Nestlé in society

Creating Shared Value and meeting our commitments 2012 2012 performance summary

Nestlé has developed performance progress on the United Nations are to the applicable indicator indicators to provide a focus for Global Compact Principles. from the Global Reporting Initiative measuring and reporting Creating Unless stated otherwise, G3.1 guidelines. Shared Value, sustainability and performance indicators are for the compliance. The summary forms year ending 31 December 2012. Please see www.nestle.com/ part of our communication of The references in the GRI column csv/2012/kpis

Nestlé in society and Creating Shared Value Key Performance Indicator GRI 2011 2012

Economic Total Group sales (CHF million) EC1 83 642 92 186 Net profit (CHF million) EC1 9 487 10 611

Nutrition Nestlé Nutrition sales (CHF million) FP4 7 233 7 858 Products meeting or exceeding Nestlé Nutritional Foundation profiling criteria (as % of total sales) (a) FP4 74.1 75.7 Renovated products for nutrition or health considerations (b) FP7 5 066 6 692 Products with increase in nutritious ingredients or essential nutrients (b) FP7 3 851 4 691 Products with reduction of sodium, sugars, trans-fatty acids, total fat, calories or artificial colourings(b) FP6 1 215 3 317 Products analysed and improved or confirmed via 60/40+ programme (sales, CHF million)(c) PR1 28 715 31 720 Products containing Branded Active Benefits (sales, CHF million) FP7 5 563 6 455 Products featuring Nestlé Nutritional Compass labelling (% of sales worldwide) (d) PR3 98 96.8 Products in EU with Guideline Daily Amounts (GDA) labelling on front of pack (% of sales) (e) PR3 98.9 99.3 Products with specific portion guidance (sales, CHF million) (f) PR3 21 894 26 190 Popularly Positioned Product SKUs FP4 5 556 6 367 Popularly Positioned Products (sales, CHF million) FP4 10 610 11 960

Rural development and responsible sourcing Farmers trained through capacity-building programmes 200 751 273 808 Markets covered by Sustainable Agriculture Initiative Nestlé (SAIN) programmes 46 46 Direct procurement markets covered by SAIN programmes (%) 100 100 Percentage of suppliers, key vendors and quality key suppliers compliant with company’s FP1 96 89.5 sourcing policy Percentage of purchased volume compliant with the Nestlé Supplier Code FP1 75.2 80

Water Total water withdrawal (million m3) EN8 143 138 Total water withdrawal (m3 per tonne of product) EN8 3.17 2.89

Environmental sustainability Production volume Total production volume (million tonnes) 45.2 47.7 Materials Raw materials used (million tonnes) EN1 22.9 22.5 Materials for packaging purposes (million tonnes) EN1 4.58 4.77 Packaging source optimisation (kilotonnes saved) 39.3 47.1 Energy Total on-site energy consumption (petajoules) 90.1 90.7 Total on-site energy consumption (gigajoules per tonne of product) 1.99 1.90 Total on-site energy consumption from renewable sources (% total) (g) EN3 11.6 12.2 Total direct energy consumption (petajoules) EN3 64.3 63.7 Total direct energy consumption from renewable sources (% total direct) (h) EN3 9.3 Total indirect energy consumption (petajoules) EN4 70.1 73.5 Biodiversity Total size of manufacturing sites located in protected areas (hectares) (i) EN11 44.2 42.1 Nestlé in society and Creating Shared Value Key Performance Indicator GRI 2011 2012

Emissions, effluents and waste (j) Direct GHG emissions (million tonnes CO2eq) EN16 3.81 3.71 (j) Direct GHG emissions (kg CO2eq per tonne of product) EN16 84.2 77.7 (j) Indirect GHG emissions (million tonnes CO2) EN16 3.23 3.39 (j) Indirect GHG emissions (kg CO2 per tonne of product) EN16 71.5 71.1 Total water discharge (million m3) EN21 94 84 Total water discharge (m3 per tonne of product) EN21 2.08 1.77 Quality of water discharged (average mg COD/l) EN21 69 94 By-products (kg per tonne of product) EN22 31.3 29.9 Waste for disposal (kg per tonne of product) EN22 7.6 6.6 Environmental sustainability governance Manufacturing sites certified against ISO 14001 (% of total manufacturing sites) 90 89

