to understand and quantify our impacts, and impact metrics so we can fully understand how our activities affect water to develop science-based strategies in response. Our targets are based on the quality and availability, and develop effective strategies and long-term goals changes we need to make to help solve the overarching problem, rather than for reducing our total water use impact. In the short term, we are working to what we can achieve in the short term. measure and reduce water use throughout our value chain: One of the key scientific inputs we use is the concept of Planetary Boundaries, Factories (0.8% of water use in our value chain) – this is tracked from a highly-respected analysis based on a review of existing research which municipal sources, ground water, surface water (for cooling only) and identifies 9 environmental impacts and the point at which each one will cause captured rainwater, though we only consider the first two sources to have catastrophic harm to human wellbeing. We have combined this data with an impact on availability. See page 15 for more on our activities to reduce information about our value chain to identify three broad areas of impact water use. most relevant to our business, which encompass the majority of impacts in the Planetary Boundaries model (see diagram). They are: greenhouse gas Raw materials (96.6% of water use in our value chain) – we estimate emissions, impacts of water use, and impacts of land use. the fresh water from rivers, lakes and aquifers used to grow the raw materials we source based on data from the Water Footprint Network Impacts of Land Use (WFN). Our work to quantify our land use impacts is at an earlier stage than our Packaging (2.6% of water use in our value chain) – the water consumed in thinking on greenhouse gases and water impacts. Quantifying the land used the production of our packaging was calculated using values from PIQET. in different elements of our value chain is a first step toward our ultimate aim of measuring and reducing our overall land use impacts: Factories – factory land use accounts for around 0.05% of total land use in our value chain, calculated by aggregating property areas.

Raw materials – land used to grow our raw materials accounts for

an estimated 97.8% of land used in our value chain, based on our actual

material usage and global average yields from the Statistics Division of

the Food and Agriculture Organization of the United Nations (FAOSTAT).

Packaging – the land use involved in producing our packaging accounts for 2.2% of land use in our value chain, based on data from the Packaging Impact Quick Evaluation Tool (PIQET) developed in partnership with the Sustainable Packaging Alliance (SPA).

Planetary Boundaries Model GR One of the key scientific inputs we use EE NH is the concept of Planetary Boundaries, OU a highly-respected analysis based on a Chemical pollution S review of existing research which identifies Not yet specified E G 9 environmental impacts and the point at A which each one will cause catastrophic Climate change S harm to human wellbeing. E Ocean M acidification I S S I O

N Atmospheric aerosol loading Stratospheric S Not yet specified ozone depletion

Nitrogen cycle (biogeochemical flow boundary)

Phosphorus cycle loss (biogeochemical Biodiversity flow boundary) L Global A freshwater use T N C D A U change P S M E Land system I IM SE P U AC ER T WAT

Current operating levels Proposed safe operation levels Safe Unsafe

Scope 3 Emissions

SCOPE On-site emissions SCOPE Value chain 1 3

SCOPE Purchased electricity 2 and steam

6% 8% 86%

Purchased Downstream Upstream Use of sold End-of-life Associate Capital Business goods and transportation transportation products treatment of commuting goods travel services and distribution and distribution sold products 56% 19% 6% 2% 2% 1% 0.4% 0.4%

To find lasting and scalable ways to reduce emissions, we are working with partners, universities and the scientific community.

*Diagram adapted from Rockström, J. et al. 2009. Planetary Boundaries: Exploring the Safe Operating Space for Humanity. Ecology and Society 14(2): 32-64

Greenhouse Gas Emissions Mars and Society Reducing our total greenhouse gas (GHG) emissions is important because We recognize that our actions can make a real and lasting difference to the of the consequences of climate change. Particular effects - changing lives of millions of people and their pets. Mars has a number of programs temperatures and rainfall patterns, floods, droughts, the spread of pests and that help improve lives and livelihoods for the people in our value chain. These diseases – have implications both for supplies of our agricultural ingredients include our work with cocoa farmers, our support for the African Orphan and for the farmers who produce them. Achieving this will require changes Crops Consortium and our commitment to purchase 100 percent of cocoa, to the way we source raw materials and manufacture and distribute our coffee, tea, palm oil and fish from certified or sustainable sources. products. We are now seeking to define how we can create mutual benefits in our Using the Greenhouse Gas Protocol and other relevant data sources, we wider value chain by applying the same scientific rigor we have to our calculated our GHG emissions in 2012 as follows: environmental impacts. Several external tools and data sources are informing this process, including: 0.8 million tonnes: scope 1 emissions from direct energy and fuel Oxfam’s model of the planetary and social boundaries needed to consumption in our factories, offices and vehicles. create a safe and just space for humanity. 1.1 million tonnes: scope 2 emissions from purchased electricity used The Agricultural Sustainability Institute at University of California in our factories and offices. Davis, California 12.2 million tonnes: scope 3 emissions from purchased raw materials, Big Society Capital’s outcome matrix packaging and other goods and services; plus the transportation of Gallup’s five essential elements of wellbeing raw materials and products, business travel, our products in use and waste generated in our operations. Qualitative feedback from workshops and conversations with internal and external stakeholders. See pages 14 –18 for more information about our targets and performance in Alongside this work, we remain committed to partnering with our reducing scope 1 and 2 emissions, and pages 12-13 for more on our strategies stakeholders and harnessing our collective skills to continue improving our to reduce the impacts of the raw materials we source. products and the way we do business. We respect human rights throughout our value chain and recognize the principles of the United Nations Declaration of Human Rights and the International Labour Organization’s Declaration on

Fundamental Principles and Rights at Work. in the areas of food, agriculture and health, and MARI’s operational philosophy In particular, child labor and trafficking are serious challenges facing many aims to drive this type of collaboration. MARI will be led by the Chief Science supply chains that originate in developing countries, particularly in the cocoa Officer and staffed by Mars scientists including the Chief Agricultural Officer, industry. Mars has worked for years to address these challenges, both on its as well as world-class external collaborators. own, and through cooperative efforts with governments, nongovernmental As just one recent example of our scientific work, our research into rice organizations and industry. Our policy on child labor in the cocoa supply chain varieties and growing techniques has the potential to deliver a “quadruple is available from the Press Center on mars.com. win” in the fields of rice sustainability and nutrition. Discoveries to date include:

Alternating between wetting and drying rice systems during growing seasons saves water without decreasing yields.

