Nestlé Hungária Kft. Sustainability and Creating Shared Value Report Good Food, Good Life 2009 Illustrated with the drawings of Creating Shared Value Drawing Contest Contents 1. Welcome 2 2. About the Report 3 Napsugár Jancsurák Botond Nagy Fanni Melanie Gönczi 3. Key Performance Indicators 4 4. About Nestlé 6 4.1. Mission and Values 8 4.2. Brands and Products 8 4.3. Presence in Hungary 9 4.4. Organizational Chart and Scopes of Responsibility 9 4.5. Awards and Recognitions 10 5. Sustainability Institutions 11 5.1. Sustainability Policies and Procedures 11 5.2. Creating Shared Value Committee 12 5.3. Creating Shared Value Strategy 12

Mátyás Gyimesi Marcell Jeles 5.4. Creating Shared Value Management 12 5.5. Internal Organization for the Support of the Nutrition, Health and Wellness Strategy 13 5.6. Stakeholders 13 6. Healthy Nutrition 15 6.1. Stakeholder Dialogue on Healthy Nutrition 15 6.2. Product Development 16 6.3. Product Labelling 20 6.4. Healthier Employees 22 6.5. Healthier Population: Our Education and Information Programmes 24 7. Food Safety 26 Zsófi a Egri Emma Ethell Emma Horváth 7.1. Dialogue with Stakeholders on Food Safety 26 7.2. Precautionary Principles 26 7.3. Quality Policies and Quality Management 27 8. Communication with Consumers 29 8.1. Responsible Marketing 29 8.2. Consumer Service 29 8.3. Consumer Satisfaction Measurement 30 9. Our Colleagues 31 9.1. Main Targets, Projects, Results 31 9.2. Training 31 9.3. Benefi ts 33 Nóra Kanczler Hella Kornélia Koppány Zita Kamilla Koppány 9.4. Health and Safety 34 9.5. Employee Dialogue 35 9.6. Equal Opportunity 36 9.7. Employment Data 40 10. Suppliers and Raw Materials 43 11. Community Links 48 11.1. Professional Links 48 11.2 Donations, Charity 50 12. Environment 52 13. Economic Performance 58 14. Nestlé around the World in Numbers 60

Szabolcs Krajnyák Boldizsár Horváth Kíra Nagy 15. GRI-Index 61 Nestlé Hungária Sustainability and Welcome 2 Nestlé Hungária Sustainability and About the Report 3 Creating Shared Value Report 2009 Creating Shared Value Report 2009

1. Welcome 2. About the Report

Naturally the main focus of our sus- and quality foods, as well as nutrition, You are holding the second company grows according to plans, There are no other subsidiaries, tainability and Creating Shared Value health and wellness) in which we in- and that the company’s sustainability leased facilities, or outsourced activi- activities is, and will continue to be vited comments from 26 government Sustainability Report of and Creating Shared Value perfor- ties which could have a signifi cant to offer more delicious and healthier agencies, businesses, and NGOs Nestlé Hungária. mance has a strategic approach, as impact on the comparability of the re- products to Hungarian consumers. regarding our operation and our pro- The report and the infor- well as the support of senior manage- port over time and/or its comparability ducts. The fi rst stakeholder dialogue of ment. to other organizations. In 2009 we achieved signifi cant results its kind in the region within the Nestlé mation contained pertain Chapter 6 outlines our activities and in this fi eld; to cite just two examples Group was held in Hungary. Our aim to the calendar year 2009, results in the fi eld of healthy eating. This report was not audited by an from our plethora of results: we now is to continue these dialogues in the Chapter 7 details our food safety and independent organisation, but the in- offer the majority of our Maggi pro- years to come. except where otherwise in- quality control systems and initiatives. volvement of an independent audit is ducts with reduced salt content and What we do, we don’t do for awards, dicated. Our fi rst report, Chapter 8 contains a presentation planned for later reports. have begun the withdrawal of fl avour but I am glad that our efforts have the annual report for 2008 of our activities aimed at responsible enhancers as well; Nesquik chocolate been acknowledged on several fronts. communication. In case of differing interpretations of bars for example are now made only The Hungarian Innovation Founda- is available on Chapter 9 reports on our employee the Hungarian and the English ver- from natural ingredients. tion, the PR Association (CSR Best www.nestle.hu. related activities and accompanying si ons of this report, the Hungarian ver- Practice), and the Food Bank, among indicators. sion is to be considered authoritative. In 2009 our Nutrikid programme, others, have awarded our initiatives. Chapter 10 focuses on suppliers, and aimed at promoting the education of The Content of the Report Chapter 11 provides an overview of All data pertains to Nestlé Hungária Kft. healthy eating and lifestyle, reached I would like to express my gratitude In compiling the content of the report our community links. except where otherwise indicated. at least 57 000 students at 1 090 to my colleagues, who participated GRI (Global Reporting Initiative, the Chapter 12 covers the company’s envi- The data originates from Nestlé’s schools. The Internet portal of the in the preparation of this report. most widely adopted sustainability ronmental indicators and performance. internal information system and data- Nestlé Lifestyle Centre targeted at We thank you for our success and reporting standard in the world) guide- Chapter 13 contains a brief summary bases, and Nestlé’s global Creating adults was visited nearly 400 000 our results. We continue to welcome lines and indicators were taken into of our economic performance in 2009. Shared Value Report 2009. For data times. your recommendations and opinions consideration on the one hand, and Chapter 14 provides a broad over- calculation methods (where relevant), regarding our products and sustain- on the other, the important results view of the Nestlé Group. and any methods applied for mea- As a result of hard work we are able ability programmes alike. and critical issues that the organiza- surement and estimation, please refer to demonstrate improvement over tion’s managers feel Nestlé should The Scope of the Report to the relevant topics. 2008 in quite a few key indicators, report on in the framework of a sustain- Business units and production plants The brand names contained within especially with regard to the environ- ability report. The management included in the report all belong to the report are registered trademarks ment. We consider the reduction of Andrea Zambelli of Nestlé Hungária compiled the list Nestlé Hungária Kft. with one excep- of the Nestlé Group. Dear consumers, part- water used per one tonne of product Managing Director of these latter issues in 2008; the t ion, this being Cereal Partners an important achievement. most important matters have not Hungária Kft. (CPH Kft.), which is We welcome any questions, com- ners and colleagues, changed since then. a joint venture of Nestlé and General ments, or suggestions you may have Safety is a key focus point for us: Several of our colleagues participa- Mills Int. Ltd. (see Figure 1). As CPH regarding the report. Please direct It is a great pleasure for me to be able we believe that sustainable success ted in the collection of data and Kft. has no employees, distribution of any such queries to Krisztina Suhajda, to greet you for the second time on can only be reached through people, information contained in the report. its products and related activities are Corporate Communication Manager the opening pages of Nestlé Hungária therefore fi rst of all we devote all the Consulting fi rm B&P CSR Manage- carried out by Nestlé Hungária Kft. or Andrea Nagy, Secretary of Creat- Kft.’s Sustainability and Creating necessary energy and attention to ment helped in planning the process The report also covers CPH Kft. ing Shared Value Committee at one Shared Value Report. In our second protect them. A great achievement and composing the report. of the means of contact listed on the report we cover the year 2009, our that shows our commitment to this Kékkúti Ásványvíz Zrt. also belongs back cover. activities, and our results. point is the regular safety talks in our The Structure of the Report: to Nestlé, however its operations are factories. Chapter 3 summarizes the develop- largely separated from Nestlé’s other I am proud of the fact that amidst ment of our key sustainability and activities in Hungary, therefore it is truly difficult economic circumstan- We regard continuous dialogue with Creating Shared Value indicators. not a subject of this report. Nestlé Ice ces we increased our turnover and our partners and external stakehold- Chapter 4 presents Nestlé Hungária Kft. Cream Hungária Kft., which has been also succeeded in strengthening ers to be of increasing importance. and its activities. in liquidation since 1 October 2008, market shares in the focus product In 2009 we organized stakeholder Chapter 5 describes which institu- does not constitute a part of this re- categories. forums on two topics (food safety tions and procedures ensure that the port either. Nestlé Hungária Sustainability and Key Performance Indicators 4 Nestlé Hungária Sustainability and Key Performance Indicators 5 Creating Shared Value Report 2009 Creating Shared Value Report 2009

3. Key Performance Indicators

Our Key Performance Indicators enable measurement of the most important aspects of our Creating Shared Value and sustainability performance.

GRI 2008 2009 Water 3 Economic Total water withdrawal (m ) EN8 222 658 178 864 3 Net Sales Revenue (M HUF) EC1 88 995 84 640 Water withdrawal in the factories (m /t of product) EN8 1.26 1.16 3 Net Local Sales Revenue (M HUF) 38 345 40 013 Total water discharge in the factories (m ) EN21 129 692 89 278 Net Profi t (M HUF) EC1 3 505 3 834 Safety, health and environment governance Nutrition ISO 14001/OHSAS 18001 certifi ed sites 14 Product meeting or exceeding Suppliers 48.2% 51.1% Nutritional Foundation profi ling criteria* Suppliers audited for food safety, quality and processing 30 31 Renovated products for nutrition or health considerations** NA 57 Our people Products with reduction of sodium, sugars, trans fatty acids, NA 37 Total workforce (number of employees) LA1 1 345 1 308 total fat or artifi cial colourings** CARE gaps identifi ed related to Business Integrity and HR -0 Products analysed and improved via 60/40+ programme 53% 60% (based on Top50 products % of sales)** Fatalities of employees and contractors LA7 0 0 Products featuring Nestlé Nutritional Compass labelling Leadership position held by women (%) (LA13) 0 11 PR3 100% 100% (in relevant categories)*** Products featuring GDA labelling (in relevant categories)**** PR3 100% 100% Products featuring front of pack claims* 21.3% 20.7% * With the exception of nutrition products and breakfast cereals, proportional to our products distributed in Hungary. Nestlé television advertising to children under six in compliance with policies on ** In the culinary products, beverages, and confectionery categories. 100% 100% responsible marketing *** Hollow figures and pet food comprise an exception to displaying the Nutritional Compass. Water and environmental sustainability **** Exceptions to displaying the Guideline Daily Amounts: infant and clinical enteral formulas, baby food, pet food, unflavoured mineral water, coffees, and desserts. Materials Total raw materials used (tonnes) EN1 157 173 136 841 Waste for fi nal disposals (non-hazardous) EN22 10 595.7 7 359 Energy Direct energy consumption (GJ) EN3 216 694 189 281 Total on site energy consumption (GJ/t of product) EN3 1.78 1.81 Indirect energy consumption (GJ) EN4 94 813 85 314 Greenhouse gases (GHGs)

Direct GHG emissions (t CO2eq) EN16 12 157 10 618

Direct GHG emissions (kg CO2/t of product) EN16 69.5 69.89

Indirect GHG emissions (t CO2eq) EN16 9 058 8 150

Indirect GHG emissions (kg CO2 /t of product) EN16 51.79 53.64 Nestlé Hungária Sustainability and About Nestlé 6 Nestlé Hungária Sustainability and About Nestlé 7 Creating Shared Value Report 2009 Creating Shared Value Report 2009

4. About Nestlé

Nestlé Hungária Kft. was facturing and fi lling plant, while the factory in Diósgyôr is the only plant formed in 1991. During the of Nestlé in Europe specialised in the years since then the compa- manufacturing of chocolate hollow ny has been continuously fi gures. developing its product range. The pet food plant in Bük NESTLÉ S.A. Currently the company is In 1998 we acquired the Jupiter Állat eledelgyártó Kft. together with the present in the Hungarian right of use of the Darling brand and market with confectionery also the factory in Bük. Following this, an additional pet food factory was products, instant beverages, established in Bük with a 6 billion HUF breakfast cereals, pet food, investment, which, the fi rst in Hungary, is able to produce both dry and wet infant formulas, culinary and 100% pet food. Over the years, the plant professional foodservice culi- became Nestlé's Central and Eastern nary products, coffee European centre of pet food manu- facturing. products as well as clinical enteral nutrition products. Further information about the history It is estimated that Nestlé of Nestlé: http://www.nestle.com products are consumed in Nestlé Hungária Kft. is a single mem- GENERAL MILLS INTERNATIONAL LTD. 99% of Hungarian house- ber limited liability company. Since NESTLÉ HUNGÁRIA KFT. June 2009, Nestlé Hungária Kft. is holds. directly owned by Nestlé S.A a stock exchange listed company. Cereal The factories in Szerencs Partners Hungária Kft. (CPH Kft.) is a and Diósgyôr joint venture of Nestlé Hungária Kft. Manufacturing of chocolate and and General Mills Int. Ltd. The latter is chocolate-based products began at the world’s sixth largest food company. Szerencs in 1923. Prior to World War II 50% 50% this was the largest chocolate factory The liquidation process of Nestlé Ice in the country. The Diósgyôr plant be- Cream Hungária Kft. which com- gan producing chocolate and wafers men ced on 15 September 2008 was in 1962, later due to increased de- still underway in 2009. Nestlé did not CEREAL PARTNERS mand a different profi le was required. withdraw from the ice cream market; HUNGÁRIA KFT. This resulted in the establishment of a its products are still available, but modernized factory in 1978 only pro- dist ribution is carried out by legal enti- ducing chocolate. ties independent of Nestlé.

Nestlé acquired the Szerencs and Diósgyôr plants on 11 April 1991 and established Nestlé Hungária Kft. As a result of improvements, the Sze rencs factory has become Nestlé’s Figure 1: The ownership structure of Nestlé Hungária Kft. and Cereal Partners Hungária Kft. in 2009 regional powdered beverages manu- Nestlé Hungária Sustainability and About Nestlé 8 Nestlé Hungária Sustainability and About Nestlé 9 Creating Shared Value Report 2009 Creating Shared Value Report 2009

4.1. Mission and Values – Nestlé maintains its commitment The amount of products manufac- 4.3. Presence in Hungary bimon thly and decides on group-wide to follow and comply with all re- tured in 2009 in Hungary was strategic matters.The NiM Committee The main purpose of Nestlé is to pro- levant local laws and regulations. 151 938 tonnes in total. The products of Nestlé are available is led by the Managing Director of vide the consumers with the best and throughout Hungary. The head offi ce Nestlé Hungária Kft., who has a “cus- most relevant products, wherever of the company is in Budapest (H-1095 todian” role in the Hungarian market, they might live and whatever needs 4.2. Brands and products Budapest, Lechner Ödön fasor 7.) entrusted with representing Nestlé they might have through their lives. There are factories in Bük (pet food), to the outside world. The managing Nestlé Hungária Kft. is present in the in Szerencs (instant beverages) and director from 1 September 2009 is Hungarian market with the following Diósgyôr (chocolate hollow fi gures). Andrea Zambelli. Nestlé is committed in every country products: to the following business principles, One of the major logistical under- The joint management board for food with considerations to local legisla- – beverages (Nescafé®, Nescafé® takings of 2009 was the relocation of business units, the Management tion as well as cultural and religious Dolce Gusto®, Nesquik®, Ricoré®, Nestlé’s Budapest offi ces and their Committee (Mancom) makes all stra- customs: Nespresso®), consolidation to one location. Nestlé tegic and tactical decisions regarding – culinary products (Maggi®), moved from the Buda side of the business units (beverages, culinary – The business aim of Nestlé is to – professional foodservice products Danube to the Pest side, to the vici- products, and confectionery pro- create values that are sustain- (Maggi®, Chef ®, Buitoni®), nity of the National Theatre. As of ducts) falling under the direct scope able in the long-term for the – confectionery products (Boci®, spring 2009 the Budapest offi ces of of authority of the Managing Director. shareholders, the employees, Balaton®, Kit Kat®, Smarties®, all of Nestlé’s business units (with the The remaining businesses all have consumers and business partners. After Eight®), exception of Nespresso) operate in their own managing boards respon- – Nestlé does not favour short-term – cereals (Nestlé Fitness®, Nesquik®, one offi ce building. sible for their respective business units. profi t making over successful Chocapic®, Cini Minis®, Cookie Crisp®), longterm business development. – infant formula, baby food and Nearly half of the net sales revenue In compliance with Act IV of 2006 on – Nestlé recognises that its con- drinks (Beba®, Sinlac®, Nestlé®, comes from domestic commercial Business Associations, there is a su mers, who are vital to its Alete®), activities and sales to institutional cli- Supervisory Board responsible for existence, are rightly and since- – clinical enteral nutrition products ents. The other part is represented overseeing the company’s management. rely interested in the behaviour (Isosource®, Resource®, Novasource®, by revenue from commercial transac- The Supervisory Board has six mem- presented by and the convictions Modulen®) tions with foreign Nestlé subsidiaries, bers of which two are appointed by of the manufacturer of the pro- – pet food (Pro Plan®, Darling®, which is made possible by the activity the Works Council. The highest autho- ducts appreciated by them. Frieskies®, Gourmet®, Purina One®, of factories operating in Hungary and rity of the business association may – Nestlé believes that legislation in Dog Chow®, Cat Chow®) serving the CEE region. only bring resolutions on the fi nancial general is the most effective way statement required by the Act on to ensure responsible manage- Further information on the brands and Accounting after receiving the written ment, although in certain areas products are at the following websites 4.4. Organisational Chart report of the Supervisory Board. further guidance that is based (mostly in Hungarian): on voluntary business principles and Scopes of Responsibility could be benefi cial for the labour www.nestle.hu force in order to ensure the high- www.nescafe.hu Organizational Structure est standards within the entire www.dolce-gusto.hu No change has occurred in the com- organisation. www.nesquik.hu pany’s organizational structure since – Nestlé is aware that the suc- www.nespresso.com last year; the detailed chart can be cess of the company refl ects the www.maggi.hu found in the annual report from 2008. responsibility and professiona- www.boci.hu lism as well as behaviour of the www.kitkat.hu Management Boards management and the employees. www.balatonszelet.hu The NiM (Nestlé in the Market) Com- Therefore the selection and con- www.mitegyenababa.hu mittee is the highest management tinuous training of appropriate www.nestleprofessional.hu board of the organisation. The NiM individuals is important. www.purina.hu Committee holds its meetings Nestlé Hungária Sustainability and About Nestlé 10 Nestlé Hungária Sustainability and Sustainability Institutions 11 Creating Shared Value Report 2009 Creating Shared Value Report 2009