Human rights and compliance Nestlé television advertising to children under 12 in compliance with policies on responsible marketing (%) (k) PR7 99.1 98 Nestlé contraventions of infant formula marketing policy requiring remediation (l) PR7 19 22 Infant formula marketing staff in higher-risk countries trained in the WHO Code (% of staff) (m) PR6 100 100 Total number of significant product recalls or incidents of non-compliance PR2 10 11

Our people Total workforce (number of employees) (n) LA1 327 537 339 397 Total rate of new employee hires (%) (o) LA2 12.01 11.8 Total rate of employee turnover (%) (o) 10.8 10.3 CARE gaps identified related to Business Integrity and HR 57 45 Of which: Minor 49 40 Major 8 5 Critical 0 0 Lost-time injuries and illnesses among employees and on-site contractors (per million hours worked) LA7 1.8 1.9 Total recordable injuries and illnesses among employees and on-site contractors (per million hours worked) LA7 3.8 3.6 Fatalities of employees and on-site contractors LA7 18 5 Average hours of training per year per employee per category (p) LA10 2.02 10 Leadership positions held by women (%) (o) LA13 28 29.2 Local Management Committee members native to country in developing countries (%) (n) EC7 53 49.5

(a) 2012 assessment scope: 73.5% total (f) Products sold as single servings and protected areas. The area therefore of the WHO Code apply as a minimum Nestlé sales volume. meeting/exceeding Nestlé Nutritional reduced from 2011. requirement. (b) Based on reports of approximately Foundation OR sold with/via a device or (j) The implementation of a new reporting (m) “Higher-risk” countries are those with 75% of worldwide product development equipment delivering a serving meeting/ system with updated emissions factors mortality rates for under-fives of more teams. Products can have “less of” one exceeding Nestlé Nutritional Foundation had minimal impact on direct emissions than ten per 1000 under-five, or more ingredient and “more of” another at the OR sold to caregivers with detailed reporting, but absolute and relative than 2% acute malnutrition (moderate same time. instructions on adjusting servings to indirect emissions increased by +1.2% and severe wasting) among under-fives. (c) This KPI reflects the dynamic nature of evolving nutritional needs. This currently and +1.4% (respectively) from 2011. All other countries are “lower-risk”. our 60/40+ programme. Assessment represents only a subset of the portfolio The additional changes in performance (n) Covers all Nestlé employees including results are valid for a maximum of three with portion guidance. are due to Nestle’s activities. Joint Ventures. years, only if all parameters remain equal. (g) Formerly called “On-site energy (k) The percentage reflects Nestlé’s (o) Covers Nestlé employees registered in (d) Excludes total petcare and, for USA generated from renewable sources”, full-year compliance to the stricter 35% the HR system (approximately 80% of all only, Dreyer’s and licensed brands this indicator has been renamed for children audience threshold as redefined employees). Häagen-Dazs and California Pizza Kitchen. more clarity. in September 2011. (p) Covers approximately 80% of all (e) Across EU 27 plus Norway, (h) New KPI. % based on renewable (l) Based on internal and external employees through a combination of Switzerland, the Adriatic Region, Ukraine component of direct energy use only audits. Following a change in the manual submission from the markets and Moldova. Excludes plain coffee, (e.g. spent coffee grounds burnt from criteria in July 2010 to differentiate and the training system. tea and water, products for Nestlé factory operations). higher- and lower-risk countries, more Professional, gifting chocolate, (i) Correction of factory coordinates countries are now part of the “higher- seasonings, petcare, Nestlé Health resulted in one factory being deleted from risk” category where the Nestlé Policy Science and Nestlé Nutrition. the list of factories present within and Instructions for Implementation Highlights 2012