Carefully selecting rice varieties and using less water and less nitrogen fertilizer reduces greenhouse gas emissions.

Saving money by reducing water and fertilizer use can boost farmers’ incomes by a greater amount than increasing overall yields. Much of this agronomic work has been led by Mars Associates David Mackill and Walter De Man.

Increasing the resistant starch in rice improves its nutritional quality. Mars built on this research to improve the fiber content of its brown Mars has a number of programs that help rice, and UNCLE BEN’S® Ready Rice® Whole Grain Brown became the first improve social and economic outcomes whole grain brown rice to officially claim that it is a “Good Source for people in our value chain, including our of Fiber”. work to boost yields and incomes for cocoa farmers.

Quality and Food Safety Quality is one of our Five Principles and is the basis of the brand loyalty and consumer trust that has made Mars the company it is today. We pride ourselves on delivering quality products and we make the vast majority of these ourselves, rather than getting other companies to manufacture them for us.

Our Quality Management Process (QMP) framework is our comprehensive program to ensure we consistently deliver high-quality and safe products. It focuses on preventing issues by applying robust standards that prescribe how we make safe, high-quality food. We verify the efficacy of the QMP through a rigorous and integrated set of audits and through structured performance analysis at every level of the business.

We specify and purchase high-quality ingredients and packaging and manage this by building long-lasting, collaborative relationships with a small number of Science is the key to tackling a wide trusted suppliers. We strive to continually improve our approach. Our Material range of societal challenges, from Quality Management Standard guides us to ensure integrity throughout climate change to food security. the whole supply chain, including through audits of second- and third-tier suppliers (the companies supplying our suppliers). This can mean that Mars is actively involved in supplier quality assurance at the origin of many key agricultural ingredients, such as cocoa, rice and tomatoes. Working with Others Mars and Science Open dialogue and strategic partnerships have helped us establish effective business strategies, and we often share what we learn for the benefit Several interrelated challenges – from climate change to food security – face of society. For example, by the end of 2012 we had opened 17 Cocoa global society, and the food industry must play a key role in helping to address Development Centers (CDCs) to provide educational information and planting these. Mars believes that investment in scientific research and cross-sector materials to cocoa farmers in Côte d’Ivoire that will help them increase their collaborations is necessary to discover and apply new knowledge capable of crop yields. This includes four franchise CDCs built by our collaborators, ECOM addressing these societal challenges. and Barry-Callebaut, based on the model we developed and shared with them. We are combining our in-house scientific capability with that of external collaborators to boost supplies of sustainable raw materials, make our The groups we work with range from suppliers and retail customers to operations more sustainable, improve the nutritional profile of our products, governments, academic institutions, nongovernmental organizations (NGOs) and explore the health benefits of activities as varied as chewing sugar-free and the scientific community. We engage with these groups at a corporate, gum, keeping pets and consuming natural food compounds, such as cocoa business segment and country level. Their input has helped inform the flavanols. material issues our business will address as priorities.

Our scientific work is overseen by the Mars Science Leadership Team (MSLT) For example, in April 2012 we invited eight stakeholders for a roundtable with independent advice from the external scientists on the Mars Science discussion on our work to develop a vision for making a positive difference Advisory Council (MSAC). Both groups are led by the Chief Science Officer. for people and the planet through business performance. The next page provides a summary of their feedback. In 2013, we are establishing the Mars Advanced Research Institute (MARI), a networked research institute that drives fundamental research to address There are further examples of our work with others and the outcomes we critical challenges related to food, agriculture and health. It will help us achieve as a result throughout this Summary and on our website. discover new scientifically-driven technologies that will in turn improve the sustainability performance of Mars. We believe cross-sector collaboration among industry, government, academia and NGOs is needed to promote an evidence-based, coordinated and mutual approach to sustainable innovation

Areas to Focus On Mars The stakeholders encouraged us to focus on making a substantive positive Our change in a small number of areas where we can make a real difference, even though there will be impacts our approach does not cover. We Stakeholders’ discussed whether we should limit our focus areas to those relating directly to our business, but the group encouraged us to also help in tackling Views underlying socioeconomic problems that indirectly affect our business.

Whichever impacts we choose to focus on, the stakeholders emphasized that our efforts should go beyond the normal expectations of business. We Stakeholder input plays an important role in the development of our should aim to change the status quo, which could potentially mean changes strategies. It is particularly vital in complex areas such as defining ways to to our business model and product portfolio. create a mutuality of benefits for all stakeholders.