5. Sustainability Institutions

4.5. Awards and – Based on research conducted by The Creating Shared Value farmers who produce raw materials, The Nestlé Corporate Business Recognitions Figyelô-Hewitt, Nestlé Hungária Kft. inhabitants of the vicinity in which Principles and the Code of Business ranked among the companies of the business principle followed our plants are located, and our Conduct contain the minimum stan- CareerStart TOP30 in 2010. by Nestlé is grounded on supplier and commercial partners. dards, which are non-negotiable We are proud of the fact that in – In the 2009 “Most Attractive Com- world wide in addition to complying 2009 we received numerous awards. pany” survey carried out by student the belief that long-term with locally applicable legislation. These are: organization AIESEC, Nestlé re- business success is only 5.1. Sustainability Policies We shall carry on continuously de- – The wastewater related project of tained its solid 3rd place within the possible if there is harmo- veloping and adopting the Corporate Nestlé’s plant in Bük was award- FMCG sector and took 12th place and Procedures Business Principles of Nestlé (which ed special recognition in this year’s overall. ny between the interests of contains our commitment to the ten Hungarian Innovation Foundation – Nestlé received a Gold Level Spon- stakeholders and society. The values, behavioural norms and principles of the initiative by the UN competition. The company received sor certifi cate from the Hungarian policies of Nestlé and its employees named Global Compact) to the re- the certifi cates for its results in the Food Bank Association. We believe that we are able to carry are regulated by corporate documents. quirements of the changing world. area of improving wastewater treat- out more than just an environmentally, These are: The Business Principles and the ment processes and was included Nestlé Hungária Kft. took 4th place in socially and economically sustainable Management and Leadership Principles in the “Description of 21 Successful, the Reputation Rating survey and operation: we can create value for so- – Nestlé Corporate Business Princi- of Nestlé express our commitment to Award Winning Innovations Realized achieved the honourable ranking of 1st ciety, while also creating value for our ples: http://www.nestle.com/CSV/ correctness, honesty and caring for in the Year 2009” chapter of the place among food companies. shareholders. Compliance and the Hungarian people. These are accompanied by volume entitled Innovation Grand Furthermore, in 2009 the company took strategic plans for all business several other regulations and specifi - Prize 2009. place in the Good CSR programme for What do we mean by Creating units, cations. – Nestlé Hungária Kft. participated in the fi rst time. Via the Good CSR initia- Shared Value? – Local application of the Code of the KÖVET Association’s competi- tive established by Braun & Partners – With our business strategy and Business Conduct of the Nestlé The role of Nestlé’s own internal audit tion entitled “Money Back through Network both international companies operation we create value for Group, programme, the CARE (Compliance the Window”, and was listed in the and SMEs can present their corporate shareholders. – The Nestlé Management and Leader- Assessment of Human Resources, volume for the year 2009 in which social responsibility activity in a compa- – We offer our consumers delicious ship Principles: www.nestle.com/ Health & Safety, Environment and companies who achieve the great- rable manner according to a standard and nutrient-dense products AllAbout/Governance, Business Integrity) is to monitor est environmental savings are approach. www.goodcsr.com which contribute to their health – Nestlé Consumer Communication whether the operation of the company included. For further information: and well-being. Principles: www.nestle.com/CSV/ is in compliance with the Corporate www.ablakonbedobottpenz.hu – We act to improve the economic Compliance/MarkAndComm, Business Principles of Nestlé. – Nestlé won the title for CSR “Best and social situation of those in- – The Nestlé Supplier Code, Practice” in the 2009 competition volved in the entire value chain, www.nestle.com/suppliers. Sustainability agreements, of the Hungarian Public Relations initiatives Association. Nestlé receiv ed this Nestlé is a member and contribu- prestigious award for its educational tor at an international level of several activity conducted in the fi eld of ba- conventions and initiatives containing lanced and healthy lifestyle through economic, environmental or social operation of the following prog- norms. The list of these is contained rammes: the Nutrikid programme on page 14 of our 2008 annual report. aimed at children, the Nestlé Lifestyle Centre website which pro- motes public health awareness, and its internal nutrition training programme (NQ) targeted at emp- loyees. More information: http://csr.mprsz.hu – Nestlé’s sales team received the Partnership of the Year award (Progressive Professional Award). Nestlé Hungária Sustainability and Sustainability Institutions 12 Nestlé Hungária Sustainability and Sustainability Institutions 13 Creating Shared Value Report 2009 Creating Shared Value Report 2009

5.2. Creating Shared Value – increased transparency of ope- In 2009, we released our fi rst Sustain- with the products, and participate in ration, among others, through ability and Creating Shared Value the training of employees and the de- Committee annual reports on environmental Report by using the data contained in velopment of the population’s health and social performance, the GRI database. A multitude of our consciousness. The aims and composition of the Cre- – the operation of the Creating colleagues took part in the work in- ating Shared Value Committee formed Shared Value Committee, volving virtually every department in The Nutritional Compass Team is in 2008 remain unchanged in 2009 – the use of GRI as a tool for per- the company, and thus contributed to involved with creating and continu- (see our 2008 annual report). In 2009 formance management and making our activity more transparent ously updating the messages of the the committee held two meetings. planning. and to communicating our results. Nutritional Compass on the products In the fi rst meeting the committee app- enabling a more conscious choice for roved the CSV action plan for 2009 The main focuses of our social the consumer. In addition to the dieti- and decided on the issue of the 2009 responsibility activity: 5.5. Internal Organisation cian, regulatory affairs specialist and stakeholder dialogues on the basis of – Healthy nutrition and continuous the legal counsel of the company take the opinion of management and the development of our products’ for the Support of the part in the workgroup. results of the preliminary surveys. recipes Alexander Jeles Nutrition, Health and In the second meeting the committee – Promoting awareness of healthy 5.6. Stakeholders reviewed the results from 2009 and lifestyle Wellness Strategy discussed action items for 2010. – Food safety In 2008, Nestlé systematically – Reduction of the specifi c environ- The corporate communication mapped its stakeholders and the so- mental footprint of Hungarian department is responsible for imple- cial and environmental issues most 5.3. Creating Shared production menting Nestlé’s Nutrition, Health and signifi cant for the company (details on Wellness strategy. In addition, the page 16 of the 2008 annual report). Value Strategy In the fi eld of Creating Shared Value, Nutritional Compass Workgroup and We assumed that the company’s Nestlé operates with a four-year roll- a full-time dietetic consultant work on main issues and stakeholders did not The aim of Nestlé Hungária is to ing plan, thus our four-year plan is the topic. change in 2009. become the leading company in the reviewed and updated annually. field of sustainability within its sec- The dietician supports the strategic Nestlé’s most important tor in Hungary and to develop into a objectives of the company; on this stakeholders: knowledge centre within the Nestlé 5.4. Creating Shared Value basis they make recommendations Internal stakeholders group. for product development and com- – employees Management What is GRI? munication, monitor and apply the – trade unions In order to meet this aim, in 2008 regulations and policies associated – owner we vetted the CSR activities of the The Corporate Communication GRI (Global Reporting Initiative) is a company and made proposals for the Manager is responsible for the areas reporting methodology operating directions and schedule of the deve- of sustainability and Creating Shared under the aegis of the UN and esta b- lopments. Value, as well as for the implementa- lished by a Netherlands-based inde- tion of related projects, reporting pendent NGO, which is rapidly Based on the results a four-year deve- directly to the Managing Director and spreading throughout the world. lopment plan was drawn up, which the Creating Shared Value Committee. Its aim is for the practice of sustain- does not simply involve the repre- ability reporting to rise to the level of sentatives of the external and internal In 2009 we continued development fi nancial reporting, thus ensuring that environment of Nestlé, but also and expansion of our GRI database the information conveyed in the re- makes provisions for transparency which was created in 2008, as well as ports is comparable, credible, exact, and more accurate assessment. our data collection, and measurement timely, and verifi able. The GRI data- Key elements of the plan for of our sustainability performance. base aggregates all metrics demon- 2009-2012 include: Our aim is to make increasing use of st rating the social and environmental – the development of regular dia- the database as a planning and per- impact exercised by operation, thus logue with the stakeholders, formance management tool as well. ensuring a foundation for the report. Nestlé Hungária Sustainability and Sustainability Institutions 14 Nestlé Hungária Sustainability and Healthy Nutrition 15 Creating Shared Value Report 2009 Creating Shared Value Report 2009

6. Healthy Nutrition

ment of potential employers is highly Our aim is by using sci- – We only advertise such products to forum. The discussion was not just important to nearly a fi fth (18.8%) of children where the composition about listening, but provided an them, while it is of general importance ence-based solutions to complies with internal development opportunity for the debate of differing 52.38% 50% to more than half of respondents seek to improve quality of policies which are based on domes- points of view and exchange of (51.7%). tic and international dietary recom- opinion. 39.29% 40% life through food and diet, mendations. We implemented new 30% The demand for work-life balance is contributing to the health rules on the display of health, The invited experts agreed that to strong; according to Balázs Fekete, and wellbeing of consu- environmental, and sustainability boost health conscious nutrition and 20% Nestlé resourcing specialist, recent claims and labels on our products. living, it is necessary to simulta- 10% 7.74% graduates are more conscious in mers. We also aim to ge- – Our nutrition training programme for neously exert an infl uence in the fi elds 0.00% 0.60% their choice of workplace. They make children, under the name of Nutrikid, of responsible information, marketing 0% nerate greater awareness, a tangibly greater effort to achieve has been in place for years. We also communication, education, and Very Mostly Slightly Mostly not Not important knowledge and under- important important important important at all work-life balance than in years past. help our employees to master the product development alike. Further- The survey confi rmed this. art of healthy living. Furthermore, we more, raising awareness regarding Figure 2: The importance of work-life balance to surveyed fi nal year students. standing among consumers Surprisingly, this was nearly as impor- through clear, responsible endeavour to turn them into ambas- health consciousness and healthy tant to men as it was to women. sadors of our company as well as of living is not the sole responsibility of External stakeholders European Parliament, Ministry of communication. healthy living. the business sector. It is the onus of – consumers (including the special Agriculture, Ministry of Environment, The survey also highlighted the key – Dialogue with stakeholders, as well all professional organizations, mana- consumers, e.g. children, elderly, Central Agricultural Offi ce, Hungarian role that company websites play in as cooperation with government ging authorities and NGOs, as well as hotels, restaurants) Dietetic Association, National presenting companies’ responsible What we do? and other nutrition and health schools and the media alike. – local communities, especially Association for Consumer Protection conduct to career starters; this is – We invest in continuous develop- organizations are also an integral Some of our participants’ suggestions: around factories in Hungary, National Institute the primary source of information for ment and improvement in the part of our work. – social organizations and NGOs for Food and Nutrition Science, more than 60 percent of applicants. nutrition profi le of products in all – Companies engaged in public – governmental authorities Ministry of Education, Hungarian categories. More detail pertaining to all of this is catering should only be permitted – media National Assembly, National Institute The results of the survey reaffi rmed – In our recipe registration system we contained in this chapter. to work with food that is already – universities and research institutes for Health Development, Ministry of the importance of continuing to deve- keep track of products to be labelled with comprehensive pro- (primarily food industry) Local Government. lop and expand on our sustainability developed, recipes, and monitor our duct information. – experts, e.g. gastroenterologists, Dialogue with the stakeholders re- programmes, as well as the neces- results to date. 6.1 Stakeholder Dialogue – The Nutrikid programme has de- dieticians ferred to above was ad hoc, its sity of developing our website in this – We continue to reduce the salt, monstrated signifi cant results in the – schools, teachers frequency was determined by the joint regard. sugar, trans fatty acid, saturated fat, on Healthy Nutrition school education of health con- – suppliers activities as well as external circum- and artifi cial colouring content of scious nutrition and living. However, – retailers (e.g. supermarket chains) stances. our products. Furthermore, we are In November 2009 we organized in practice, corporate initiatives can- – wholesalers increasing the proportion of nutri- a stakeholder forum on the topic of not reach everyone; therefore even – FMCG companies Research among Recent Graduates tious components and useful “Nutrition, Health and Wellness”. greater government involvement is We conducted a survey of university micronutrients. Through the forum we sought answers necessary. Furthermore, at present, In 2009 Nestlé, for the second time, and college students at job fairs held – We provide appropriate and easy- to the question of which areas or specifi c policies and programmes organized a forum to get acquainted in Budapest, which sought answers to-understand guides regarding the issues leading experts in the field are lacking which would orient high with the opinions of key stakehold- to the question of what kind of role recommended amount of consumption. consider the most pressing in Hungary, school students on the subject of ers on selected issues. The topic employers’ corporate responsibility furthermore, where the responsibility health conscious nutrition. of the dialogue held in June was activities play in the preferences of of the food industry, the government, – Implementation of a broad prog- “Food Safety and Quality Food”; in fi nal year students and recent gradu- and NGOs lies. ramme encompassing manufac- November Nestlé invited stakeholder ates concerning workplace selection. turers and vendors which would comment on matters concerning Of the 19 invited agencies, educa- gradually transform the nutritional “Nutrition, Health and Wellness”. On the basis of the questionnaires, tional and research institutions, composition of products would be it is clear that responsible business advocacy groups, NGOs, market desirable. For example, initially it In 2009, Nestlé Hungária Kft. con- conduct is important to the vast ma- players, vendors, industry associa- would achieve a reduction of salt ducted varying dialogues with the jority of the young people surveyed; tions, and media the delegates of 14 content in a wide range of dis- following organisations concerned: the social-environmental commit- organizations participated in the tributed foods, complemented by

Emma Horváth Nestlé Hungária Sustainability and Healthy Nutrition 16 Nestlé Hungária Sustainability and Healthy Nutrition 17 Creating Shared Value Report 2009 Creating Shared Value Report 2009

support programmes and commu- nication, eventually followed by a moderation of sugar content. In the course of this process it is impor- tant to keep in mind the principle of gradualism, as it is necessary for consumers’ taste to change accordingly.