75.7% 5.4 million 6692 Nestlé products meeting Nestlé Children reached by the Nestlé Renovated products for nutrition Nutritional Foundation criteria Healthy Kids Global Programme, or health considerations in 64 countries 11 70 0 100 billion 690 054 Equivalent tonnes of salt removed Servings of iodine-enriched Maggi Farmers working directly with Nestlé by Maggi from its portfolio over the products sold worldwide last eight years 44 000 489 217 Farmers having access to financial Water-saving projects in our factories, Clean drinking water projects in the assistance from Nestlé worth up to saving 6.5 million m3 South Asia region, helping to improve USD 37.8 million access and sanitation for more than 100 000 school children

39 – 24% 18 103 Factories generating zero waste Reduction in direct GHG (Greenhouse Employees completing our online for disposal Gas) emissions since 2002 human rights training tool

A message from our Chairman 2 Nestlé and the global 10 Contents and our CEO nutrition challenges

Focus on nutrition 4 Summary: Creating 32 Shared Value, sustainability and compliance in 2012 Expert opinion 6 Meeting our commitments 44 Nestlé in society

The Nestlé in society: Creating sustainability and compliance Shared Value and meeting our during 2012. Furthermore, it commitments 2012 summary sets out specific commitments report focuses on our work on we are working towards in the nutrition, one of the three focus areas of nutrition, water, rural areas of our “Creating Shared development, sustainability and Value” approach. It also provides compliance. These are listed on an update on our CSV activities pages 44–48. in water and rural development, Throughout the report, we as well as related progress in have provided useful links to the areas of environmental further online information.

“We believe we can make “Creating Shared Value is Nestlé in society pyramid an important contribution built upon fundamental

to society, by going a step commitments to society, beyond corporate social both to achieve the highest Nutrition, water, responsibility to create value standards of compliance with rural development

through our core business laws, codes of conduct and Creating both for our shareholders our own Nestlé Corporate Shared Value and society. We prioritise the Business Principles as well areas of nutrition, water and as to protect the environment Protect the future rural development to create for future generations.” Sustainability shared value; this requires Paul Bulcke, long‑term thinking...” Chief Executive Officer Laws, business Compliance Peter Brabeck‑Letmathe, principles, codes of conduct Chairman

Nestlé in society 1 A message from our Chairman and our CEO

At Nestlé we have always believed that in order to prosper we need the communities we serve and in which we operate to prosper as well; and that over the long term, healthy populations, healthy economies and healthy business performance are mutually reinforcing. We recognise that our position in society brings both opportunities and responsibilities: to do business in compliance with national laws, international standards and our own Nestlé Corporate Business Principles; and in ways that help protect the environment for future generations. Thus, our commitments to sustainability and compliance are based on Nestlé Chairman Peter Brabeck‑Letmathe visits Nestlé Institute of Health Sciences (NIHS) common‑sense values; and form laboratories in November 2012 as part of NIHS’ inauguration. the foundations upon which we build our actions in Creating Shared Value. We also restate our support for the UN Global Compact as a founding member of UN Global Compact LEAD – a new platform for corporate sustainability leadership.

Creating Shared Value We believe that we can create value for our shareholders and society by doing business in ways that specifically help address global and local issues in the areas of nutrition, water and rural development. This is what we mean when we speak about Creating Shared Value (CSV). We proactively identify opportunities to link our core business activities to action on related Nestlé CEO Paul Bulcke visits the Nestlé‑sponsored Nutrimovil programme in Guatemala City, social issues. offering free nutritional advice to lower income consumers. That is why we have called this report Nestlé in society: Creating Shared Value The report’s scope is ambitious, consumers by providing tastier and and meeting our commitments 2012. This reflecting our determination to meet healthier food and beverage choices. year, its particular focus is on nutrition, our responsibilities and play our part Consequently, we are acutely aware of but it also covers our commitments to in addressing global challenges. the escalating food and nutrition crisis, compliance, including human rights, which is closely linked to the global progress in our other CSV priority areas Focusing on nutrition water crisis, amongst other things. (water and rural development), as For Nestlé there is no higher priority In both water and nutrition, as in many well as in environmental sustainability. than enhancing the quality of life of our pressing global issues, it is important to