As one example, in April 2013 we invited experts from leading companies, certification organizations, nongovernmental organizations (NGOs) and social Stakeholders Attending Our investment firms to a roundtable discussion to give us their perspectives on Roundtable Discussion how our business can have a greater positive socioeconomic impact. Caroline Mason – Chief Operating Officer, Big Society Capital We convened this forum Clara Barby – Head of the IMPACT strategy, Bridges Ventures as part of our work to develop a broad vision Dax Lovegrove – Head of Business and Industry, WWF for making a positive Organizations like Mars can Erinch Sahan – Policy Adviser, Private Sector Advocacy Team, difference for people and change the rules of the game Oxfam and this will help create the the planet through business business case. performance. During the Francesca Boldrini – Head of Global Health and Advocacy, session, we asked these Gates Foundation Kavita Prakash-Mani, stakeholders for feedback Kavita Prakash-Mani – Head of Food Security, Syngenta Syngenta on the general approach we are taking and the impact Samantha Dormer – Head of Product Strategy, Fairtrade areas on which to focus. Foundation Their input will help us create mutual benefits for Sarah Roberts – Executive Director, Ethical Tea Partnership stakeholders by informing Chloe Meacher – Climate Change Manager, Tesco (by the development of our vision. We look forward to continuing to work with telephone) them to define our approach in more detail. We will of course share our vision as it evolves. George Gordon – Head of Social Policy, Tesco (by telephone) Our Approach to Socioeconomic Impacts The response from the group was positive and productive, with stakeholders generally favorable toward the approach Mars is taking in this area.

Stakeholders urged us to be very clear about what we aim to achieve in the long term and to use Understanding and straightforward, engaging measuring the business and consistent language to drivers that can impact communicate our vision, social change is critical. It our chosen focus areas will be at least, if not more and what we intend to important, to keep track of achieve in each one. They these. encouraged us to link our work in this area to our Erinch Sahan, objective to create mutual Oxfam benefits. Stakeholders also cautioned that, once our socioeconomic impact areas are well defined, our strategies should not seek to tackle them in isolation from our environmental impacts. They stressed the need to make a clear link between the two and we will consider this as our strategies in each impact area continue to develop.

The group welcomed our commitment to science and agreed on the importance of clearly defined metrics that measure the impact we are having as well as the value created for Mars. Effective measurement will ensure our vision becomes embedded in our day-to-day activities. However, stakeholders cautioned us to not let our desire for scientific rigor prevent us from acting quickly when opportunities arise, or good practices emerge.

Mars Health and Nutrition

We strive to make products that not only taste great, but which people feel confident about eating and feeding to Almost 70 percent of Mars their families. Food products already meet regional targets levels for sodium. Over the last Saturated fat is a health People’s health and wellbeing are impacted by everything from how we five years, Mars Food has issue that needs addressing live, how we work, social and economic factors, urban design, culture, partnered with government by consumers and food genetics and how we eat. A controlled calorie intake is one contributor to initiatives and participated in manufacturers alike. In order maintaining a healthy weight and lifestyle. voluntary commitments and to reduce total intakes across we continue our efforts to the population to below 10% We are proud of all the products we produce, from snacks and chewing of total energy intake, the gum to family meals and pet food. We strive to make products that not only ensure our entire portfolio meets regional targets. formulation of all sources of taste great, but which people feel confident about eating and feeding to their saturated fat – even popular families and pets. By helping people and their pets lead healthier lives, we are Nutrition & Science treats – needs to be tackled. contributing to their wellbeing and the success of our business. Read more on By investing in scientific Any initiative to reduce the Health and Nutrition at http://www.mars.com/global/about-mars/mars-pia/ research and development amount of saturated fat in the health-and-nutrition.aspx we are driving innovation UK diet is a step in the right Our Approach and discovery in nutrition, direction. for both people and pets. Our health and nutrition approach is based on helping people make the right Partnering with leading Professor Judy Buttriss, choices, improving the nutritional value of our products, conducting scientific scientific institutions, we Director General of the British research into nutrition, and working in partnership with others to promote are researching the health Nutrition Foundation active, healthy lifestyles. benefits of cocoa flavanols Helping People Choose and the oral health benefits of chewing sugar-free gum. We help people make informed choices for themselves, their families and Mars Associates are undertaking research to strengthen the nutritional their pets by providing clear and meaningful information about the ingredients content of products in emerging markets, and helping farmers to grow crops we use. All our retail products bear ingredient statements so consumers that are healthier, more productive and nutritious. know what is in them. In addition, we use Guideline Daily Amount (GDA) labeling to prominently display nutritional information on the front and back of our The WALTHAM® Centre for Pet Nutrition in the UK has been conducting packaging, and we are proud to be the first company to commit to using GDA scientific research which benefits pet health for almost 50 years. It remains labeling on confectionery products worldwide. GDAs are a guide to how many a leading authority in pet nutrition and wellbeing to support development of calories and key nutrients are present in a portion of a food or drink, and what Mars Petcare brands. percentage of a person’s daily dietary needs that amount represents. We include further nutritional information about our products and offer accessible information, advice and interactive tools for learning about and The Oral Care Benefits of Sugar-Free Gum embracing healthy lifestyles on www.marshealthyliving.com. Our regional Chewing sugar-free gum for 20 minutes after meals and snacks websites also help make our healthy living messages more meaningful to has been proven to help protect your teeth. local audiences and provide information to help people choose what to feed These benefits are widely accepted and endorsed by dental their pets. professionals and included in the health policies of several national Improving Our Products governments. To help tackle rising levels of obesity, heart disease and diabetes, we are using The FDI World Dental Federation and more than 25 national various strategies to continuously improve our products. These include using dental associations recognize the scientific evidence. less of ingredients such as saturated fats and sodium, and eliminating others, The European Commission has approved oral health claims for such as trans-fats, altogether. Between 2002 and 2010, we reformulated sugar-free chewing gum, one of the few food categories to gain all Mars Chocolate products globally to remove all trans-fats except a small such recognition. amount that occurs naturally or is made during processing.