Participants in the stakeholder forum*: – Lajos Bárdos Primary School (Dunakeszi) – Co-op Hungary Zrt. Standard Recipe Registration Zsófi a Egri, Emma Horváth, Nóra Kanczler, Eszter Polonkai, Szabolcs Krajnyák – CORDI Research-Development Kht. System – Hungarian Dietetic Association We analyze the nutritional profi le of all Our quantifi ed targets – Chamber of Hungarian Health of our products (with the exception of Professionals strictly regulated infant formulas, Targets – Hungarian Association of Food clinical enteral products, and pro- Science and Technology ducts of joint ventures) according to a Trans fatty acids Reduce to below 1% of total energy content – Hungarian National Heart Foundation complex set of criteria. We constantly Salt Reduce by 25% by 2011 (in case of products with a salt content higher than 100 mg/100 kcal). – Népszabadság [Hungarian daily] develop the criteria in accordance – Nôk Lapja Egészség [Hungarian with the latest nutritional science re- Sugar Reduce by 5% percent by 2011. women’s health magazine] commendations of authorities (e.g. the Saturated fats A 3% reduction in total fat content and a 1% reduction in saturated fats by 2012. – National Institute for Health Devel- WHO or the EU). opment Fiigure 3: Nestlé’s nutritional content related targets. – National Institute for Food and We evaluated the products according Nutrition Science to four basic principles: – Result reached in the 60/40+ tests. fi rst in the food industry to implement and products of joint ventures). – Dietetics and Nutritional Science – The product’s role in a balanced – To what extent the nutritional comprehensive measures to reduce This counts as a very high rate when

Department, Semmelweis University diet. We display our results achieved in terms of salt reduction composition complies with quantities of these nutrients in our com pared to the global result of 83%. [Hungarian medical school] – Relevant nutrition content in the on the backside of the soup packets. Nestlé’s internal standards (NF). products; we set the target of reduc- 51.1% of the evaluated products meet – SPAR Hungary Kft. given product category (e.g. ener- – Whether the product has an ing trans fatty acids in 2003, salt in NF requirements (NF: see page 16) as a – TÉT Platform gy, fat, added sugar, calcium, advantage in terms of taste or 2005, sugar in 2007, and saturated percentage of sales. This is slightly

*This is a list of the organizations who participated in the whole grain). composition compared to its main fats in 2009. below the global average of 59%, but forum. The organizations did not comment on or approve the content of the report. – Maximum and minimum recom- competitor on the market. almost a 3% improvement compared mended quantities of nutrients Results of the Entire Portfolio to 2008. and components. Since 2003 Nestlé has targeted the In 2009 we evaluated the composition 6.2. Product Development – Recommended portion size for reduction of quantities of components of virtually 100% of relevant categories Sensory Tests the targeted consumer, adult, deemed harmful to health in case of (we did not evaluate strictly regulated The sensory laboratory in Szerencs is We continuously review the nutrition or child. excessive consumption. We were the infant formulas, clinical enteral products, Nestlé’s sensory testing centre of its composition of our products, and wherever possible, improve their compo- Products that comply to all recom- 2008 2009 sition by developing the recipes. When mendations are placed in the „Nestlé As a percentage of total net sales* innovating recipes, our primary aim is to Nutritional Foundation” or „NF” The part of the portfolio the nutritional composition of which is in accordance with internal 48.2% 51.1% reduce components the health impact of category. development policies and international dietary recommendations (NF) which is contested (e.g. salt, sugar, trans Results reached in the 60/40+ tests Claim located on the front of the product packaging related to the health impact of the 21.3% 20.7% fatty acid) and increase the quantity of are added to the NF evaluation system. product’s composition On the Fix products packed together with cooking bags, benefi cial nutrients (e.g. whole grains, Consequently, the whole set of the role of the bag in modern cooking is communicated. Figure 4: Results in development of nutritional composition and labelling communication vegetables, calcium) in the products. criteria is as follows: * With the exception of infant formulas and breakfast cereals Nestlé Hungária Sustainability and Healthy Nutrition 18 Nestlé Hungária Sustainability and Healthy Nutrition 19 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Nestlé global Nestlé Hungary Central-Eastern-European region in 60/40+ development ning 10 test projects for 2010. As a percentage of total net sales* the category of instant beverages. The TOP50 (the 50 goods with the The part of the portfolio the nutritional composition of which was evaluated The independent assessors working The 60/40+ concept is a special highest turnover) products participating 83% nearly 100% on the basis of its health impact in the laboratory carry out sensory method developed by Nestlé, which is in the 60/40+ development process The part of the portfolio the nutritional composition of which is in accordance with internal development tests for the relevant 60/40+ research used during product development. comprised 60% of the turnover of this 59% 51.1% policies and international dietary recommendations (NF) (see below) and other tests related to The demand that lies in the background category. Claim located on the front of the product packaging related to the health impact product development and product is that consumers would like food 28% 20.7% of the product’s composition quality tracking. In 2009, 35 research products that are healthy and tasty Outlook: Nestlé on an

Figure 5: Results as part of an international comparison projects were conducted in the lab as well. Therefore, we strive to manu- international level using 20 sensory assessors. facture products which meet the Nestlé invested around CHF 2 billion approval of at least 60% of the con- in research and development last year. Continuous quality control is extremely sumers with their taste, in addition to This included the opening of the “I would recount the Maggi novelty launched in 2009, Maggi “Omlós fortélyok” (Tender Smartness) fried chicken fi x accompanied by a cooking bag, important in production; for this reason also having ‘extra’ dietary advantages. Abidjan Research & Development Cen- as the success story of 2009. This facilitates preparation of the food without adding fat, thus supporting the realization of a modern diet. In 2009, the a group of trained taste experts works tre in Côte d’Ivoire in April 2009 and garlic fried chicken fi x – member of a product range consisting of three fl avours – performed well in the 60/40 taste test as well.” in our plant in Szerencs. Every day In addition to assessing the taste, an- the CHF 25 million Chocolate Centre Zsuzsanna Szûcs – Dietician of Nestlé Hungária Kft. begins with a taste exploration; pro- other important element of the process of Excellence in Broc, Switzerland, ducts manufactured on the previous is assessing the nutritional composi- our most recent demonstrations of day are put into the test and are only tion of the Nestlé products. In the our commitment to R&D. Through the How many The direction of product transferred to “saleable” status in course of doing so, we examine the Nestlé Growth Fund, we have also Product – specifi c steps development types are case of compliance. nutritional content and quality of the invested CHF 742 million in promising affected? main ingredients of our products and new Nutrition, Health and Wellness Maggi fi xes: development of recipe free of fl avour enhancers (monosodium glutamate). The natural taste of spices and 6 On an international level compare them with Hungarian and businesses. We also continue to vegetables becomes more palpable once fl avour enhancers are removed. The Nestlé Group operates the world’s international dietary recommendations, foster innovation partnerships with Smarties, Frutti: removal of artifi cial colouring, in the future we will only use natural plant extracts. 19 largest privately owned food industry as well as with the data of competi- business partners and have 385 col- More natural Nesquik bar: all natural recipe, only natural ingredients. 1 research and development network, tors’ products. The evaluation sheds laborations with universities. components employing approximately 5,000 people. light on the strengths and shortcom- Boci dark chocolate hollow fi gure with natural orange chunks: natural orange powder and dried orange chunks were 1 added to the mass of the orange dark chocolate hollow fi gures. The heart of the development activity ings of the given product, and sets is in the Nestlé Research Centre in the direction for further improvement After Eight: removal of artifi cial fl avour, in the future we will only use natural mint extract. 4 Lausanne. Over 300 scientists of of the product. Reduction of salt Maggi fi xes and soups: the added salt content of soups decreased by 7-34%, and in case of food bases a 4.7-27% 6 50 nationalities work on continuous content reduction was achieved depending on the recipe. developments and new research in In 2009, a total of six 60/40+ test “Maggi omlós fortélyok” (Tender Smartness) fried chicken fi xes: a cooking bag is included in the product packet; the More mo- 3 the centre. projects were underway. We are plan- dern recipe or cooking bag facilitates preparation of the food without adding fat. preparation Boci 50 g tablets: made with sweetener (maltitol) instead of sugar, can be consumed by diabetics as well. 2 Packaging that “Balaton falatok” (Balaton bites), Boci Aero Mini, Kit Kat Mini: portions can be divided, the packaging contains 4 is lighter or more separate bits in smaller sizes. As a result, the quantity of sweets consumed can be easily regulated. conducive to Balaton Snack, Kit Kat Senses: wafer based, thus the sweets are lighter in weight and consistency. 2 portioning We highlight the energy content (69 kcal/bar) of Balaton snack bars on the packaging. “Maggi Zöldséges Ízvarázs”: richer vegetable fl avour 4 Flavour profi le Nescafé Classic: even more intensive coffee fl avour, scent, and taste. 5 Total 57

Figure 6: Development of product taste and composition in 2009* * In the culinary products, confectionery, and beverages categories. Nestlé Hungária Sustainability and Healthy Nutrition 20 Nestlé Hungária Sustainability and Healthy Nutrition 21 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Outlook: Nestlé on an international level tant public health priority. Our nutritional of the joint work of scientifi c experts, The Compass is not displayed on on desserts (not relevant), and on The Nestlé Nutrition Institute is the profi ling system, for example, is based government, NGOs and companies. the hollow fi gures (there is no place products containing only coffee (their world’s largest private publisher of on appropriate portion sizes for the (Further details on page 19 of our an- for it on the label) or on pet food (not energy content is negligible). nutritional information, and its website intended consumer, and all criteria nual report from 2008). relevant). The GDA is not displayed Nestlé complies in every product provides access to an online medical thresholds have been established on on infant and clinical enteral formulas, category with the data provision and scientifi c library, educational tools, each product’s role in a balanced diet. Compass and GDA on Products on baby food (the differing require- requirements listed (in part voluntarily) online workshops and information In 2009 both the Compass and GDA ments of the ill and the infants do not in fi gure 7 below. on forthcoming events. The Nestlé For example we use appropriate por- were displayed on the packaging of allow the development of a common Nutrition Institute site has more than tion sizes in the above-mentioned all of our relevant products. reference), on pet food (not relevant), 65 000 registered members who can component evaluation system. One of access increasingly customised infor- the main drivers behind establishment mation through chat rooms, news- and application (currently displayed Nóra Kanczler Type of information Food products Nespresso products Pet food letters and forums. Read more at on all of our relevant products) of the www.nestlenutrition-institute.org Nestlé Nutritional Compass (see be- dietary fi bre and sodium content of The source of the products is mostly displayed on packaging. The origin of the components or the low) is the communication of healthy 100 grams or 1 portion of food) of a There is no legal obligation for displaying Yes No product or service portions to consumers. In order to pro- given product, on different dietary the origins of the ingredients. The Promotion of Conscious Food mote the moderate consumption of recommendations, the physiological Consumption sweets, we introduced tablets with traits and composition of the specifi c Ingredients, with special consideration Yes (on 100% of the products) to materials with a potential Yes No Proper portion sizing of products, as resealable packaging and our small- basic ingredients, or sometimes on Displaying allergens, voluntarily undertaken well as providing portion recommen- sized Balaton Falatok (“Balaton the culinary curiosities related to the environmental or social impact. dations, rank very high in Nestlé’s Bites”), Balaton Snack, Kit Kat Mini, product. Method for safe use of the product Yes, where it is relevant, e.g. culinary products, efforts to become the preferred nutri- and Boci Aero Mini products. (Further details on page 18-19 of our Yes Yes, if relevant tional partner to consumers. Making annual report from 2008). or service making coffee and cocoa diets healthier and more balanced may Outlook: Nestlé on an international level Managing the product as waste and call for reducing portion sizes in some In 2008 and 2009, we have acceler- Yes (100% of the products) No Yes its environmental/social impacts cases, or increasing size or frequency ated our research initiatives in the area of consumption in others. The correct of portion guidance and will continue Figure 7: Data provision on Nestlé products portion size and consumption fre- reaching out to consumers in more quency are increasingly considered to and more relevant ways to support be a key public health consideration their efforts to balance their diets. among nutrition stakeholders, as popu- Fine or penalty Amount (Ft) and the reason for the penalty lations worldwide are struggling with 6.3. Product Labelling 200 000: As a result of a production error the drained net weight of the 800 g Nesquik product was less than the value rising obesity problems as well as de- Beverages fi cient intake of some essential nutrients. Numerous studies and professional displayed on the packaging. recommendations emphasize that the Nestlé Nutritional Compass and Guideline Daily Amounts labelling 60 000: Dating error, the day was unnecessarily displayed on the 80 g Maggi Hungarian Fish Soup cube. For several years now, Nestlé has key to a balanced diet is the proper Culinary products been actively working on this impor- and varied selection of food. One of 100 000: As a result of production fl uctuation the salt content of the 200 g “Maggi Ízvarázs” was 1% higher than that of the biggest aids in this regard is the Guideline Daily Amounts, GDA the prescribed quality parameter. nutritional information which can be The GDA food labelling system shows 200 000: According to the relevant authority the cocoa solids content of the “Boci Bársony” product did not meet the Confectionery found on food packaging. the full daily amount of the energy, value displayed on the packaging (due to a production error). protein, carbohydrate, sugar, fat, Warning The reason for the warning Nestlé Nutritional Compass – com- saturated fat, dietary fi bre and sodium pass for creating a balanced diet requirements of the diet with a ba- Beverages Letter size on packaging too small: Coffee Mate 170 g The Nestlé Nutritional Compass pro- lanced nutritional composition for an Figure 8: Fine or penalty with regard to the information providing and labelling vides easy-to-follow and clear adult, in addition it also indicates the associated with the products and services. information on the nutritional compo- proportion of GDA that one portion sition (the energy, protein, fat, of the given food represents. Interna- Hella Kornélia Koppány saturated fat, carbohydrate, sugar, tional, industrial initiative: the result Nestlé Hungária Sustainability and Healthy Nutrition 22 Nestlé Hungária Sustainability and Healthy Nutrition 23 Creating Shared Value Report 2009 Creating Shared Value Report 2009

6.4. Healthier Increasing nutritional knowledge – Foundation module: an indepen- To complement “classroom” train- vailing risk specific to them and in the workplace dent programme for the training ing in 2010, we are introducing an consult with a psychologist. Further- Employees The health of our colleagues is essen- of Nestlé employees who in the interactive e-learning programme and more, the opportunity was provided tial for high level corporate operations, course of their work typically do tools (series of posters highlighting to complete various tests (body Fruit tree planting in Bük As we have no experience in the plant- at the same time the rapid spread of not have direct consumer contact; key messages) aimed at harder to composition, blood pressure, blood One day, I was holding a safety inspec- ing of fruit trees, we looked on the non-contagious diseases (e.g., cardio – Advanced module: a further step- reach (e.g. physical) workers. sugar, cholesterol level) and take tion in the Bük plant, and I happened internet for information on how to do it. vascular diseases, diabetes and obe- ping stone for employees who part in consultations related to nutri- upon an apple tree next to the fence At 10 o’clock on Friday morning, our sity) attributed to bad eating habits, regularly communicate with clients Screening Tests tion and physical activity. full of tasty apples. That’s when the enthusiastic group – about 30 emplo- lack of exercise and smoking, dama- or consumers; Every year since 2006, we have or- idea was born: why not plant some fruit yees – appeared at the hill referred to by ges productivity and generates – Specialist module: we place special ganized screening tests in Budapest trees? (A long time ago, a cool chamber us simply as “Himalaya”, and realized additional costs. emphasis on understanding the for employees. In 2009 the topic of full of apples operated on the site of our with surprise what the task actually was. consumers and on applying the di- workplace stress management was factory, and there used to be scores There was a lot of construction debris The workplace is an ideal place for etary and lifestyle strategy of Nestlé at the forefront; colleagues were of apple farms in the area). From that left in the area from previous work, so taking preventive steps, due to both in each of the product categories. given the chance to assess the pre- point on, only two enthusiastic help- fi rst we had to clean it up. To that end, the number of people and the time ers were needed in the persons of Alíz we ordered a large container. As the spent there. Though there are no Programme description 2006 2007 2008 2009 Sátori (Quality Assurance Manager) and task at hand was about team building, quick solutions, and everybody has to Number of participants/employees reached László Horváth (Factory Engineer). After we designated pairs who were “known” take responsibility for their own life- Head offi ce a little further brainstorming, the “Apple not to be “fond of” one another, and style, with the appropriate tools and Avenue” project was born. they had to plant the trees together. motivation, the employer can play a NQ training (foundation, advanced, specialist) – 155 117 61 In total secrecy, we bought 28 fruit People participated from nearly every signifi cant role in raising awareness. Health survey (+ diet programmes and offi ce massage in certain years) Announced to all employees trees (10 apple, 4 sour cherry, 3 cherry, department, members of management, Health weeks (information via e-mail regarding healthy nutrition and lifestyle, poster campaign, Announced to all employees 4 plum, 4 nut, and 3 pear trees) and offi ce workers, foremen, group leaders NQ training alternative tools: armrest, screensaver; product packages) announced a two hour team building etc. Everyone was extremely enthusi- Healthy nutrition is everybody’s busi- Subsidized exercise facility through contracted partner Provided to all employees exercise. We designated the hill next to astic, worked cheerfully, and in an hour ness at Nestlé and the continuous the bio fi lter as the location for the fruit and a half, 28 trees stood in their place. learning connected with it is essential Internal monthly newsletter, interesting, topical articles in WellNes section Sent out to all employees trees. It’s an area that can’t be used The GMP (Good Manufacturing Prac- for being a leading nutrition, health Purina Budapest for anything else as its “removal” would tice) group agreed in the future to look and wellness company. Subsidized fi tness facility through contracted partner – Provided to all employees cost tonnes of money. In other words, if after, prune, and spray them so that in construction of some kind later comes a few years’ time there will be a fl avour- In 2009, 163 colleagues in the head Health survey (+ massage in certain years) – – 36 12 to pass, the trees won’t have to be ful harvest. offi ce and in the plants in Szerencs Health weeks (information via e-mail regarding healthy nutrition and lifestyle, poster campaign, – Announced to all employees harmed. We created shared value... or Diósgyôr, including colleagues alternative tools: armrest, screensaver; product packages) We designated the exact location of the working next to the conveyor belts, Szerencs trees ahead of time and got the shov- Ágnes Markócs took part in the global NQ training NQ training (foundation) – – 229 93 els, manure, and potting compost. HR Manager (Nutritional Quotient) programme Health weeks (information via e-mail regarding healthy nutrition Announced to all (details on page 33 of our 2008 an- – – nual report) introduced in Hungary in and lifestyle, poster campaign) employees 2007. Since 2007 a total of 821 peo- Diósgyôr ple have taken part in NQ trainings. NQ training (foundation) – – 169 – Our aim is for all of our employees to Health weeks (information via e-mail regarding healthy nutrition Announced to all complete the Foundation module by – – and lifestyle, poster campaign) employees the end of 2010. Bük NQ training modules Health weeks (information via e-mail regarding healthy nutrition Announced to all – – The key to the success of the train- and lifestyle, poster campaign) employees ing is the interactive and tailor-made Unlimited fi tness facility through contracted partner – Provided to all employees modules, which encourage the par- ticipants to take practical action: Figure 9: Additional internal programmes of ours related to healthy living Nestlé Hungária Sustainability and Healthy Nutrition 24 Nestlé Hungária Sustainability and Healthy Nutrition 25 Creating Shared Value Report 2009 Creating Shared Value Report 2009