2 Nestlé in society The facts speak for themselves: • Globally, an estimated capacity and, even more importantly, How urgent is • There are 925 million 43 million preschool children were the determination to do so. the food and under‑nourished people in the overweight or obese in 2010, a world today (FAO). 60% increase since 1990, of which Water, rural development and more water crisis? • Two billion people – nearly over 80% live in developing one‑third of the world population countries (American Journal of The second section of our report – suffer from deficiencies Clinical Nutrition, Nov 2010). provides short summaries, covering in iron, iodine, vitamin A, zinc, • Today, 31 countries face chronic water, rural development, environmental or a combination of these; freshwater stress and shortages. e.g. the World Health By 2025 this is estimated to rise to sustainability, compliance and human Organization estimates that 48 countries as water withdrawal rights. These confirm that we have over 740 million people suffer outpaces renewal (United Nations made progress on meeting our CSV, from iodine deficiency Environment Programme). These disorders, and that 250 million challenges will only get more sustainability, human rights and preschool children are vitamin A pressing as the global population compliance commitments during 2012. deficient. rises to 10 billion by 2100. Meeting our commitments take collective action. If we do not, example through micronutrient In a table at the end of this report we everyone in the world, whether in fortification and systematic reductions have set out our ambitions to make a developed or developing countries, in public health‑sensitive ingredients difference on some of the key nutritional will soon become aware of the (e.g. salt, sugar, saturated fats and challenges identified in the Focus on consequences as both food and fresh, trans‑fatty acids); and by providing nutrition section; and we also set out our clean water grow increasingly scarce better advice to consumers about key forward commitments on rural and expensive. ingredients, portion size and their development, water, sustainability, As the world’s leading Nutrition, nutritional needs. It also summarises human rights and compliance. Health and Wellness Company we have our involvement in nutrition education a unique opportunity to help address campaigns worldwide, including our Sharing your views the food and water crises; in particular Nestlé Healthy Kids programmes, and Together with the more extensive and the specific nutrition challenges the fundamental role that R&D plays in detailed online report available in the facing consumers at a local level: everything we do – from the genomic Nestlé in society and Creating Shared from over‑nutrition to under‑nutrition studies underway at the Nestlé Institute Value sections of our corporate website including micronutrient deficiencies. of Health Sciences to biofortification at www.nestle.com, this print report This “double burden” of malnutrition and the behavioural work we are doing records our progress and challenges and the related stress on already across our global R&D network. in 2012. overstretched healthcare systems is a We must emphasise that the nutrition We hope you find our Nestlé in pressing challenge for us all. This is why challenges the world faces require society communications informative we have devoted the first part of this concerted collective action rather than and engaging. We welcome your input report to nutrition. sporadic, isolated projects. Nestlé can and views, which you can share with We have set our actions during 2012 play a valuable leadership role in support us by using the “Contact Us” area at in the context of five key nutrition of this concerted action. We have the www.nestle.com. challenges: advancing science to address global nutrition issues; helping mothers give children the best start in life; helping families to meet their nutritional needs; helping to meet the nutritional needs of people in emerging markets; and helping to meet the needs of older people and those with other specific nutritional requirements. The Focus on nutrition section explains what we are doing to help Peter Brabeck‑Letmathe Paul Bulcke address each one of these areas: for Chairman Chief Executive Officer

Nestlé in society 3 Iron‑ and iodine‑fortified Maggi cubes on sale in an open market in Nigeria, helping address micronutrient deficiency.