Developing Partnerships

We promote health and wellbeing through local, regional and global partnerships, recognizing the many elements that contribute to wellbeing, including diet, nutrition, exercise, and personal and public health. For example, we are a founding member of The Healthy Weight Commitment Foundation in the United States. This initiative is dedicated to helping reduce obesity, especially in children. In 2012, member companies collectively achieved the pledge to reduce annual calories consumed in the United States from 2008 levels by one trillion.

In Europe, Wrigley is a founding partner of the Platform for Better Oral Health. This joint initiative between academics, chief dental officers, public health associations and industry is seeking a common European approach for better Health & Nutrition Targets prevention, education and access to oral care. In 2012, the Platform organized the first European Oral Health Summit at the European Parliament in Brussels and published the State of Oral Health in Europe report, which highlights the challenges of oral care and identifies opportunities for further action. Progress in 2012 We have made good progress in rolling out GDA labeling, with 90 percent of chocolate and confectionery and 70 percent of food products globally carrying these labels. However, we did miss our target to achieve 100 percent of chocolate and confectionery products by year-end 2012. As a result, we have shifted our target date to year-end 2013, and we now aim for more than 90% of our global food portfolio to carry these labels by year-end 2014.

At year-end 2012, almost 70 percent of our food portfolio globally met regional voluntary commitments for sodium levels, and this figure rises to 100 percent in Europe and North America. In the UK, Mars Food is proud to have achieved the Responsibility Deal 2012 salt targets set by the Department of Health. The overall amount of sodium present in our products has been reduced by 25 percent from a 2007 baseline, without compromising taste.

In 2012, we developed a scientifically-approved way of measuring cocoa flavanols, a nutrient found in cocoa-based products. Described by Nutritional Outlook as a “critical breakthrough,” this work received a “Best of 2012” award and will help provide consumers with more reliable product information. Like much of our cocoa research, the work has been made freely available for the benefit of everyone in the industry.

The WALTHAM® Centre published six research studies in academic journals in 2012. For example, the The Veterinary Journal published new research into the health risks of obesity in dogs. Other published studies included examining the effects of a high-fat diet in cats, the benefits of dog ownership during pregnancy and safe levels of vitamin A in puppy food.

Mars Drinks introduces new label design with better nutritional information

In September 2012, Mars Drinks UK launched “app style” labels on its KLIX® OUTLOOK vending machine range. The refreshed label design provides nutritional information on the front of the pack, where previously it was only available online or by request.

Future Plans Our business segments are reviewing the way they implement our approach to health and nutrition, and will report in more detail their progress and plans in our 2013 Principles in Action Summary.

Mars Our Supply Chain

Providing affordable and nutritious food for a growing global population agricultural supply chains, rather than simply what we believe is achievable in – while bringing prosperity to the farmers growing the ingredients – is the short term. one of the great challenges of our time. Society must find ways of Certification programs are not the solution to every social and environmental producing food more sustainably, so farmers can earn a living and future problem found in supply chains, but they strive to verify that raw materials generations are provided for. are sourced in a way that benefits producers, their communities, the environment and the industry. We work with certification organizations Our Approach to make farmer productivity and profit more central to their standards and processes, because we believe that good practices that increase the Our aim is to source more sustainably produced raw materials, boosting prosperity for farmers are at the heart of creating sustainable supplies for farmers’ incomes and creating mutual benefits for supplier communities. To our business. Partnering with these certification groups helps us reach a focus our efforts, we base our decisions on the best available scientific data, larger numbers of farmers than we can alone. collaborate with a variety of partners and work directly with suppliers to achieve lasting results. In addition to working toward certification, we also carry out scientific research and farmer training programs to help develop further solutions. Vision and ambition are important factors in driving change. Once we have Rabobank’s March 2013 report, Transforming the Food & Agri Supply Chain, defined our approach to sourcing an ingredient, we set a firm target to cites Mars’ decision to publish the cocoa genome sequence, and our broader purchase 100 percent of the material in this way. We have set targets to Sustainable Cocoa Initiative, as successful examples of close cooperation source 100 percent of several key raw materials using more sustainable between food companies and their upstream suppliers. approaches, most often through independent certification programs such as the Rainforest Alliance, UTZ Certified, Fairtrade International and the Read more about Our Supply Chain at http://www.mars.com/global/about- Roundtable on Sustainable Palm Oil (RSPO). These ambitious certification mars/mars-pia/our-supply-chain.aspx targets are based on what needs to be done to address the challenges facing Certification Targets 2015 TARGET 2020 TARGET 100% Black tea from certified sources 100% Cocoa from certified sources 10% (2011)

>20% (2012)

32% (2011) 33% (2012)

2015 TARGET 2013 TARGET 100% Palm Oil from certified sources 100% Coffee from certified sources

14.5% (2011)

20% (2011)

56% >50% (2012) (2012)

Our Supply Chain Targets Delivering 60 tonnes of fertilizer to help farmers boost their yield. Developing a methodology for monitoring CDC performance 100% Sustainable and gathering baseline data. This will enable us to measure the 100% of fish and seafood products effectiveness of our direct interventions. from sustainable sources by 2020 Sponsoring the World Cocoa Conference in November 2012. This — another industry first. global cocoa forum works to develop a sustainable cocoa value chain that delivers growth in emerging markets. PROGRESS: Our challenge in 2013 will be to scale up these pilots to achieve broader, • Continued to work towards using fish sustainable reach. from wild stocks that are not threatened, or are responsibly-farmed. Similar pilot programs are underway in coffee growing communities in Papua FISH New Guinea, Indonesia, Tanzania and Peru, in partnership with the Committee • To replace all wild whole fish and fish on Sustainability Assessment (COSA) and two coffee traders, Sustainable fillets with sustainable fish by-products Harvest and ECOM. The pilots aim to increase the productivity and incomes of and responsibly-farmed seafood products. smallholder farmers, evaluate the impact of our projects and provide further traceability and transparency in our supply chain.