In addition to those listed in the table: the topic of celebrity diets as well. Nestlé Lifestyle Centre In addition to the advice of the ex- – Nestlé’s internal monthly newsletter Deputy Editor of ELLE Leonóra Mörk “Showing the way in the labyrinth of perts, the website also offers useful (including WellNes section) is sent and page setters poured the prepared dietary trends” articles, videos, tests, and calculators to employees in Szerencs, Diós- text into magazine form. Their work was Link: www.eletmodkozpont.hu, on numerous topics such as healthy gyôr, and Bük as well. evaluated by an expert panel: President www.nestle.hu/eletmod living, diet, health prevention, beauty – In Bük the company also provides of the Hungarian Dietetic Assoc iation care, relationships, family, or child care. the opportunity to play football. Emese Antal, lifestyle-journalist and The experts of the Nestlé Lifestyle The patron of the Nestlé Lifestyle – Also in Bük we set up a fi rst aid Editor of Metropol Levente Z. Szabó, Centre who provide individually tailored Centre is the Hungarian Dietetic spot at the summer party for edu- Chief Editor of DUE Tallozó magazine responses to the incoming letters: Association. cational purposes, with particular Orsolya Zala, and Corporate Commu- – Family GP In 2009 nearly 400 000 visits were on emphasis on home safety (espe- nication Manager of Nestlé – Dietician the lifestyle portal; throughout the year cially for children). Krisztina Suhajda. – Personal trainer the experts fi elded more than 1 600 – Free fruit and mineral water for – Psychologist questions related to health and bal- employees every day in the “As a dietician I am very glad that children are anced living. Budapest offi ce and in the plants. preparing a student magazine about healthy Launched in 2005, the Nestlé Lifestyle Furthermore we provide mineral living, as children learn most easily about bal- Centre is an internet service centre water to area sales representative. anced nutrition from each other,” said where experts help those interested to President of the Hungarian Dietetic Associa- receive answers to their questions re- tion Emese Antal. lated to diet, exercise and healthy living. 6.5. Healthier Population: On the interactive interface the children lifestyle and nutrition in student lingo, Our Education and Infor- are awaited by interesting readings, directed at their own age group, was mation Programmes the fi lm entitled “Secret of the Pyra- compiled using their writings. mid”, and games as well. A separate 800 701 In Hungary, Nestlé contributes with menu option aimed at adults is also Out of the 99 participating primary 700 several programmes to the develop- available on the website. From schools and 152 teams, the four best 600 515 ment of health consciousness and to Novem ber 2008 to May 2009, regis- teams made it to the fi nals of the 500 the promotion of a balanced diet and tered visitors to the site were given 2009-2010 national competition. 400 a better way of life. The fl agship of the chance to win Nutrikid gifts and The Budapest Diadal úti Primary 300 these programmes is Nutrikid. sport supplies. School’s Ökodiadal team and the 238 200 186 Since 2003, more than 260 000 pu- VitaminKids team of the Magyarnán- Nutrikid pils from 2 800 primary schools have dori Primary School came through in 100 The Nutrikid Programme, developed learned using the Nutrikid programme. the blog category of the semi-fi nals, 0 for the 10-12 year old age group, was In the 2009/2010 school year, 1 090 while Sándor Petôfi Primary School’s Family GP Psychologist Dietician Personal trainer launched in conjunction with the Hun- schools ordered 57 000 Nutrikid exer- Megazsír team from Túrkeve and the Figure 10: Questions directed at experts of the Nestlé Lifestyle Centre garian Dietetic Association in 2003. cise books. team of Egészségtudorok from the Any primary schools in Hungary may Ferenc Kölcsey Primary School in join the free programme. The Nutrikid Nutrikid School Competition Törökszentmiklós made the semi-fi - programme package is an advertise- Nutrinews - Lifestyle journalists of nals of the printed magazine category. ment free exercise book for children, the future rich in playful elements, containing Nestlé’s headquarters turned into an In the fi nal the children wrote among a fi lm with cartoons and a teacher’s editorial offi ce on account of the com- other things about the problems of manual to assist educational work. petition announced for the 2009-2010 teenage diets; they prepared an inter- school year. In the Nutrinews fi nal, the view about vegetarianism with Nestlé Interested primary schools can get children dealt with the topics of Dietician Zsuzsanna Szûcs; they con- acquainted with the material of the healthy lifestyle and nutrition. Nutrikid ducted a survey of their classmates’ Nutrikid educational programme all year Magazin, the fi rst national publication breakfast habits. In fact, worthy of a round at the website www.nutrikid.hu. in which students write about healthy real lifestyle magazine they covered Botond Nagy Fanni Melanie Gönczi Nestlé Hungária Sustainability and Food Safety 26 Nestlé Hungária Sustainability and Food Safety 27 Creating Shared Value Report 2009 Creating Shared Value Report 2009

7. Food Safety

7.1. Dialogue with Stake- Participants of the forum*: Dr. Ferenc Mohos, Professor of the Col- 7.3 Quality Policies and Quality, occupational health and • Campden and Chorleywood Food lege of Food Engineering, University of Quality Management safety, environmental management holders on Food Safety Industry Development Institute Szeged explained: “The scope of know- policies, which briefl y and compre- Hungary Kht. ledge related to nutrition is rife with charla- Nestlé and Quality hensively summarise the principles The stakeholder forum organized in • Hungarian Technological Platform tanism. For this reason I count on Nestlé, Under no circumstances do we make and commitments of Nestlé Hungária June 2009 in line with international • Federation of Hungarian Food the fl agship of scientifi c research, in the any compromise as far as safety of Kft. in these fi elds. (The document is methodology dealt with the topics of Industries fi eld of raising public awareness in a cre- our products is concerned; we have available on the www.nestle.hu web- food safety and quality food, espe- • Hungarian Branch of Eurosugar S.A.S. dible manner. Furthermore, the company to do everything to ensure that we site in Hungarian.) cially with regard to the ability to track • Ministry of Agriculture should seek those solutions which are offer products of the highest quality to products and product components, and Regional Development the most relevant. Nestlé communicates our consumers. Accordingly, it is our Quality management system product labelling, and the support of • Waste Management Working Group useful product features to consumers duty to comply with relevant legisla- Nestlé Hungária Kft. is continuously conscious consumer conduct. The • Central Food Research Institute in a more effective way than the current tion and provisions; this is an issue developing its quality management Figure 11: NIMS: one system - fi ve international standards fi rst stakeholder dialogue of its kind • Hungarian Food Safety Offi ce market does as a whole. Thirdly, SMEs that is not subject to negotiation. system. In April 2009, SGS Hungária in the region within the Nestlé Group • Central Agricultural Offi ce Food Chain are able to achieve greater market suc- Appropriate human resources, equip- Kft. certifi ed the company’s process- The NIMS system: was held in Hungary. Safety and Animal Health Directorate cess through special food products than ment, and tools are at our disposal based, Nestlé-specifi c Integrated – Management tool which facilitates Attendees of the forum not only • National Consumer Protection through imitation, as is often the case. in order to ensure the safety of Nestlé Management System (NIMS). It covers management in the areas of quality, shared their own opinions with Nestlé, Authority It would be worth it for Nestlé to provide products and their compliance with everything from product development food safety, health, and the environ- but engaged in lively professional dis- • National Institute for Food professional support to those companies, requirements. to consumption and activity associ- ment. course amongst themselves. Partici- and Nutrition Science for instance through the transfer of proven ated with customers and consumers. – Results in a conscious approach pants unanimously considered access • National Association for Consumer best practices.” The keys to the successful implemen- The essence of the system unique and continuously improved per- to more detailed information concern- Protection in Hungary tation of high quality requirements are by Hungarian standards is that it in- formance in these areas. ing products and product origin and • Dietetics and Nutritional Science 7.2 Precautionary Principles training and teamwork. Continuous cludes the internationally recognized – Ensures full compliance with reinforcement of market trust among Department at the College of Health training is provided so that everyone quality (ISO 9001), food safety (ISO standards. participants in the value chain issues Care, Semmelweis University Events that could have a negative im- clearly understands their own tasks 22000), environmental (ISO 14001) of importance. In addition, the en- • College of Food Engineering pact on either Nestlé, the environment and possesses the necessary skills and health/work safety (OHSAS The integrated management system hancement of links between the busi- at the University of Szeged or society are continuously monitored to carry them out. 18001) standards and Nestlé’s own operates within the framework of the ness sector and academia emerged • Wessling Hungary Ltd. by different groups, crisis committees quality management system (NQMS). company’s own global quality man- as a key topic. both at international and local level. In order to make every employee feel The certifi cation is valid until 2012 for agement system, the Nestlé Quality *This is a list of the organizations who participated in the forum. The organizations did not comment on or approve Their task is the prevention of crises comfortable with all of this, we orga- the following activities: production, Management System (NQMS). the content of the report. and crisis management. Within the nize a training at the head offi ce in distribution and sales of chocolate and (Detailed account on page framework of the Nestlé international Budapest by the name of Faces of other confectionery products, semi- 17 of our annual report from 2008). According to MARD State Secretary for crises management system, strict in- Quality, which describes the operation fi nished products, instant cocoa Food Chain Control Dr. Miklós Süth: ternal reporting systems and in-com- of the quality management system, powder, and coffee specialities, marke- Alexander Jeles “Transparency, openness, and the es- pany regulations govern what actions the practical application of the law, ting and development, and maintain- tablishment and maintenance of mutual to take. In addition, rapid response techniques for managing consumer ing contact with consumers. It also trust is the joint social responsibility of is enabled by international telephone relations, and the sensory test process. applies to the development, distribu- market players. Furthermore, whenever conferences, information directly tion, and sales of culinary products, possible, fulfillment of the principle of originating from international organi- Institutional and regulatory system infant formulas and baby food, and proximity is important through local sations, e.g. WHO of the UN, as well Nestlé has an extensive institutional other food and wellness products. production and procurement. In addi- as from the Nestlé Research Centre. and regulatory system in the fi eld of Our pet food plant in Bük also ob- tion, I believe that the development of food safety and quality. The elements tained certifi cation for its processes an environmentally conscious approach Nestlé operates a comprehensive of this are: according to the same standards. with respect to food products is im- product recall process at every distri- portant. In closing, it is worth identify- bution centre, including in Hungary. In 2009, our most signifi cant task and achievement was the improvement of our quality management ing more specifically what NGOs, who This process includes all necessary system by implementing and successfully obtaining certifi cation for our integrated management system represent the consumer, are concerned information to carry out a safe, timely, at every site of Nestlé Hungária Kft. about, and what kind of expectations accurate and cost effective product Elvira Pletyák-Mihályné - Quality Manager and Deputy Regional they voice.” recall. Technical Manager in Hungary, Nestlé Hungária Nestlé Hungária Sustainability and Food Safety 28 Nestlé Hungária Sustainability and Communication with Consumers 29 Creating Shared Value Report 2009 Creating Shared Value Report 2009

8. Communication with Consumers

Department of Quality Assurance tasks necessary for ensuring produc- entire organisation (including the data 8.1. Responsible Marketing 2009, examining consumer under- – Amendment to Act CLV of 1997 Two persons carry out the tasks as- tion, the in-process controls and the of business partners) is analysed; standing issues, rigorous scientifi c on Consumer Protection sociated with the operation of the internal audits. any decisions, activities and training Responsible communication with validation procedures, and multifunc- – Amendment to Act LVII of 1996 quality management system in the necessary for the development of the consumers has been a part of tional teamwork and responsibilities. on the Prohibition of Unfair and centre of Nestlé Hungária under the Quality performance objectives quality specifi cations are determined; Nestlé’s business principles since Deployment of more comprehensive Restrictive Market Practices direction of the regional quality as- The regional and specifi c local objec- short-term and strategic opportuni- 1999. Consumer Communication tools and training for all marketing (Competition Act) surance manager, as well as the tives are set in accordance with the ties are identifi ed and an action plan Principles: staff is ongoing. In 2009, no cases of non compliance management of the quality issues of quality policy, following the central is prepared. – encourage moderation, healthy with the above were registered by the partner departments, consumers, directive of the company. eating habits and physical activ- International Outlook: department. customers, suppliers and authorities. ity and, in the case of children, Advertising to Children Management Review of Quality without undermining the authority Nestlé had, by the end of November Besides all this, our voluntary under- Separate quality assurance organisa- (MRQ) of parents or creating unrealistic 2009, joined eight voluntary industry taking is that prior to release, based tion operates in the factories under This takes place at least annually. expectations of popularity or suc- initiatives covering 34 countries on re- on the decision of the marketing the direction of a local manager, Within its framework any data as- cess; sponsible food and beverages adver- brand groups, the adverts are sent to which include amongst others the op- sociated with the quality assurance – are required reference points for tising at a national and regional level. the Self-Regulating Advertisement eration of the laboratories, the quality activities and originating from the all marketing staff and advertising One of these is the EU Pledge (the Association for opinion. – children are a specifi c part of these EU commitment extending to all 27 Principles, including two important member states), the aim of which is provisions, preventing advertising to support and promote healthy living, 8.2. Consumer Service or marketing activity directed at and achieve the voluntary restriction children under six years old, and of advertising aimed at children under Getting to know the requirements of restricting advertising for children the age of 12. the consumers of Nestlé products aged 6–12 to only those products All of the initiatives are audited by or even staying ahead of their require- that help them to achieve a third parties independent of their im- ments is very important for the com- healthy balanced diet, including plementation. Results from the fi rst pany. In addition, Nestlé considers it clear limits for sugar, salt and fat. independent monitoring report of the essential to provide opportunities for EU Pledge show a 93% decline in the consumers to express their opin- The above rules have been enforced advertising of products that do not ions and ideas. The Consumer Service in all countries, thus also in Hungary meet companies’ nutritional criteria was established to fulfi l this purpose. by the end of 2008. in programmes targeted at children. Compliance across the industry was We inform those interested of Nestlé’s Nestlé has developed a set of “Imple- consistently high. newest brands, products, and the mentation Guidelines” and a monitor- use and availability thereof. With the ing system to ensure compliance with The legal department of Nestlé assistance of our nutritional science the Consumer Communication Princi- Hungária Kft. continuously monitors experts we are able to offer profes- ples. compliance with the following legisla- sional information regarding nutritional tion and voluntary norms associated questions. In light of regulatory developments with marketing communication: Our consumers express great interest worldwide and increasing consumer – Act XLV of 2008 on the Prohibi- in Nestlé’s latest contests. Our collea- interest, Nestlé has reviewed and tion of Unfair Commercial Prac- gues are glad to provide information reinforced its internal approach to the tices against Consumers regarding the terms of participation, development and validation of nutri- – Act XLVIII of 2008 on the Basic drawings, and list of winners. tion and health claims. A ‘General Requirements and Certain Instruction’ document describing all Restrictions of Commercial Advert- The Consumer Service, in addition to mandatory procedures was published ising Activity (New Advertising Act) providing advice and information, and promoted across the Company – Act LVIII of 1997 on Business by utilising the comments and ideas in late 2008. A detailed Claim Devel- Advertising Activity (effective until received from the consumers, also Alexander Jeles opment Standard was then issued in 1 March 2009) makes proposals for product devel- Nestlé Hungária Sustainability and Communication with Consumers 30 Nestlé Hungária Sustainability and Our colleagues 31 Creating Shared Value Report 2009 Creating Shared Value Report 2009