• To develop and use sustainable By the end of 2013, we expect 100 percent of our coffee to come from alternatives to marine fish ingredients. certified sources. We currently purchase 33 percent of black tea from certified sources and continue to develop strategies for achieving our industry-leading target to source 100 percent of the fish for our pet foods 10% Increase from sustainable sources by 2020. For example, in 2012 NUTRO® removed Increase the level of recycled content all herring from its products and replaced it with menhaden from the Gulf of in our packaging by 10% by 2015, Mexico, a more sustainable source of fish of equal quality. SHEBA® currently where possible given regulatory offers five varieties of responsibly-sourced whitefish, tuna and seafood PACKAGING and food safety requirements. options and by the end of 2013, all SHEBA® recipes—including salmon—will (Recycled) meet Seafood Watch recommendations.

PROGRESS: In Victoria, Australia, Mars Petcare is involved in a unique pilot project with Increased from an average of 21% Deakin University and municipal water utility provider, Wannon Water, to in 2007 to 37.2% in 2012. assess whether treated domestic wastewater ponds provide a suitable habitat for farming fish. The fish will feed on dead biomass, providing all the nutrients they need and keeping the ponds clear without the use of 10% Reduction chemicals. If the pilot is successful, this will offer a safe source of sustainable Reduce packaging weights by 10% by 2015, fish for our pet foods. We may begin using fish from wastewater aquaculture from a 2007 baseline, regardless of by the end of 2014. PACKAGING business growth. (Weight) Mars uses only 0.2 percent of global palm oil supplies, but remains committed PROGRESS: to working with the wider industry to develop sustainable sources in the Increased by 3% from 2007 to 2012. long term. Palm oil is a high-yielding, land-efficient crop and an important raw material for the food industry. Its production contributes to economic development in many emerging markets. But high demand has led to the 100% Recyclable rapid expansion of palm oil plantations, often leading to deforestation and loss Design our packaging to be 100% of habitats in environmentally sensitive areas. recyclable or recoverable by 2015, We expect to meet our target to purchase 100 percent of our palm oil where infrastructure exists. PACKAGING from RSPO-certified sources two years ahead of our 2015 deadline. This is (Recyclability) the result of sourcing through the organization’s “mass balance” program. PROGRESS: We believe this method is the most effective way of achieving sustainable 74.8% of packaging was recyclable or supplies as it allows RSPO-certified palm oil to be gradually mixed with other recoverable at the end of 2012. sources, eliminating the complexity of maintaining two separate supplies. In 2012, Wrigley continued to enhance mint-farming practices to help Progress in 2012 increase yields and reduce environmental impacts. In partnership with the Mint Industry Research Council (MIRC), an industry-wide group with In 2012, we saw significant progress in our Sustainable Cocoa Initiative, in representation from mint farmers, dealers and users such as Wrigley, we particular our Vision for Change (V4C) program in the Soubré region of Côte advanced research that has helped improve the productivity of peppermint d’Ivoire. Through V4C, we aim to reach 150,000 of Côte d’Ivoire’s 750,000 growth by up to 50 percent. This will help lower input costs for farmers, smallholder cocoa farmers by 2020, and triple their yields to up to 1.5 tonnes reduce greenhouse gas emissions and increase yields of this important per hectare. ingredient. V4C works in four key areas of farmer productivity, community development, monitoring and evaluation, and coalition building. In 2012, Mars bought nearly Future Plans 90,000 tonnes of cocoa from certified sources - more than 20 percent of Many smallholder cocoa farmers are women. As part of the continuing all cocoa we purchased during the year. We are now the world’s largest development of our Vision for Change (V4C) program and in consultation with purchaser of certified cocoa. Achievements toward our overall target included: Oxfam, Mars has committed to conducting an impact assessment on gender equity within the program. The assessment will be carried out by a third Meeting our goal to open another eight Cocoa Development Centers party in 2013/14. (CDCs) in Soubré. Our industry partners ECOM and Barry Callebaut opened four further franchise CDCs, bringing the total number of The findings will inform our approach and contribute to a third-party report centers providing support to the region’s farmers to 17. on gender equity in the largest cocoa-producing countries. The longer-term aim is to develop common industry indicators for monitoring women’s Selecting five people to operate Cocoa Village Centers (CVC) – economic and social wellbeing in the cocoa supply chain. nurseries for the commercial distribution of cocoa plants, which provides farmers with an additional income stream.

Mars Our Operations

On-site solar panels, like those at Mars Chocolate’s factory in Hackettstown, New Jersey, U.S., are helping us reduce greenhouse gas emissions.

Pursuing sustainability is a natural extension of our objective to create a mutuality of benefits for all those involved in our business. We have the most control over the impacts of our factories and offices (our “operations”), and this is where our strategy is most developed. Driven by our Five Principles and informed by robust scientific data, we have set ambitious goals to make our operations “Sustainable in a Generation”.

Our Sustainable in a Generation (SiG) goals are deliberately challenging, aiming to decouple the impacts of our operations from production volumes. By pursuing absolute reductions, we are committing to reducing our impacts, even when production volumes increase.

Read more about Our Operations at http://www.mars.com/global/about- mars/mars-pia/our-operations.aspx

Our Approach Our goal is to eliminate fossil fuel energy use and greenhouse gas (GHG) emissions from our operations by 2040, reflecting our belief that we must play a role in mitigating the worst consequences of climate change. We are working on similar long-term commitments for water and waste.