9. Our colleagues opment, thus representing consumer – The strengths of Nestlé’s Consumer fi gure in 2009 was 0.25; in other Our aim, through continuous We offered employees in Budapest As the result of the conversations, interests within the company. Service include qualifi ed and con- words, there were 0.25 com- a career consulting session. Approxi- transfers and project-like collabora- The reasons for consumer complaints sumer friendly service, as well as plaints for every 1 million products training and professional de- mately 90 colleagues availed of the tions were initiated. It is a positive are thoroughly investigated in order to the ability to safeguard the com- sold. velopment, is to provide our opportunity. sign that, in case of many colleagues, be able to make the necessary cor- pany’s image and build consumer – 60/40+ tests. colleagues with better work the organization reacted to needs that rections as well as providing rapid and loyalty toward the company and – Brand Health Tracking: annual “A career path doesn’t always mean a higher arose within a relatively short span of precise feedback to the consumer. its products. survey which examines the brand opportunities and higher in- position. There are cases in which the position time. awareness and image of Nestlé come. remains, but the role is enriched. For the sake The Service keeps detailed statistics and its competitors. It facilitates of example, let’s look at a case when there’s a “Of course the discussions are guarded by on all the incoming requests. We are 8.3. Consumer Satisfac- analysis of the effi ciency of the Our main principle is for us to pro- change in position as well. serious confi dentiality. I can’t even say anything precisely aware of and monitor the given year’s communication and vide every one of our employees Now, if you’d like the person in question to work about the participants by name. What we are requests, in particular the number tion Measurement target setting for the following with the necessary opportunity and out in his or her new position, then the basis proud of is that in most cases we succeeded and subjects of the complaints, the year. We have been conducting support to foster the development of for the promotion shouldn’t be the success in setting development in motion and fostering number of resolved complaints and Nestlé conducts numerous consumer the survey since 2002. their abilities, all this in a secure and achieved in the original position, but some level awareness in terms of career development. the methods of resolutions. satisfaction tests in Hungary as well. fair workplace where workers are in- of maturation in respect of the next position. In more than one instance, in case someone iden- – Monthly reports are prepared volved in the life of the company, and If that’s what you choose, then it’s true that tifi ed more closely with another area in which In 2009, 31 095 requests were received pertaining to all product groups where respect is shown for equal it involves extra work for the manager, as fi rst his or her skills could be better utilized, this was by Nestlé’s Consumer Service. The vast on the number of consumer com- opportunity. you have to help identify the ambition and pay followed by an announcement in the company majority of these were queries, as plaints relative to the quantity of heed to what skills have to be tried out and newsletter. There were no glaring failures to well as requests for information regard- products sold. The cumulative In spite of the effects of the global proven in practice, as well as give extra tasks to speak of, but instances did occur in which for ing mainly contests, promotions, and economic crisis on Hungary, we match. So the manager plays an important role lack of opportunity or alternatives offered by products. A mere 257 were comp- provided our colleagues with training in maturation. the organizational unit, we did not succeed in laints; that represents a total of 0.8% and development in 2009 as well. This, however, is amply reciprocated by the dissolving someone’s frustration that they felt of all requests. In fact, in a few sites there was even a subordinates through enhanced motivation, about their non-effectiveness. Unfortunately, For 2010 our aim is to continue to substantial increase in the number of strategic participation, and intra-departmental there is no guarantee that Nestlé’s investments manage consumer requests at a high training hours. Our health and safety cooperation, which save time for the manager’s to date are not going to be utilized at another level. performance demonstrated continued strategic activities. At the same time, the other company.” improvement; the number of accidents subordinates also strive to be increasingly useful Barbara Verô, Nestlé Hungária In 2009, an independent fi rm con- decreased. Relations between em- members of the team. As to how this pays off Personal Development and Training Manager ducted a survey to compare the ployees, management, and trade for Nestlé, the answer is obvious, more inde- consumer services of food compa- unions are sound, and communication pendent and professionally developed projects nies. According to the result of the is constant. are launched, and the organization begins to survey: tap its internal reserves. This can be translated 9.2. Training – The performance rating of Nestlé into profi t. As a result, career development telephone Consumer Service is 9.1. Main Targets, means either real advancement or a move to Nestlé places great emphasis on the 94% (the average was 74%). another position on the same level, or possible principle of lifelong learning at both The fi rm examined whether the Projects, Results role-enhancement. The return – although it may international and local levels. Thus the operators answered the phone, not come immediately – is virtually assured for training and conferences (some of they also evaluated the tone of the Career Advising all three interest groups.” which are coordinated by the training response, helpfulness, the opera- Our career advising project was Barbara Verô, Nestlé Hungária centre in Switzerland) targeting special- tors’ creativity, and their handling prompted by the results of our organi- Personal Development and Training Manager ist skills as well as the training promot- of product complaints. zational culture development prog- ing the development of individual – The performance rating of Nestlé’s ramme. We took the self-fulfi llment of competencies are equally accessible for e-mail Consumer Service is 93% employees and the company’s need the employees of Nestlé Hungária Kft. (the average was 60%). Response for successors seriously and sought speed, the appearance and style the best ways for individual emplo- The areas to develop and the asso- of the messages, and the precision yees, managers, and Nestlé to profi t ciated action plans are established of their wording were evaluated. Zsófi a Egri from their development. jointly by the employees and their ma- Nestlé Hungária Sustainability and Our colleagues 32 Nestlé Hungária Sustainability and Our colleagues 33 Creating Shared Value Report 2009 Creating Shared Value Report 2009

nager at the annual coaching in the the design of the training plan as well in the COMEX programme in 2009. market for local employees, with the – Employer voluntary pension fund nagers depends on meeting the annual light of next year’s objectives and as for the longterm individual develop- Nestlé’s aim is to provide insight into addition of local applications. contribution targets. The targets are usually made the potential career steps. ment plan. the everyday reality of each area of Moreover, all Nestlé employees comp- – Retirement bonus up of three parts: group or corporate Nestlé believes that it is the employee activity, in order to enrich the students leted declaration “A” which concerns – School start benefi t level objectives, departmental objec- who has the greatest – 70% - respon- Internship opportunities and the with practical knowledge. In the frame- any existing employment or any other – Other employee benefi ts at par- tives and personal objectives. sibility for their development and that COMEX Programme work of the professional internship type of working relationship in addition ticipating partners (travel, clothing The proportion of these vary depen- the best way for them to gain experi- In 2009 we hired 23 career starters for nearly 20 students gained experience to the existing employment at Nestlé allowances) dent on jobs. Long-term incentives ence is through their daily work or various areas at Nestlé’s head offi ce. in the areas of marketing, supply Hungária Kft. In declaration “B” it shall encourage senior executives to by getting involved in new tasks and We developed our COMEX (Commer- chain, controlling, and technology. be stated, whether the employee wishes All Nestlé employees (either on a improve the company’s stock value. projects. Instruction and mentoring cial Executive Management Trainee) to have further employment or other fi xed-term or on a temporary basis, The amount of severance pay is support from the manager is next in recent graduate programme expressly Prevention of corruption type of working relationship (either free full or part-time) are entitled to the included in the Collective Agreement line. Formal training and education for them, during the course of which For prevention purposes in 2008, we of charge or remunerated) in addition same benefi ts. and depends on the length of service contribute 10% to individual develop- we train mainly marketing/sales orient- had the Code of Ethics and Business to the existing employment at Nestlé at the company. ment. This concept is the basis for ed professionals. 5 people took part Conduct published in the Hungarian Hungária Kft. At Nestlé Hungária Kft., practically all The amount of severance pay increases This is continuously monitored by the employees regularly receive a per- after fi ve years of employment. After company. There was no corruption formance evaluation, as well as an ten years it is double the amount pre- 2009 related event in 2009. overview of their career building and scribed by the Labour Code. Total number of training hours Training hours/ person individual development opportunities. The evaluation system for non-manual The performance of executive manage- Nestlé Hungária 26 659 20.3 9.3. Benefi ts employees is more complex than ment is evaluated on the basis of Head Offi ce and Purina Budapest 12 968 32.8 that of manual workers, however the the fulfi llment of bonus targets, which In addition to their competitive sala- evaluation has an impact on the level include individual, department and Szerencs 4 566 12.2 ries, employees at Nestlé receive a of the salary increase in both cases. company level targets, as well as non-manual 2 506 32.5 wide range of benefi ts: business strategy aims. This encom- – 13th month salary Managers passes financial, social and environ- manual 2 060 6.9 – Flexible working hours The Nestlé Management and Leader- mental targets that are dependent Diósgyôr 2 750 13.0 – Cafeteria system ship Principles detail the company’s mainly on the position and activity in non-manual 221 7.9 – Voluntary pension fund expectations of its senior managers. question. – Infant formula gift pack for the manual 2 529 13.8 employees’ babies An incentive scheme ensures the con- Bük 6 375 19.3 – Christmas and Easter presents for nection between the remuneration of the employees senior managers and the performance non-manual 1 636 22.1 – Supporting sporting activities of the organisation. There are two types manual 4 739 20.1 – Group life and accident insurance of incentives at Nestlé.

Figure 12: Number of training hours – Occupational health service Within the framework of short-term – Loyalty bonus incentives, the bonus received by ma-

Training types / Person Nestlé Hungária Head Offi ce and Purina Budapest Szerencs and Diósgyôr Bük Average starting salary Minimum wage Name of the premises Position Ratio (%) Compulsory education 1 930 656 944 330 in the position (thousand HUF) (thousand HUF)

Skill development 289 146 119 24 Head Offi ce Department assistant 162 71,5 227%

Professional training 1 759 112 1 610 37 Purina Budapest Management assistant 196 71,5 275%

Team building 442 366 41 35 Szerencs Operator 72 71,5 101%

English language course 89 59 24 6 Diósgyôr Operator 72 71,5 101%

Vocational training (with learning agreement) 10 9 1 0 Bük Packer 74 71,5 104%

Figure 13: Training types and the number of participants in 2009 Figure 14: Average starting salary compared with the local minimum wage at the more signifi cant premises of the organisation Nestlé Hungária Sustainability and Our colleagues 34 Nestlé Hungária Sustainability and Our colleagues 35 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Confl ict of interest Target 2006 2007 2008 2009 The Nestlé Code of Business Conducts Result 3000 Nestlé Hungária contains the requirements which are 2 682 mandatory for all Nestlé employees. 2500 2 386 number of accidents 17 11 13* 7 In addition therto, Declaration “A” or “B”, 2 040 detailed in the section on the preven- 2000 total number of non-productive day 473* 606* 621* 363 tion of (see page 32) corruption topic 1500 non-productive days as a % of the working hours 0.14%* 0.18%* 0.18%* 0.11% is completed by all employees. 1 248 1000 Head Offi ce and Purina Budapest 9.4. Health and Safety 500 number of accidents 2 2 2* 1 0 total number of non-productive day 30 7 60* 47 The Nestlé Occupational Health and non-productive days as a % of the working hours 0.03% 0.01% 0.06%* 0.05% Safety Management System supports Szerencs+Diósgyôr Bük our work culture, which is committed Figure 15: The number of safety talks by plant in 2009 Szerencs and Diósgyôr to the “zero accident” policy. In 2009, number of accidents 9796 we obtained certifi cation for the Safety Talks accidents occurred of which 6 involved OHSAS 18001 occupational health The behaviour-based work safety downtime. By 2009, this fi gure dropped total number of non-productive day 252 186 286 316 and safety management system. programme - the system of so-called to 2 reportable accidents, and for the non-productive days as a % of the working hours 0.17% 0.13% 0.19%* 0.21% safety talks - which contributed fi rst time in the history of the plant, in Compliance with the Rules greatly to the reduction in the number 2009, no accident happened involving Bük Our independent audit programme of accidents, will continue in all Nestlé downtime. From 2008 to 2009, the number of accidents 6220 CARE also controls compliance with production units (detailed description number of accidents in the plants occupational health and safety rules of the Safety Talks programme on in Szerencs and Diósgyôr involving total number of non-productive day 109 331 193 0 as set forth in our business principles page 38 of our 2008 annual report). downtime decreased by half. non-productive days as a % of the working hours 0.15% 0.45%* 0.22%* 0% and prescribed by Hungarian law. An example worth mentioning is the Figure 16: Number of accidents causing loss of working hours between 2006 and 2008 CARE operates in the areas of human improvement of results for the plant in As people are our greatest value, we re- *In these cells erroneous data was published in the 2008 report due to a calculation error. Here the correct data is listed. resources, occupational health and Bük, as in 2006 10 reportable main committed to safety. We are aware safety, and business ethics and the of the fact that the majority (nearly 90%) Nestlé Hungária Kft. communicates to No case occurred in 2009 that caused environment. Under its auspices, of accidents stem from dangerous the employees and the employee rep- potential violation to the right of as- three different independent third-party behaviour; that is why we attach im- resentations any operational changes sociation and to the collective agree- certifi cation bodies monitor compliance. portance to sustained operation of the and measures that have signifi cant ment. Nestlé continuously informs the programme and continuous develop- impacts on the employees in a man- employees about questions that affect Based on Act 93 of 1993 on Labour ment thereof. ner and within the time limits specifi ed a larger group of the workers. Safety and its amendment, as well as in the Labour Code of Hungary. Act 161 of 2007, health and safety Accidents (The deadlines and rules of procedures Works Council offi cers were elected in the plants (jointly There was no accident causing death are different for each case.) There is a Works Council at Nestlé in Szerencs and Diósgyôr, separately or permanent injury in 2009. There is Hungária Kft (Central Works Council in Bük). There were 9 work safety no data on accidents at work requir- In addition, the collective agreement in the head offi ce, Local Works Coun- representatives in Szerencs, 5 in Diós- ing fi rst aid measures. of the company also includes spe- cil in the factories), which operates gyôr, and 4 in Bük (there were no cifi c rules for the case of reorganisa- in the manner and under the condi- work safety representatives in the 9.5. Employee Dialogue tion. According to this, if the measure tions specifi ed in the Labour Code of head offi ce or in Purina Budapest). taken affects the number of employ- Hungary. In accordance with the pro- Trade union ment relationships set forth in the cedure that developed, the manage- The work safety representatives hold At Nestlé, according to the Labour Labour Code, Nestlé is obliged to ment of the company holds a formal meetings on the fi rst Monday of every Code of Hungary, all employees, with take certain measures and request presentation for the Works Council on month with managers regarding work the exception of the managing direc- the opinion of the Works Council and two occasions a year, also offering a safety and environmental issues of tor, fall within the scope of the Collec- Trade Union Committee regarding venue for formulating opinions. As nu- current importance. tive Agreement. the draft measure. merous questions and subjects to be Nestlé Hungária Sustainability and Our colleagues 36 Nestlé Hungária Sustainability and Our colleagues 37 Creating Shared Value Report 2009 Creating Shared Value Report 2009

resolved arise in addition to the formal offi ce to ensure that we have suffi cient Proportion of Local Employees presentation, consultation in e-mails information regarding women return- Employees are considered local if and in person between the representa- ing to work in the eventuality that their they live in the city or town of the 100% tives of the employees and the senior former colleagues no longer work at given site or in the given county. >50 management are rather active. the company. If a job opening arises, Mancom employees not transferred 80% Approximately 60% of the represen- the fi rst step we take is to check and by the Nestlé Centre are considered 30–50 60% tatives of the Works Council are also see if there are any candidates with local. <30 members of the Confectionery Workers’. relevant experience among women 40% returning to work after maternity leave. Employment of people with dis- We have a cooperation agreement For women going on maternity leave, abilities in the factory in Diósgyôr 20% with the Central Works Council, which we assess the anticipated date of The separate employer Prima-Soft 0% contains more benefi cial terms than their return and determine whether has been cooperating with the Diós- those specifi ed in the Labour Code of they are interested in alternative solu- gyôr factory of Nestlé since the spring 2007 2008 2009 Hungary. tions such as telecommuting. of 2007. (It has rented premises Figure 19: Distribution of employees at the Head Offi ce and Purina Budapest by age

Other ways of employee dialogue Besides continuous communication Local proportion (%) with the union, one information meet- 100% women ing per year serve the involvement 2008 2009 80% of colleagues in addition to personal Mancom 73 67 men dialogues with them. In addition the Head Offi ce and Purina Budapest 64 64 60% intranet sites and the monthly published newsletter provides written information Szerencs and Diósgyôr employees 99 99 40% for colleagues. Bük employees 92 91 20%

Figure 17: Proportion of local employees in senior management 9.6. Equal Opportunity 0% In terms of equal opportunity and hu- 2007 2008 2009 man rights issues, the operation of Figure 20: Distribution of employees at the Head Offi ce and Purina Budapest by gender Nestlé is governed by the document entitled Corporate Business Principles 100% and the Human Resources Policy. >50 80% 100% 30–50 >50 Nestlé is launching several initiatives 60% worldwide to bring about equal treat- 80% <30 30–50 ment of and career opportunities for 40% 60% employees. As such, we are devoting <30 special attention among others to the 20% 40% conditions of women, for example to 0% the process of reintegrating women into 20% the labour force after maternity leave. 2007 2008 2009 0% Figure 18: Distribution of the management committee by age (Mancom) Women with Children 2007 2008 2009 At Nestlé, the proportion of women In 2007-2008 all managers were men; in 2009 there was one female member of Figure 21: Distribution of employees of Szerencs and Diósgyôr by age with children is relatively high. Conse- management. quently, we have begun to deal system- atically with this group. We developed a registry system in the Budapest Nestlé Hungária Sustainability and Our colleagues 38 Nestlé Hungária Sustainability and Our colleagues 39 Creating Shared Value Report 2009 Creating Shared Value Report 2009

100% 140% 132 women Nestlé Hungária 120% 113 117 80% 118 107 111 Head Offi ce men 100% 99 99 98 and Purina Budapest 60% 80% 80 78 Szerencs and Diósgyôr 40% 60% Bük 53 40% 20% 20% 0% 0%

2007 2008 2009 20072008 2008 Figure 22: Distribution of employees of Szerencs and Diósgyôr by gender Figure 25: Basic salary of men and women employees compared

100% 180% >50 161 162 Szerencs and Diósgyôr 80% 160% 144 Bük 30–50 140% 60% 120% 119 <30 103 103 40% 100% 80% 20% 60% 0% 40% 2007 2008 2009 20072008 2008 Figure 23: Distribution of employees of Bük by age Figure 26: Basic salary of men and women of the management of the factories compared

within the factory.) The company is an Nestlé has regrouped the manual 100% women employer of disabled people. Approxi- packaging tasks for them, for which 80% mately 60-80 persons are employed previously they used contingent men at the premises of Nestlé, who usually labour force. In 2009, there was no 60% work in two shifts dependent on work case of discrimination at Nestlé requirements. Hungária Kft. 40%

20%

0%

2007 2008 2009 Figure 24: Distribution of employees of Bük by gender Nestlé Hungária Sustainability and Our colleagues 40 Nestlé Hungária Sustainability and Our colleagues 41 Creating Shared Value Report 2009 Creating Shared Value Report 2009

9.7. Employment Data Fluctuation

2006 2007 2008 2009 250 Total employees 1 323 1 329 1 345 1 308 Nestlé Hungária 200 196 Head Offi ce Head Offi ce and Purina Budapest 394 402 407 399 179 181 188 Purina Budapest Szerencs and Diósgyôr 638 632 596 586 150 Szerencs and Diósgyôr non-manual 104 101 97 105 Bük 100 71 70 68 68 64 manual 534 531 499 481 58 62 50 49 33 63 52 40 Bük 291 295 342 323 19 11 14 9 0 non-manual 63 67 71 82 20062007 2008 2009 manual 228 228 271 241 Figure 28: The number of those leaving the organisation between 2006 and 2009 Full-time 1 308 1 325 1335 1 297

Head Offi ce and Purina Budapest 379 398 398 389

Szerencs and Diósgyôr 638 632 595 585

Bük 291 295 342 323 25% 23 23 22 Nestlé Hungária Part-time 15 4 10 11 20% 19 21 18 Head Offi ce 17 17 Head Offi ce and Purina Budapest 15 4 9 10 15 Purina Budapest 15% 15 14 14 15 14 Szerencs and Diósgyôr 11 11 12 Szerencs and Diósgyôr 0011 11 11 10% Bük 10 Bük 0000 5% Fixed-term contract 71 40 37 29

Head Offi ce and Purina Budapest 20 12 11 7 0%

Szerencs and Diósgyôr 0000 20062007 2008 2009 Figure 29: Fluctuations between 2006-2009 Bük 51 28 26 22

Open ended contract 1 252 1 289 1 308 1 279

Head Offi ce and Purina Budapest 374 390 396 392

Szerencs and Diósgyôr 638 632 596 586 >50 Bük 240 267 316 301 100% 30–50 Hired and agency contract 382 128 116 110 80% <30 Head Offi ce and Purina Budapest 1 6 10 7 60% Szerencs and Diósgyôr 377 112 98 101 40% Bük 4108 2 20% Figure 27: Total workforce by employment types, work contract and regions (person) 0%

2007 2008 2009 Figure 30: Distribution of leavers by age Nestlé Hungária Sustainability and Our colleagues 42 Nestlé Hungária Sustainability and Suppliers and Raw Materials 43 Creating Shared Value Report 2009 Creating Shared Value Report 2009

10. Suppliers and Raw Materials

Job Fairs The procurement materials supplied determines how dit list is drawn up on the basis of In 2009, Nestlé took part in the HVG often the partners must be inspected feedbacks as well as of the degree of 100% Job Fair, the Technical University policy of Nestlé in Hungary (for example, suppliers of highly dan- danger the supplied products pose. women Job Fair, the Fair at the University of is governed by the local gerous products must be audited in In 2009, Nestlé carried out 25 sup- 80% Miskolc, and on two occasions the every three years). plier audits in Hungary (in the Food men application of the Code 60% CareerExpo event organized by Corvi- business line). nus University. The CEMS (Community of Business Conduct In most cases, the audit is carried 40% of European Management Schools) of the Nestlé Group, out by Nestlé instead of being out- Manufacturers international job fair held in autumn, sourced to third parties; besides, it Contract manufacturers are expected 20% hosted in 2009 in Budapest, was of as well as Nestlé’s Corpo- occurs quite often that a Hungarian to comply with the same requirements particular importance, and the team in supplier of a foreign Nestlé company applied at Nestlé’s own plants (food 0% rate Business Principles. charge of selection at Nestlé’s head- is also audited by local Nestlé experts. safety, quality, work safety, environ- 2007 2008 2009 quarters in Switzerland also attended. Accordingly, identical conditions Another part of supplier assessment ment, honest practices, labour emp- Figure 31: Distribution of leavers by gender apply to the suppliers. The data in is the questionnaire sent by the loyment policy). Compliance is verifi ed fi gure 32 demonstrate clearly that our purchase department to factories, in the course of approval audits. local business partners also meet the on which it is possible to give a Local supplier is a company, which Marcell Jeles requirements and do well amongst feedback on the partner’s business has premises in Hungary and employs the competition. The main criteria for activity or reliability. The annual au- a Hungarian labour force. selecting suppliers are quality, reliabi- lity and price. The selection of the suppliers is governed by NIMS (Nestlé Integrated Management System). 90% Based on the number 85% of companies Responsible procurement 80% Based on acquisition Nestlé pays more and more attention to the improvement of the environ- 75% value mental and social performance not 70% only its own offi ces and factories but also in case of its suppliers. For this, 60% in July 2008 a new Supplier Code was 65% introduced (www.nestle.com/suppliers). The code is valid for all suppliers, 20062007 2008 2009 compliance with it is monitored through Figure 32: The proportion of local suppliers between 2006 and 2009 self-inspection of the suppliers and audits carried out by third parties.

Supplier audit Before a raw material or packaging supplier, a contract manufacturer or a contract packer enters into any business relationship with Nestlé, they must undergo an audit process. The outcome of this process will determine whether or not the given company may work for Nestlé in the future. On the other hand, supplier audit does not only concern new

partners. The degree of danger of the Szabolcs Krajnyák Nestlé Hungária Sustainability and Suppliers and Raw Materials 44 Nestlé Hungária Sustainability and Suppliers and Raw Materials 45 Creating Shared Value Report 2009 Creating Shared Value Report 2009

and cocoa by 2020. This builds on Volcafé in Guatemala: Nestlé Nespresso SA: – to source 80% of its coffee from collaboration with the Rainforest Alli- International outlook: the CHF 200 million invested in coffee Nestlé has invested US$ 290 000 in a Ecolaboration™ its AAA Sustainable Quality™ ance. In 2009, almost 50% of the total coffee, cocoa és palmoil over the past 15 years. sustainable coffee project with Volcafé, Ecolaboration™, launched in June Program and Rainforest Alliance green coffee beans Nespresso pur- Our strategy is now being communi- set up in 2004 in Guatemala. This has 2009, is the Nespresso platform for Certifi ed™ farms; chased came from its AAA Sustainable Coffee cated in a consolidated, strategic way brought many benefi ts, including fi l- sustainable innovation, and our latest – to put systems in place to triple its Quality™ Program. The coffee supply chain is extremely to consumers through a new sustain- ters for safe drinking water, the build- example of Creating Shared Value capacity to recycle used capsules complex, with 80% of farmers operat- ability website (www.nescafe.com/ ing of two classrooms, wood-burning throughout the value chain. Through to 75%; Further information (among others ing as smallholders. Around 25 million sustainability). stoves with chimneys (to reduce the Ecolaboration™, Nespresso has – to reduce the carbon footprint about the role of consumers in the pro- smallholders depend directly on cof- incidence of burns and lung disease, consolidated all its sustainability efforts required to produce a cup of gramme, in English for the time being): fee farming for their livelihoods, and a Sustainable coffee platforms with about 60% less wood used), the in coffee sourcing, capsule recycling Nespresso by 20%. www.nespresso.com/ecolaboration further 100 million people are involved Nestlé is a co-founder of two inter- control of soil erosion and technical and energy-effi cient machines into one in the industry as a whole. national sustainable coffee platforms assistance by an agronomist from concerted programme, and committed Nespresso launched the AAA Sustain- In 2009, Nestlé purchased 780 000 to coordinate non-competitive, multi- Volcafé’s local subsidiary to improve itself to meet three targets by 2013: able Quality Programme in 2003, in tonnes of green coffee, from 25 mar- stakeholder action: farming practices. kets. More than 93 700 tonnes was – Through the Coffee Working procured directly from farmers and Group of the Sustainable Agricul- small-scale intermediaries in Vietnam, ture Initiative of the Food Industry Thailand, China, Indonesia, the Philip- (SAI-Platform), Nestlé has been in- pines, Côte d’Ivoire and Mexico; this volved in three sustainable coffee represents an increase of 9% from pilot projects. 2008, and makes us the world’s lar- – As one of the founding members gest direct purchaser. of The Common Code for the We currently purchase 10% of the Coffee Community (4C) Associa- coffee beans used in Nescafé through tion, we follow a voluntary code direct procurement, but through a of conduct to improve effi ciency, greater focus on direct procurement, profi tability, transparency and Agriculture and rural development Environmental sustainability Products and consumers we will double this by 2015 (approxi- sustainability in the production, In Guatemala, representatives Consumers can bring their used Award-winning CitiZ range has mately 160 000 tonnes a year). processing and trading of coffee of the Rainforest Alliance and capsules back to the store, and eco-timers and stand-by switches through training and verifi cation. Nespresso assess the quality of the Nespresso will ensure that they are on all machines Our approach Nestlé is also involved with other sig- coffee crop. recycled (soon in Hungary too). Our direct buying system allows tens nifi cant sustainable coffee verifi cation of thousands of farmers and interme- and certifi cation schemes, such as Value to society: Value to society: Value to society: diaries to deliver coffee directly to our Fairtrade, UTZ Certifi ed and Rainfor- – Improved farm management – Reduced impact of bauxite – Signifi cant reduction in carbon buying stations, giving them a higher est Alliance. through tools, training and technical extraction and aluminium footprint price and access to free technical as- know-how supplied to farmers production – Saving in electricity consumption sistance. This helps them to improve SAI-Platform projects - example – Quality and biodiversity fostered – Supporting and contributing to the quality of their yields and to diver- NKG in Vietnam: Since 2005, Nestlé on coffee farms sustainable use of aluminium sify their activities, giving them higher has been helping to improve agricul- – Highest-quality coffee for – Less waste Value to Nespresso: incomes and helping Nestlé to secure tural practices and raise awareness consumers – Better recycling and reuse of used – Signifi cant reduction in carbon a sustainable supply. Over the last about sustainable coffee production – Higher incomes and living capsules footprint 10 years, Nestlé has supported the in Vietnam. In particular, water use for standards training of 100 000 cocoa and cof- irrigation was halved, the use of ferti- Value to Nespresso: fee farmers, and aims to support the lisers reduced, and both the quality of Value to Nespresso: – Better management of valuable training of a further 130 000 farmers the coffee and the accurate measure- – Secure supply of premium-grade raw materials over the next 10. ment of production costs improved. coffee – Club Members even more Nestlé will also invest a minimum of – Motivated, empowered farmers engaged with their brand CHF 460 million in its plant science and sustainability initiatives for coffee Alexander Jeles Figure 33: Nespresso – Creating Shared Value through the value chain Nestlé Hungária Sustainability and Suppliers and Raw Materials 46 Nestlé Hungária Sustainability and Suppliers and Raw Materials 47 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Cocoa Côte d’Ivoire, and the world’s largest we aim to reduce the complexity • support industry-wide organisa- Palm oil Cocoa, the main ingredient of choco- fi ne cocoa origins, Ecuador and Ven- of the supply chain, improve re- tions such as The Sustainable Palm oil is not a major raw ingredient late, is grown in small, family-run ezuela – covers the following aspects: turns to farmers and improve the Tree Crops Programme, which for us – Nestlé uses 320 000 metric farms often in remote locations. Cocoa – Overall investment: Nestlé in- quality of cocoa for Nestlé. has increased income by over tonnes of the world’s global produc- farming provides an income to more tends to invest CHF 110 million on – Better social conditions: 20% for nearly 80 000 West tion of 42 million metric tonnes (0,7%) than 4.5 million farmers, a third of cocoa creating shared value initia- Cocoa farming is the major em- African families through farmer – but we share the concern about the whom live in West Africa. However, tives over the next decade, almost ployer, the main source of income training. serious environmental threat to rain- cocoa supply is becoming increasingly twice as much as was spent over and the focus of activity for millions forests and peat fi elds in South East critical. Low prices have caused a the past 15 years (CHF 60 million). of people. But many cocoa com- Asia caused by the planting of palm lack of investment in the sector, – Helping farmers: We are train- munities do not enjoy clean water oil plantations, and remain keen to resulting in declining cocoa quality, ing farmers in Ecuador and Côte or access to education, and as a participate in effective multi-stake- worldwide supply defi cits and small d’Ivoire to help them to increase result, labour practices on cocoa holder solutions to this. farms with ageing trees that are yields, reduce disease, respect Napsugár Jancsurák farms are not always what they To date actions taken in this issue are vulnerable to disease. the environment and produce a should be. We will work to improve as follows (as of May 2010): better-quality crop which attracts has provided 17 million coffee and access to education, water and – We joined a coalition which is call- Nestlé is striving to extend its initia- higher prices. cocoa tree plantlets to producer sanitation. As a founding participant ing for a moratorium on rain forest tives and supported projects to date – Plant expertise: As part of a countries, and over the next dec- in the International Cocoa Initiative destruction stemming from palm in its supplier chain. The sum of these wider remit, our new R&D Centre ade, we will provide at least (ICI), set up specifi cally to eradicate oil production in Indonesia. efforts is referred to as the “Cocoa in Abidjan, Côte d’Ivoire will pro- 38 million more. These develop into the worst forms of child labour, – We became active members of Plan”. www.thecocoaplan.com vide farmers with 1 million high- high-yield, disease-tolerant trees Nestlé and other industry players the Round Table on Sustainable potential cocoa trees each year providing farmers with a founda- are improving access to education Palm Oil (RSPO). The Cocoa Plan from 2012. The Centre’s prog- tion for increased farm productiv- and addressing all forms of exploi- – We suspended our purchases Our vision is to help to professionalise rammes will focus on improving ity and potential income. Although tation of children, forced labour from a supplier who admitted to cocoa farming, so that cocoa farmers the quality and quantity of locally results vary, studies show Nestlé- and its underlying causes. We are deforestation oversights. We made run profi table farms, respect the en- sourced raw materials, develop- produced trees can achieve an partnering with the International it clear to our suppliers that we vironment, have a good quality of life ing products that meet the nutri- increase in productivity of 50%– Federation of The Red Cross/Red do not tolerate oil derived from and their children benefi t from educa- tional needs and tastes of West 200%. The protection and propa- Crescent to fund a clean water and non-sustainable sources in con- tion. The Cocoa Plan is Nestlé’s way African consumers, and helping to gation of superior “fi ne cocoa” sanitation project in schools in the signments purchased by us. of helping to tackle key issues fac- increase both agricultural produc- varieties for use in our premium Gagnoa region of Côte d’Ivoire. – We made a pledge that by 2015, ing cocoa farmers, their families and tivity and food safety. We are also chocolate brands is also ongoing – Working with partners: In addi- all of the palm oil procured by us communities to create a better future training plant scientists in accele- in Ecuador and Venezuela. tion to supporting the ICI, we: is going to derive from sources for cocoa farming. rated propagation techniques in – The supply chain: By working • co-founded The World Cocoa that are certifi ed as sustainable. The Cocoa Plan – already active in other cocoa-producing countries. closely with farming cooperatives Foundation (WCF) to deal In this respect we have achieved the world’s largest cocoa origin, Over the past 15 years, Nestlé and paying a premium for quality, with issues such as ineffective rapid progress. In 2010, 18% of farming techniques and poor our purchases are expected to be environmental management. certifi ed, and by the end of 2011 By the end of 2010, some 340 000 that fi gure should reach 50%. children will have benefi ted from – We entered into a partnership with WCF-supported education prog- The Forest Trust, an organization rammes and 8800 teachers will which promotes the establishment have been trained; of responsible supply chains. • partner government organisations With their help, we are assessing such as the Centre National Ivoir- the performance of our suppliers ien de Recherche Agronomique in order to identify high risk to improve the sustainability of plantations, and providing tech- cocoa farming; nical assistance to support the • co-founded the UTZ Certifi ed implementation of sustainability Cocoa programme; standards. Nestlé Hungária Sustainability and Community Links 48 Nestlé Hungária Sustainability and Community Links 49 Creating Shared Value Report 2009 Creating Shared Value Report 2009