We have set hard targets for the short term to build momentum, using 2007 as our baseline year as this is our first complete data set.

The SiG program involves four strategies for meeting our targets. Some will soon make an impact, while others require substantial development and will play a greater role in the future:

Operational efficiency: Decreasing energy use, water use and waste through changes in practices and behavior of our Associates.

Capital efficiency: Investing in more efficient equipment and processes.

New technology: Developing and deploying innovations that change the way we do things.

Renewable energy: Working with partners to generate and use cleaner types of power.

Progress in 2012 Since our 2007 baseline, fossil fuel energy use has reduced by 7.3 percent and GHG emissions by 5 percent, even though production tonnage rose by 2.2 percent in 2012. This indicates that we are seeing the benefits of improved efficiency. Despite this, progress toward our overall SiG goals has not been as strong as we would like. Energy use and GHG emissions for two of our business segments, Mars Petcare and Mars Chocolate, have increased slightly. The amount of packaging material we used has also increased by 3 percent since 2007, largely due to the inclusion of several additional business units and material used for in-store merchandising displays in our data collection.

Mars Drinks and Wrigley continued to reduce water use in 2012, but consumption rose in other segments along with production. Water use for Mars, Incorporated has reduced by 18 percent since the 2007 baseline. Waste Site performance data helps us assess to landfill has reduced in all segments, and by 55 percent since 2007 across how effective our efficiency and technology the business. measures are and determine the best We remain confident that we can achieve our 2015 targets if all the future investments. measures we currently have planned are implemented. There is no shortage of evidence of how our Associates are making this happen:

Our Mars Chocolate facility in Viersen, Germany, is 100 percent on Future Plans track toward all SiG goals, having been landfill-free since 2006, and Hitting our 2015 SiG targets remains a major commitment. In 2013 and 2014 having implemented successful strategies to improve energy and water we will focus on rolling out the best practices demonstrated at individual efficiency. sites throughout Mars, and we will continue to report transparently on our progress. Another Mars Chocolate factory in Newmarket, Canada, is using WAGES (Water, Air, Gas, Electric, Steam) meters to reduce energy and water use. The meters were installed in November 2010 and show that between 2009 and 2012, when production fell by 3 percent, energy Mars Associates Put SiG Plans Into Action use was down by 24 percent and water use by 33 percent. Analysis of meter data showed that high hot water use was driving excess natural Worldwide gas consumption. By reducing water use, steam use was also reduced Our Sustainable in a Generation (SiG) workshops identify potential and the site has achieved a double-win and received a regional award as improvements in water and energy use and increase Associates’ a Business Environmental leader. enthusiasm for delivering our SiG targets. In 2012, Mars Chocolate North America held workshops at eight sites, using the opportunity to Mars Petcare’s factory in Mirny, Russia, launched a $200,000 water train colleagues from Europe and the Commonwealth of Independent recycling scheme which is reducing freshwater withdrawal by 50 cubic States (CIS). These Associates then held workshops in the CIS, meters a day, or 12.5 percent of the site’s total usage. The new system Australia and Europe. In 2013, the program will continue to spread to captures used process water and returns it to the boiler. This saves all sites in all regions. energy as well as water, as the captured water is still warm from the previous production cycle and takes less energy to reheat. Meanwhile, Mars Drinks has launched Sustainability Steering Teams in In the United States, Mars Petcare’s supply chain operations and its two largest markets – North America and the United Kingdom – to commercial teams have collaborated to make delivery of our pet food drive progress toward and ultimately achieve our sustainability goals. products more efficient. Their work has saved 100,000 gallons of fuel These groups meet quarterly to discuss local sustainability activities and US$1 million per year, while reducing GHG emissions by 2 percent. and how they are contributing to meeting our targets, including our SiG targets. The teams also provide a forum for Associates to share Mars Food’s factory in Bolton, Canada, has reduced energy use by more ideas and best practices, both within and between markets. than 20 percent and is targeting a further 10 percent reduction in 2013. Says Jenni Morgan, Single Serve Trade Marketing Manager in the The Wrigley segment has cut energy use by 11 percent since our 2007 UK & Ireland, “we have worked to establish a dashboard that tracks baseline, even though production volumes have risen. The Plymouth our progress, we report out on our successes and challenges to the factory in the UK has reduced energy use during non-operating hours management team and we coordinate on-going activities to drive and saved over US$460,000 per year, while in Poznan, Poland, replacing engagement and education such as our Sustainability Day. We are also old cooling equipment with more energy efficient systems has reduced looking for ways we can improve, such as ramping up communication energy use by around 45 percent. – both to the management team and to all Associates across the UK Our companywide IT equipment recycling program ensures none of business.” As a result, the Basingstoke, UK, site has already achieved our technology ends up in landfill. Globally, we retire over 10,000 its 25 percent water reduction target for 2015. computers and hundreds of thousands of other pieces of equipment from more than 1,300 locations each year. Our world-class program ensures each unwanted item is wiped clean of data and then either resold or recycled. A 2012 report by environmental research organization, Trucost, benchmarked Mars’ IT recycling program against 16 similar companies and found that “Mars is the best performer among peers.” They add, “Mars has the most robust IT asset recycling policies in place and its document on IT asset recycling presents a best practice example.”