11. Community Links

Core activities of our community links: 11.1. Professional links – Hungarian Platform on Diet, Professional cooperation – Our Nutrikid programme aimed at Physical Activity and Health teaching children about nutrition Nestlé Hungária Kft is a member of (in Hungarian: TÉT Platform) Organisation Collaboration, joint project (page 24). the following professional and advo- – International Chamber of Com- Professional support for the Nestlé Lifestyle Centre and Nutrikid programme – The Nestlé Lifestyle Centre online cacy organisations: merce (ICC Hungary) Hungarian Dietetic Association (MDOSZ) portal where we strive to inform – Hungarian Pet Food – Hungarian Pharmaceutical Manu- Health screening (voluntary) of colleagues in the Head Offi ce consumers in an objective manner Association facturers Association, Formula National Institute for Food and Nutrition Science Continuous dialogue regarding the application of the food labelling system of the Confederation of the (page 25). – Association of Confectionery Section (OÉTI) food and drink industries of the EU (CIAA) on Nestlé products. – Our stakeholder dialogues which Manufacturers – Self-Regulating Advertising Body we held this year on the topics – Federation of Hungarian – Öko-Pannon We held presentations at professional conferences for teachers and school nurses regarding the National Institute for Health Development (OEFI) of healthy nutrition (page 15) and Food Industries – Hungarian National Food Technol- Nutrikid programme, on the topic of health developmentin schools. food safety (page 26). – Hungarian European Business ogy Platform Council (HEBC) – Hungarian Association of Food Chamber of Hungarian Health Professionals Cooperation with a workgroup of school nurses within the framework of the Nutrikid programme. (MESZK) We held presentations in the MESZK conference for school nurses on the topic of the Nutrikid programme. The area of community links also – Hungarian Brands Association Science and Technology encompasses communication with – National Human Resources – Club for Informed Consumers Dialogue regarding the offi cial and uniform translation of the guideline daily amount GDA and Hungarian Platform on Diet, harmonisation with the CIAA food labelling system; our consumers, which we detailed in Association (TFK) Physical Activity and Health on physical activity and educational programmes; dialogue with the government, NGOs and Chapter 8 (page 29). In this chapter – Swiss-Hungarian Chamber of (in Hungarian: TÉT Platform) professional communities we report on our additional profes- Commerce sional links and charitable activities. Cordi K+F Nonprofi t Zrt. Research and development: environmental protection and energy effi ciency increasing programmes

We gave a presentation on Nestlé’s operation and specifi cally on its social responsibility model. Central European University (CEU) The students were then given the task of developing proposals to develop this area. As a result, there was genuinely interactive communication based on involvement and dialogue.

Figure 34: Professional cooperation in 2009

We gave a presentation at the Nutrition of 40 are awarded this prize at the Kíra Nagy Marketing Conference at Kaposvár annual Scientifi c Meeting of the Hun- University. The audience was comp- garian Paediatrics Association and the rised mainly of university lecturers, Paediatric Gastroenterology Section government offi cials, nutrition experts, of the Hungarian Society of Gastroen- dieticians, and university students. terology, through which Nestlé sup- In addition, we gave a presentation ports the development of talented at the invitation of the Association young professionals. The prize is of Hungarian Nutritional Supplement awarded by the scientifi c committee Manufacturers on the fortifi cation of of the section. In 2009, Dr. Dorottya food using vitamins and minerals. Szakál-Nagy earned 1st place (sup- Nutritional supplement, pharmaceuti- port to attend annual congress of the cal, supervisory and licensing autho- European Society for Paediatric Gas- rity, and government experts were troenterology, Hepatology and Nutri- in attendance. tion; commemorative plaque).

The Henri Nestlé Award Nestlé founded the Henri Nestlé Award in Hungary in 2003, which since then has become a signifi cant professional recognition. The three best fi rst-time authors under the age Nestlé Hungária Sustainability and Community Links 50 Nestlé Hungária Sustainability and Community Links 51 Creating Shared Value Report 2009 Creating Shared Value Report 2009

“I am Dr. Dorottya Szakál-Nagy, fi rst year Ph.D. Second level: The company submits The Managing Director and the Cor- Voluntary Work at World Food Day Judit Gubinyi-Tunigoldné and Böbe Hoffmann we can give hope to desperate fami- student at Children's Clinic No. 1 (Budapest, its opinion to or contacts the per- porate Affairs Manager are active par- We encouraged all employees to raise were showered with praise by Dr. Irina lies in 2010 as well. The HUF 700 000 Semmelweis University). I graduated in 2009 sons/organizations referred to above ties to these dialogues. donations on the occasion of World Brandtné-Mányai who headed up the collection donation made available to the from Semmelweis’ Faculty of Medicine. Parallel through European professional asso- Food Day. A total of 13 employees of donations at the Tesco in Budaörs: Red Cross shall be utilized in 2010. to my studies, I began my scientifi c work in ciations (CIAA: food products, Cao- 11.2. Donations, Charity signed up for the gifts-in-kind prog- “As the store-level manager of Food Bank’s the laboratory of the children’s clinic under the bisco: confectionery, Fediaf: pet food ramme of the Hungarian Food Bank fundraising at the Tesco in Budaörs, I would Blood Donation supervision of Dr. Gábor Veres. As member of industry, IDACE: formula manufactu- Donations Association; each of these colleagues like to thank your colleagues Judit and Böbe We have regularly been organizing a student scientifi c association, I tried to gain rers, Euroglaces: ice-cream, Ceereal: The value of the donations made performed their duties on 16-17 Octo- for their effective participation in the collection voluntary blood donation at several a better understanding of the pathomecha- cereals, EVA: vending etc.). to NGOs in 2009 comes out to more ber in a Tesco hypermarket where of gifts, thanks to which the Budaörs team of our sites for years. The Nestlé unit nism of coeliac disease diagnosed in children, than HUF 81 million, mainly in the they enthusiastically collected dona- gathered the highest amount of donations! with the greatest tradition in this re- and typify claudins through intestinal biopsy Third level: In Hungary, Nestlé submits form of product donations (calculated tions. In two days, 38 tonnes of non- Let me thank you again for your participation spect is the plant in Szerencs, where of coelia patients. In collaboration with the its opinion and comments in connec- at cost price). This represents a 27% perishable food was gathered and in the fundraising efforts.” colleagues have had the opportunity University of Debrecen Medical and Health tion with the draft provisions to rep- increase over 2008, which is due pri- was distributed by the Food Bank to Judit’s response: to join the initiative for 20 years. Science Centre we examined the distribution resentatives of the Hungarian govern- marily to the company’s closer stra- those in need. “On behalf of both of us, thank you for your The plant in Bük launched its blood of haptoglobin polymorphism for concomitance ment, of the National Assembly, and tegic partnership with the Red Cross kind words. I can say without hesitation that donation campaign in 2003, which it of type 1 diabetes mellitus and coelia. It was the Hungarian representatives of the and the Hungarian Food Bank Asso- “I had some very touching moments which I am most people still generously help their fellow holds 4 times a year. Since 2004 col- my presentation on this which earned the Henri EP directly, or with the involvement ciation. very grateful for. I am especially happy to see human beings, especially when it comes to leagues at the head offi ce in Buda- Nestlé Award in 2009. Through this, I received of a lobbying agency, or through pro- that there are a number of people within Nestlé children. We had many wonderful moments, and pest have been granted the opportu- the opportunity to attend the most prestig- fessional associations (Federation World Food Day Donation Convoy as well who fi nd it important to facilitate the we are happy about the result we achieved.” nity to voluntarily donate blood. ious international scientifi c conference, the of Hungarian Food Industries, Asso- On 16 October, on the occasion of positive outcome of these efforts through their According to our calculations, to date 2010 conference of the European Society for c iation of the Hungarian Confectio- World Food Day, a caravan of 17 lorries attendance. I can only recommend that The Red Cross - Nestlé Fund we have assisted the work of the Paediatric Gastroenterology, Hepatology and nery Manufacturers, Hungarian Pet cut through Budapest. The convoy everybody volunteer at such events even if they The open-ended fund was set up by National Blood Supply Service, with Nutrition, where not only will I have the chance Food Association). In 2009 Nestlé, in was organized by Nestlé’s key partner are not able to contribute in any other way. Nestlé in 2008 to subsidize the medi- whom the plant in Bük works directly, to learn about the latest research projects and conjunction with FHFI and the Associa- in product donations the Hungarian Every little step is precious, as we also set an cal treatment costs of children and on more than 1 700 occasions. At the guidelines, but I will have the opportunity to tion of the Hungarian Confectionery example, and it only depends on us what this youth ages 0-18. other sites we organize the event meet physicians from other research groups Manufacturers, took an active role in example will be.” To ensure transparent distribution of jointly with the Hungarian Red Cross. and, last but not least, to explore Istanbul.” the following topics: nutritional value Bíró Ottília, Export Sales Specialist, the Charity Fund, a committee made labelling, the nutritional profi ling of Nestlé Hungária up of three people was formed, the Public Policy Standpoint, Partici- food, and upon the initiative of FHFI, members of whom are: offi cers of pation in Public Policy Formation the regulation of dishonest distributor Nestlé Hungária Kft. and of the Hun- and Lobbying Activities conduct. garian Red Cross, including a legal Nestlé engages in lobbying activity advisor from the Child Guardian’s in Hungary and in the European Union In addition to offering its views on draft Offi ce and a paediatrician. on three levels. provisions, Nestlé Hungária is a party The committee continuously evaluated First level: The offi ce of Nestlé’s to dialogue involving society and the the incoming applications and sup- centre in Brussels offers its views on economy. The venue and the instru- ported the individual applicants in the EU legislative drafts, and establishes ments for this are as follows: Nestlé amount of HUF 50 000-100 000. contact and consults with relevant Hungária is directly or indirectly 11 sick children and their families re- employees and offi cials of the EU a member of several chambers and ceived in-kind support from the Cha- Commission, or European Parliament business forums (e.g. Swisscham, rity Fund. Depending on the nature of representatives and their assistants. Hungarian European Business Coun- Food Bank Association and FAO (the their illness, the necessary medicine, It does so in certain cases with the cil, MGYOSZ etc.), which are active Food and Agriculture Organization of toiletries, clothes, and food were pur- involvement of a lobbying agency. opinion makers in questions regarding the United Nations) in order to raise chased for them. Nestlé does not support any political In 2009, the company actively took public and economic policy issues. awareness of the serious food supply In light of the initiative’s success and parties, politicians, or related institu- part in the issue of the so-called environ- The company is directly involved problems affl icting a large part of hu- societal importance, Nestlé has de- tions fi nancially or via contributions in mental labelling of food. in the wording and revision of recom- manity. Nestlé joined the convoy with cided to top up the depleted Charity kind. This is prohibited by the chapter mendations, reports, and proposals HUF 1.2 million (cost price) in product Fund with another donation, so that on Bribery and Corruption in Nestlé’s issued by these organizations. donations. Code of Business Conduct. Nestlé Hungária Sustainability and Environment 52 Nestlé Hungária Sustainability and Environment 53 Creating Shared Value Report 2009 Creating Shared Value Report 2009

12. Environment

Our ambition is to produce – by helping those in our supply 2007 2008 2009 We published the Nestlé Policy on chain, mainly through Nestlé’s Szerencs 60.88 52.92 53.24 tasty and nutritious food and Environmental Sustainability for the Sustainable Agriculture Initiative; beverages that also have fi rst time in 1991; in English: – by helping our consumers, Diósgyôr 270.19 281.62 225.82 the lowest environmental www.nestle.com/CSV/ through innovative solutions such Bük 46.18 47.31 49.19 EnvironmentalSustainability as Nespresso and Nescafé Dolce Figure 38: Indirect GHG emission – GHG protocol (kg CO2/t of product) footprint, so we strive This basic document lays down Gusto energy-saving machines, to to continuously improve our Nestlé’s environmental principles and achieve similar reductions. We removed the R22 coolant from the air conditioning equipment in the plant commitment. Our ultimate ambition is to offer in Bük, thus reducing the use of greenhouse gas HFC by 0.045 tonnes, that is, operational effi ciency and The company’s environmentally products with the lowest environmen- by 46%. environmental performance. friendly operation is governed, in addi- tal impact compared to alternative tion to its Environmental Policy, by the products including those made in the We apply a life cycle approach Nestlé Quality Management System home. 2007 2008 2009 to assess the impacts of our own (NQMS). In 2009 we obtained certifi - Szerencs 1.5 1.24 1.35 operations and those associated with cation in Nestlé Hungária’s plants and Diósgyôr 4.57 5.11 4.2 the wider value chain. Budapest offi ce for the ISO 14001 We continue to identify and imple- environmental management system. Bük 1.85 1.84 1.86 ment projects to reduce our use Figure 39: On-site energy consumption (GJ/t of product) of water, non-renewable energy and Climate change other natural resources, to reduce We are committed to reduce our 2007 2008 2009 emissions of greenhouse gases greenhouse gas emissions even fur- Szerencs 27 982 22 391 23 900 (GHGs), to eliminate waste and to ther: Diósgyôr 5 307 5 554 5 768 improve the environmental perform- – in our own directly controlled ance of our packaging. operations; Bük 190 721 188 749 159 615 Figure 40: Natural gas consumption in the factories (GJ)

2007 2008 2009 For now, no summarised data is available on the petrol and diesel consump- Total 12 567 12 157 10 618 tion of the organisation and on the natural gas consumption of the offi ces in Szerencs 1 570 1 256 1 341 Budapest. Diósgyôr 298 312 323 2007 2008 2009 Bük 10 699 10 589 8 954 Budapest NA NA 1 095 Figure 35: Direct GHG emission– GHG protocol (t CO2eg) Szerencs 20 631 17 972 16 804 2007 2008 2009 Diósgyôr 8 640 7 564 7 422 Szerencs 48.48 38.72 44.47 Bük 67 356 69 278 61 088 Diósgyôr 97.45 121.43 103.02 Figure 41: Electricity consumption (GJ) Bük 76.78 75.69 75.47

Figure 36: Direct GHG emission (kg CO2/t of product)

2007 2008 2009 Total 9 231 9 058 8 150 Szerencs 1 971 1 717 1 605 Diósgyôr 825 723 709 Bük 6 435 6 618 5 836

Figure 37: Indirect GHG emission (t CO2eq) Nestlé Hungária Sustainability and Environment 54 Nestlé Hungária Sustainability and Environment 55 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Water In our 2008 report, we covered the Water discharge 2006 2007 2008 2009 new technology used in our plant in Factories total Discharged into public sewer 194 328 154 326 129 682 89 278 Bük thanks to which the phosphorus untreated 113 793 75 978 45 063 38 847 content of wastewater decreased by 85%. This development of ours was treated 80 535 78 289 84 619 50 431 awarded special recognition in the Szerencs Discharged into public sewer, untreated 34 278 34 660 26 004 21 007 2009 Hungarian Innovation Foundation Diósgyôr Discharged into public sewer, untreated 11 894 11 936 10 041 7 764 competition. Bük Discharged into public sewer* 148 156 107 671 93 637 60 507 untreated* 67 621 29 382 9 018 10 076

Water withdrawal 2006 2007 2008 2009 treated* 80 535 78 289 84 619 50 431 Head Offi ce and Discharged into public sewer, Total 246 704* 232 091* 222 658 178 864 NA NA 1764 1884 Purina Budapest untreated Tap-water 192 785* 59 544* 20 074 15 010 Figure 45: Total water discharged by quality and receiver (m3) Head Offi ce and *In these rows erroneous data was published in the 2008 report. Here the correct data is listed. NA NA 1 764** 1 884*** Purina Budapest Szerencs 0 0 0 0 Diósgyôr 11 894 11 936 10 041 11 576

Bük 180 891 47 608 8 269 1 550 2006 2007 2008 2009 Subsurface water 53 919 172 488 202 584 163 854 Szerencs 1.09 1.00 0.96 0.70 Szerencs 34 278 34 660 26 004 22 062 Diósgyôr 3.25 2.70 2.71 2.48 Bük 19 641 137 828 176 580 141 792 Bük 1.04 0.77 0.67 0.51

Figure 42: Water withdrawal by sources (m3) Figure 46: Water consumption in the factories (m3/t of product)

*Does not include the water consumption of the Budapest offi ces. **Only the consumption of the site at Ybl Miklós Square. ***Estimated annual amount based on monthly consumption. Packaging Packaging reduces waste by protect- – reducing the weight and volume ing food products during transportation of packaging materials; 2006 2007 2008 2009 and storage, in the retail environment – leading in the development and Szerencs 1.20 1.07 0.8 0.73 and at home, and contrary to some use of packaging materials made Diósgyôr 4.19 3.93 4.01 3.69 preconceived ideas, it saves more from sustainably managed renew- than it costs, in both fi nancial and able resources such as bioplastics; Bük 1.40 1.33 1.32 1.21 environmental terms. Packaging is also – aligning with and supporting initia- Figure 43: Water consumption (m3/t or product) essential for food safety and fresh- tives to recycle or recover energy ness, and provides consumers with from used packaging, and helping Reused / recycled water M. e. 2006 2007 2008 2009 nutritional information and portion to inform consumers through Bük m3 0 10 800 13 200 5 200 guidance at the point of purchase. the use of accepted material iden- Bük % 0% 5% 6% 3% Packaging represents a small part of tifi cation and recycling symbols, the total environmental footprint of and by encouraging consumers Figure 44: Percentage and total volume of water recycled and reused food products, but Nestlé has adopt- to recycle where programmes are ed an integrated approach on pack- available; aging in its continuous improvement – using recycled materials wherever policy. This involves what we call a it makes sense. “4R” approach: Nóra Kanczler Nestlé Hungária Sustainability and Environment 56 Nestlé Hungária Sustainability and Environment 57 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Noise, odour and air Due to the odour fi lter investment ates with a 96% effi ciency and has a 2006 2007 2008 2009 On the production line in the Szerencs of previous years in Bük, no complaints maintenance cost of 100 000 EUR per Total 156 982 165 051 167 001 143 900 factory an air fi lter is in operation for were received in 2009 in this matter every fi ve years. Szerencs* 29 970 33 000 32 731 31 039 reducing dust emission. The factory from the inhabitants of the surround- also has a noise reduction system. ing area. The installed biofi lter oper- Raw materials 29 970 33 000 32 731 31 039 Diósgyôr* 2 835 2 854 2 334 2 211 Raw materials 2 835 2 854 2 334 2 211 limit 2006 2007 2008 2009 Bük 124 177 129 197 131 936 110 650 Szerencs 35 1.2 3.1 0.9 0.9 Raw materials 111 304 118 880 122 108 103 591 Diósgyôr 35 0.1 0.6 0.2 0.2 Packaging materials 12 873 10 317 9 828 7 059 Bük (energy production) 35 6.2 18.5 18.3 14.28

Figure 47: Quantity of materials used (t) Figure 49: Sulphur dioxide emissions (total sulphur dioxide equivalent, t) *There is no data for quantity of packaging materials.

limit 2006 2007 2008 2009 Szerencs 150 no data no data no data 0.887 90% of the paper used to make cor- Hazardous waste 2006 2007 2008 2009 Diósgyôr no data no data no data no data no data rugated outers and trays for products produced in the plant in Szerencs is Total 45.9 28.93 11.4 15.0 Bük (energy production) 5 0 0 0 0 recycled paper; the annual quantity in Szerencs 39 13 5.4 8 Bük (dry pet food production) 150 2.6 1.4 20 36 question is 10 million pieces. Diósgyôr 0 0 1 1 Bük (odour elimination of dry plant gases) 150 0 0 0 0 Bük 6.9 15.93 5 6 Figure 50: Dust emissions (mg/m3) Non-hazardous waste Total* 6 996.3 7 474 10 595.7 7 359 limit 2006 2007 2008 2009 Szerencs* 2 024 1 681 1 258 939 Szerencs 700 no data no data no data 74.5 Diósgyôr* 183 192 116 192 Diósgyôr 350 no data no data no data 55.4 Bük* 4 789.3 5 601 9 221.7 6 228 Bük (energy production) 350 224 229 213 235 Figure 48: Quantity of total waste (t) Bük (odour elimination of dry plant gases) 500 72 51 75 52 *In these rows erroneous data was published in the 2008 report. Here the correct data is listed. Figure 51: Nitrogen oxide emissions (mg/m3)

Fine In 2009, on one occasion our plant in canning plant with a “quieter” model tles for Theodora and Nestlé Aquarel. decreased by 24 tonnes. By means of Bük had to pay an environmental fi ne and equipped the autoclave vents and Outlook: In 2009, Nestlé Group’s As a result, in 2009 the amount of PET investment in technology, the quantity which the authority imposed for ex- labelling fans with sound insulation. Kékkúti Ásványvíz Zrt. further reduced plastic used decreased by approx. of plastic fi lm used to secure pallets ceeding the prescribed noise limit. In On account of the investment the plant’s the amount of packaging material 235 tonnes. for one particular product was low- response, the plant implemented noise noise emissions fell below the limit. used. From September 2009, the use of ered from 1 250 g to 280 g in such a reduction measures; we replaced the Since 2003, Kékkúti Zrt. has stead- other packaging materials (pallet way that the stability and appearance steam tunnel fan on the roof of the ily reduced the weight of its bottles fi lm, cardboard trays used on pallets, of the pallet did not suffer; in fact it while at the same time improving their and stretch fi lm used to hold pallets actually improved while the amount of Measures to remedy the sturdiness and stiffness. In April 2009, together) was also reduced. As a re- energy used was reduced. Procedure no. Site involved Law violated Amount of fi ne the company introduced lighter bot- sult, in 2009 the amount of fi lm used exposed defi ciency 1301-7/2/2009 Bük Exceeded noise limit Noise reduction measures 2 080 000

Figure 52: Environmental fi nes Nestlé Hungária Sustainability and Economic Performance 58 Nestlé Hungária Sustainability and Economic Performance 59 Creating Shared Value Report 2009 Creating Shared Value Report 2009

13. Economic Performance

In 2009 there was Nestlé Hungária Kft. Cereal Partners Hungária Kft. Total a decline in the performance 2007 2008 2009 2007 2008 2009 2007 2008 2009 of economically developed Income 86 604 643 91 565 835 86 999 068 2 756 910 3 149 265 3 031 191 89 361 553 94 715 100 90 030 259 regions. GDP for the Net sales revenue 83 882 373 85 938 080 81 632 736 2 735 849 3 057 336 3 007 281 86 618 222 88 995 416 84 640 017 Capitalised value and European Union as a whole 586 108 -581 484 -47 116 0 0 0 586 108 -581 484 -47 116 own performance dropped off by more than Other income 555 736 1 047 046 936 710 411 13 257 0 556 147 1 060 303 936 710 4% over the previous year. Income on fi nancial 1 580 426 5 162 193 4 476 738 20 650 78 672 23 910 1 601 076 5 240 865 4 500 648 The decline in the Hungarian operations economy was even greater, Operational 78 139 456 78 794 760 73 887 430 2 730 542 3 078 319 3 038 405 80 869 998 81 873 079 76 925 835 more than 6.3%. costs The number of those emp- Material costs 68 499 615 68 730 471 66 282 622 2 649 727 2 944 371 2 926 744 71 149 342 71 674 842 69 209 366 loyed dropped by 2.5%, Other costs 2 550 436 2 786 902 2 007 320 47 737 43 665 42 629 2 598 173 2 830 567 2 049 949 Expenditures of and the unemployment rate 7 089 405 7 277 387 5 597 488 33 078 90 283 69 032 7 122 483 7 367 670 5 666 520 fi nancial operations rose to 10.5%. The real Employee wages, value of wages - against an allowances and 7 135 399 7 970 007 8 096 779 0 0 959 7 135 399 7 970 007 8 097 738 infl ation rate of 4.2% - was their contributions

2.4% lower than in 2008. Payments to 000000000 Retail turnover decreased owners (Dividend) by 5.4%; consumer prices Direct taxation 868 272 1 260 128 1 047 496 39 300 42 274 43 838 907 572 1 302 402 1 091 334 of food products rose by Corporate taxation 0 45 059 74 187 0 1 195 0 0 46 254 74 187 4.4%. Other taxes 868 272 1 215 069 973 309 39 300 41 079 43 838 907 572 1 256 148 1 017 147

Community 5 767 64 003 81 339 2 805 0 0 8 572 64 003 81 339 In spite of the general economic investments crisis, which resulted in a change in the consumption behaviour, Nestlé Profi ts retained Hungária managed to increase its lo- (profi t reserve and 455 749 3 476 938 3 886 024 -15 736 28 672 -52 011 440 013 3 505 610 3 834 013 cal turnover and also succeeded in depreciation) strengthening market shares in the focus product categories. Continued Figure 53: Direct economic value generated and distributed (HUF K) effort has been and is being put on developing our local production facili- ties to be competitive in Hungary and in the region as well. Further focus is turning the portfolio into Nutrition, Health and Wellness. Nestlé Hungária Sustainability and Nestlé around the World in Numbers 60 Nestlé Hungária Sustainability and GRI-index 61 Creating Shared Value Report 2009 Creating Shared Value Report 2009

14. Nestlé around the World in Numbers 15. GRI-index

Nestlé is the world’s largest Reducing the Environmental Development of Employees Report Application Level: B Footprint 42% – The proportion of local citizens food company. The com- 59% - Water savings per tonne of in the Management Committees ope- 2002 C C+ B B+ A A+ pany’s headquarters are product since 2000. rating in developing countries. In Accordance 48% - Decrease in greenhouse gas 27% – The proportion of female located in Switzerland. emission per tonne of product since managers. Self 2000. 93 146 – The number of employees Declared Nestlé employs 278 000 people 12.2% – The proportion of energy receiving formal education in develop- Mandatory worldwide. derived from renewable sources at ing countries. Third Party The company has 449 plants, half of our sites. Checked them in developing countries. Research and Development Our products are sold and distributed Supporting Income Growth of 5 200 – The number of colleagues Optional GRI in 130 countries. Small Producers and Ensuring working in Nestlé research centres Checked Report Externally Assured Report Externally Assured Report Externally Assured In 2009, Nestlé fi nanced environmen- High Quality Raw Materials and product technology centres tal projects worldwide to a value in 165 553 – Number of small producers around the world. excess of 220 million CHF. and suppliers participating in capacity building programmes. Source of data in this chapter: Nestlé Creating Shared Value Report 2009 Healthier Products (link: http://www.nestle.com) 7 252 – Number of products inno- The following index contains the indi- The description of the indicators is vated on the basis of nutritional and cators, grouped by topics, based on available at: www.globalreporting.org. health criteria. the codes in the GRI G3 Guide. 71% – The proportion of products relative to total sales the nutritional Indicator Page/Comment composition of which complies with Strategy and Analysis the Nestlé Nutritional Foundation (NF). 1.1 2 1.2 2 Organizational Profi le 2.1 3 2.2 8 2.3 3 and 9 2.4 9 2.5 9 2.6 6 2.7 9 2.8 8, 40 and 59 2.9 6 2.10 10 Report parameters 3.1 3 3.2 Not relevant. Riport Profi le 3.3 3 3.4 3 Nestlé Hungária Sustainability and GRI-index 62 Nestlé Hungária Sustainability and GRI-index 63 Creating Shared Value Report 2009 Creating Shared Value Report 2009

Indicator Page/Comment Indicator Page/Comment 3.5 3 Environmental 3.6 3 Materials EN1 56 (partially) 3.7 3 EN3 53 Energy Report Scope and Boundary 3.8 3 EN4 53 3.9 3 EN8 54 Water 3.10 3 EN10 54 3.11 3 EN11 GRI Content Index 3.12 61 EN12 Not relevant. There are no habitats of rich biodiversity Assurance 3.13 3 Biodiversity EN13 in the direct neighbourhood of our premises. Governance, Commitments and Engagement EN14 4.1 9 EN15 4.2 9 EN16 52 Greenhouse gas emissions 4.3 Not relevant. EN18 53 4.4 35 EN20 57 4.5 33 EN21 55 Governance Emissions, Effl uents and Waste 4.6 33 EN22 56 (partially) 4.7 33 EN23 There was no signifi cant spillage in 2009. 4.8 11 Compliance with legislation EN28 57 4.9 12 Social 4.10 33 Labour Practices and Decent Work 4.11 26 LA1 40 Commitment to External Initiatives 4.12 11 Employment LA2 41 4.13 48 LA3 33 4.14 13 LA4 35 Labour/Management Relations 4.15 13 LA5 34 Stakeholder Engagement 4.16 13 LA6 34 4.17 13 LA7 35 Occupational Health and Safety Economic LA8 22 Economic Performance EC1 58 LA9 34 EC5 33 LA10 32 Market Presence EC6 53 Training and Education LA11 32 EC7 54 LA12 33 LA13 36 Diversity and Equal Opportunity LA14 39 Nestlé Hungária Sustainability and GRI-index 64 Creating Shared Value Report 2009

Indicator Page/Comment Human Rights Non-discrimation HR4 39 Kíra Nagy Emma Horváth Szabolcs Nagy Freedom of Association and Collective Bargaining HR5 35 Indigenous Rights HR9 Not relevant. Society Community SO1 24 (partially) SO2 32 Corruption SO4 33 SO5 50 Public Policy SO6 51

In 2009 there was no case of legal procedure Alexander Jeles Ádám Gyimesi Anti-competitive Behavior SO7 associated with anti-competitive conduct, or violation of anti-trust and anti-monopoly regulations. In 2009 there was no case of violation of any laws Compliance SO8 or legislation. Product Responsibility In 2009 there was no case of non-compliance with Customer Health and Safety PR2 regulations and voluntary codes concerning health and safety impacts of products and services. PR3 20 Product and Service Labelling PR4 21 Barbara Tôzsér PR5 30 Lara Ethell Eszter Polonkai PR6 29 In 2009 there was no case of non-compliance with Marketing Communication legislation or violation of voluntarily undertaken norms in the PR7 area of marketing communication, including Legal disclaimer Erzsébet Budai, Boglárka Fazekas, We would like to hear your opinions advertising, promotions and sponsorships. Text: Andrea Nagy, Krisztina Suhajda, István Kapus, Niklaas Baumgartner and suggestions! Katalin Ujhelyi and dr. Gábor Tompa. In 2009 there was no case of abuse of personal data Customer Privacy PR8 Publisher: Krisztina Suhajda of Consumers Compliance. Layout: Café Design The B&P CSR Management Strategy Contact In 2009 there was no case of non-compliance with Printing House: Conint-Print Kft. Consultancy company provided pro- Nestlé Hungária Kft. Compliance PR9 legislation or other regulations associated with care Paper: Cyclus Offset (100% recycled) fessional help in assembling the report. Lechner Ödön fasor 7, and use of the products. Budapest, H-1095 The manuscript is closed on We would like to say a special thanks [email protected] 1. September 2010. to the children and their relatives for www.nestle.hu We would like to thank the support of the active participation in the Creat- all Nestlé colleagues, who contributed ing Shared Value Drawing Contest, Nestlé Consumer Service to the completion of this report. due to which we can illustrate the re- 40/214-200 (food) Special thanks to the support from port with their nice drawings. 40/20-40-20 (pet food)