Mars Our Brands

We aim to use our brands to stimulate consumer preference for products that make a positive difference to people and the planet. Cause Marketing Our brands interact with hundreds of millions of consumers every year, giving Change on a massive scale is needed to address challenges such as us a great platform to encourage support for causes that make a difference poverty, obesity and environmental sustainability. Harnessing the for people and planet. Many of our brands already do work in this area, collective buying power of consumers as a force for good is one way to and we are committed to expanding this work in ways that will grow our bring about this transformation. business and can be sustained on a global scale. Mars owns some of the world’s most popular brands. Every day they bring pleasure and satisfaction to hundreds of millions of people and pets around the world. This provides a platform for encouraging long-term support for good causes and for helping people to reduce their impacts on the planet through their purchasing behavior.

Our Approach Our work to make our brands a force for good falls into three main categories, set out below. Sustainable Innovation and Marketing We are working on innovations that will enable us to develop and promote products with fewer negative and greater positive impacts on people, pets and the planet. As we have limited potential to reduce impacts through the way our products are used, our aim instead is to provide more sustainably sourced and manufactured alternatives and drive consumer preference for these options. Meal times are a great opportunity for Communicating Responsibly people to try new ingredients, connect with each other and have fun. The Ben’s Our brands are our primary means of interacting with millions of people. We BeginnersTM Cooking Contest is a playful U.S. take this opportunity and responsibility seriously, by being responsible in our competition, sponsored by UNCLE BEN’S®, marketing, providing clear, accurate information and promoting appropriate that brings these benefits together. use. Our comprehensive global Marketing Code sets strict guidelines for the way we advertise food, chocolate, confections and gum products across all our markets. We also play a role in developing leading marketing practices Our term for this is “Doing-Good Marketing,” and we aim for it to be at least through industry coalitions and by making and keeping public pledges to as effective as our existing marketing activity in promoting our brands. Our market responsibly. ultimate aim is for the majority of Mars brands to have Doing-Good Marketing programs in place. Brand and product-led campaigns help make sure our products aren’t used in ways that could negatively impact people or the planet. These focus on Read more about Our Brands at http://www.mars.com/global/about-mars/ the areas that are most significant to our business: responsible product and mars-pia/our-brands.aspx packaging disposal, pet ownership and snacking.

Progress in 2012 Targets Sustainable Innovation and Marketing A number of techniques help us determine which aspects of our value chain present the greatest opportunities for sustainable change. These techniques include lifecycle analysis, the Packaging Impact Quick Evaluation Tool (PIQET) and open-source research with our partners at The Sustainability Consortium.

To further our progress in this area during 2012, we began to explore a number of major product innovations that could make a significant difference to people and planet. These will be long-term projects designed to significantly reduce the impacts associated with the raw materials used in our products, while boosting consumer preference for our brands. Communicating Responsibly We do not buy advertising time or space if more than a quarter of the audience is likely to be under 12 and we do not advertise on websites aimed at those under 13. Our advertisements and promotions never* depict unaccompanied children under 12 eating snack foods, nor do we use them as spokespeople for our brands.

This is an industry leading approach. In 2012, we scored an “A” in a report card for companies’ policies on food marketing aimed at children. This was issued by The Center for Science in the Public Interest (CSPI), an influential advocate for public health and nutrition. To date, Mars is the only company to receive a score this high in the CSPI’s grading system. Cause Marketing Successful cause marketing is a win-win situation, creating sustained support for good causes and providing memorable advertising campaigns that drive business growth. However, campaigns that achieve these gains on a lasting basis are few and far between. Our target is to be a leader in this area and we are starting by putting campaigns in place for five of our global brands by 2015.

In 2012, we identified two of the five campaigns. They are:

Ben’s Beginners™, sponsored by UNCLE BEN’S®, which promotes the merits of families cooking and eating together. The campaign also shows how making rice the main ingredient of your meals can lead to a healthy and varied diet.

The PEDIGREE® Feeding Project, a new initiative to supply participating shelters with free dog food to help restore the health and vitality of pets for adoption. This will allow the shelters to focus on finding goods homes for more dogs. We will make a donation to help feed a shelter dog for every pack of PEDIGREE® Food for Dogs purchased. Future Plans In 2013 and beyond, we plan to confirm and begin work on sustainable innovations to drive consumer preference for more sustainable products, and to launch three more global Doing-Good Marketing campaigns. The PEDIGREE® Feeding Project is one of our global Doing-Good Marketing campaigns.

Mars Working at Mars

Our working environments offer plenty of opportunity for open discussion, leadership. And as a manufacturing business, providing a safe and healthy collaboration and career development. workplace is a business imperative. We maintain high safety standards in our factories and promote healthy living for our Associates at work and at home.

Our primary aim is to make Mars a great place to work and to attract, In return for above-average pay, Mars Associates work effectively to retain and engage the best and brightest Mars Associates. We try to deliver superior business performance. Our aim is for Mars Associates’ create a culture of energy, fulfillment and happiness so every Associate total compensation to be in the top 25 percent compared with appropriate can make their job at Mars mean more. Mars Associates work together competitors in a relevant geography. We perform annual benchmarks to collaboratively rather than as “employer” and “employee” and are check this is the case, and use the results to adjust pay scales as necessary. encouraged to pursue personal development, build leadership skills, and Just as importantly, we look to enable Associates to engage in their make a difference in communities. communities. This includes providing paid time off to make a difference through our Mars Volunteer Program and Mars Ambassador Program. More than 72,000 Associates in 74 countries put our Five Principles of Quality, These initiatives offer opportunities for Associates to engage in our strategic Responsibility, Mutuality, Efficiency and Freedom into action. We speak community priorities – Health and Prosperity for All, Better World for Pets, different languages and have diverse perspectives and cultures, but our Five and Greener Planet. Principles unite us to make a difference for people and the planet through our performance. This is what makes a career at Mars more than just a job. Our Approach The Mars Volunteer Program Mars is not a company of closed doors and rigid hierarchies. Our offices are open plan to help make everyone approachable, speed up communication The Mars Volunteer Program (MVP) gives Associates an opportunity and reinforce a sense of community. We value visible and approachable to take up to two days off a year to put our Five Principles into action leadership at all levels and encourage Associates to discuss their work or and volunteer in the communities in which they live, work and do concerns with any colleague at any time. Decision-making is collaborative business. By the end of 2012, nearly 12,500 Associates around the and agreement is more important than authority. This culture is designed world had spent around 50,000 hours volunteering through MVP. For to create high levels of engagement, and we measure the experience of example: working at Mars using the external Gallup Q12 survey. Associates in Scoresby, Australia, spent 169 hours painting, Our Five Principles are introduced at the start of Mars Associates’ careers weeding, gardening and mulching at a local park. through our “Essence of Mars” course, and they are continually reinforced Associates in Colombia hosted a volunteer working day with the through leadership training and our experiences of applying them in our daily “Voz Animal” foundation, which partners with the PEDIGREE® work. Mars Associates are accountable for an unusual level of responsibility Adoption Drive to rescue dogs from the streets, rehabilitate them early on in their career, often extending beyond the scope of their job and place them for adoption. description. In China, Associates volunteered at six universities to teach health At Mars, we are committed to continuous development of talent and and nutrition and recruit people to wear pedometers for a week leadership capabilities. We provide a wide range of learning and development to raise money to buy eggs and milk for children. opportunities to help Associates to progress their careers with us. Approximately 70 percent of learning takes place on the job, about 20 percent is coaching and mentoring by line managers or professional coaches, and the remaining 10 percent is delivered through courses and training. Most learning is provided through Mars University, our internal learning and development framework.

Opportunities to develop and progress are based on capability and performance, never age, gender, sexuality, ethnicity, religion, or physical ability. We have specific programs in place to nurture women and local

Associates Breakdown The Mars Ambassador Program

The Mars Ambassador Program (MAP) allows Associates to spend Associates by Region between one and six weeks anywhere in the world, supporting 39% Americas projects that improve their understanding of the communities that support our business. 19% Asia Pacific

In 2012, one Associate travelled from the U.S. to Côte d’Ivoire and 41% Europe, Africa met 122 cocoa farmers who needed, but couldn’t afford, fertilizer and Middle East to boost their crop yields and incomes. Inspired by his experience, this Associate has since helped the farmers to access funding to buy fertilizer, while learning about the challenges cocoa growing communities’ face.

In Mexico, a team of MAP volunteers joined Banfield Mexico, PEDIGREE® Mexico, and Mexican veterinary students to set up a mobile clinic which vaccinated and dewormed pets from about 1,000 families.

Progress in 2012 Associates by Segment Embedding the Five Principles in everyday working life continues to be a priority. In 2012, we piloted a new Mars Engagement Survey to help us 46.3% Petcare understand how our Five Principles impact on Associates performance and 4.3% Food levels of engagement within our business. We learned that when our Five Principles are clearly demonstrated teams tended to be more engaged and 0.9% Drinks more likely to recommend Mars as a great place to work. 23.7% Wrigley In 2012, more than 24,000 Associates received a total of 361,611 hours of learning and training through Mars University - helping them understand 21.3% Chocolate our culture, thrive in a dynamic and challenging environment and reach our 0.1% Symbioscience business goals. 3.2% Corporate We remain committed to fostering a culture of diversity and inclusion. Our Women in Sales Leadership and Women Leading Powerfully programs 0.1% Other continued to support the growth and development of our women managers in 2012. We also launched a new program to better understand our Associates’ perceptions and experiences of working at Mars. This program Key Metrics for Working at Mars is initially focusing on our North America region and may serve as a template globally.

. Metric 2012 2011

New Associates 55% 51% completing Essence of Mars training within 12 months

Associates contacting 1,464 1,048 our Ombudsman for advice about work Hours volunteered 52,880 hours >41,500 hours through MVP and MAP

Targets Recognition as a Great Place to Work Mars is recognized globally as a great place to work – we received around 20 awards in 2012 including:

New Zealand’s best workplace in the medium-to-large business category, for the third consecutive year.

Aon Hewitt’s Best Employer in Russia.

Universum Top 100 businesses in Poland.

Number one fast-moving consumer goods company in Italy, for the fourth consecutive year.

GREAT PLACE TO WORK® Top 25 Best Multinational Companies in Europe; Best employer in Belgium and Best Workplace in Greece, Spain, Belgium and Denmark.

We commission external assurance of our reporting and data to give stakeholders confidence that what we say is accurate, and to garner recommendations for further improving our strategies and performance.

Our annual Principles in Action Summary has been externally assured by Corporate Citizenship in keeping with the Accountability Assurance Standard (AA1000AS-2008). Corporate Citizenship’s assurance statement details their review of our performance and reporting.

Selected environmental data have been assured by Lloyd’s Register Quality Assurance, Inc. (LRQA).

Both assurance statements are available on our website.

Responding to Feedback

In their assurance statement in our 2011 Principles in Action Summary, Corporate Citizenship asked us to provide fuller insight into our dealings with each stakeholder group, and to select a set of key economic and social indicators. We are not yet ready to report these indicators because we are determined to develop meaningful measures of lasting, positive socioeconomic impacts, rather than simple inputs or immediate outcomes. We hope the commentary on page 8 and the summary of our roundtable discussion on page 9 demonstrate our commitment to defining and quantifying what mutuality of benefits means for all stakeholders, and we look forward to reporting against our metrics in future Principles in Action Summaries.