4 Nestlé in society Focus on nutrition

Nutrition is fundamental to human life. All programmes and services, we help improve human achievement – social, economic and nutrition habits beginning with the first 1000 days cultural – is directly influenced by our access of life, to promote healthy diets and physical to food and water. activity in youth, and continue to provide better Today, billions of people face serious nutrition throughout the life course and into malnutrition issues. Many do not have enough healthy aging. to eat or drink; others eat too much and move From nutrient‑dense foods and beverages too little. In many countries, and communities, (such as medical nutrition products) to our both issues are prevalent: some people are confectionery and ice cream categories, we have under‑nourished while others are over‑nourished a responsibility to provide tastier and healthier and poor nutrition can coexist with excess options to our consumers. Nestlé is in the caloric intake in the same individuals. forefront of this active and preventative – rather This “double burden” of malnutrition is a very than reactive – approach to both chronic diseases complex global issue. and micronutrient deficiencies. As the world’s leading Nutrition, Health and We believe we have a responsibility to do this, Wellness Company, we have the capacity to but acknowledge that the scale of these issues help address over‑nutrition (obesity and related places them beyond the remit of any one non‑communicable diseases) and under‑nutrition, company, government or NGO. Creating especially micronutrient deficiencies. Shared Value offers an opportunity for Nestlé, There is an emerging consensus that a life together with other stakeholders, to effect course journey approach is required to reduce positive nutritional and lifestyle change through our susceptibility to these conditions and the business we do and the consumers we diseases as adults (see page 10). Through serve throughout life – from mothers and infants Nestlé’s research activities, nutritional products, to old age.

Nestlé in society 5 Expert opinion: understanding the “double burden” of malnutrition

Under‑nutrition and obesity are Africa and 70% in Asia, with more than biofuel may also limit the output of food issues around the world, but 90% of those in South Asia. for human or animal consumption and particularly in low‑ and It is recognised that under‑nutrition is thus raise food prices. The negative middle‑income countries (LMICs), linked to poverty, but economic growth impact of high food prices is likely to be where the simultaneous presence is no guarantee that under‑nutrition levels deepened by the economic downturn. of both has been called the “double will fall. In some countries experiencing Reduced remittances into developing burden” of malnutrition by the rapid economic growth, under‑nutrition countries, loss of job opportunities and World Health Organization. persists or has worsened, reflecting lower wage rates are likely to reduce By Robert E. Black and B. Sesikeran social inequalities. Economic growth income and purchasing power. The might be expected to improve nutrition severity and incidence of poverty are Malnutrition remains a neglected area outcomes, but the trickle‑down effect likely to increase, leading to a rise in globally. In low‑ and middle‑income can be slow. In Brazil, economic growth under‑nutrition. countries (LMICs) maternal and child combined with a reduction in poverty Most scientists concur that climate under‑nutrition is still the predominant through macro‑economic policy change is the single largest challenge concern for its detrimental effects on reforms has been associated with rapid facing mankind. The Intergovernmental morbidity, mortality and human capital, improvements in reducing childhood Panel on Climate Change estimated that as well as its link to chronic diseases in underweight and stunted growth. This is climate change alone could potentially adulthood, even in countries going a stark contrast with India, where the increase the number of people directly through the nutritional transition. benefits of economic growth have yet to at risk of hunger by a figure between Conflict, drought and natural disasters impact on under‑nutrition. India is home 40–170 million, with many more at risk have profound effects on human to 40% of the world’s malnourished from other related socio‑economic nutrition in the short term. Long‑term children and 35% of its low birth‑weight impacts. Climate change can be linked trends, such as climate change, water infants. to health and nutrition through several scarcity and reduced agricultural land, Many countries are on track to pathways including changing patterns may threaten our capacity to feed the improve income poverty, but few have of disease and mortality, an increase in anticipated 10 billion people in the year much chance of meeting the Millennium extreme weather events and threats to 2100. At the same time, overweight and Development Goal indicator of agriculture and water availablity. obesity continue to increase in halving the number of underweight It is estimated that a 2 ºC rise in prevalence worldwide. Many factors children. Progress in addressing both temperature would put 220 million contribute to this increase, including under‑nutrition and global micronutrient people at risk of under‑nutrition due to urbanisation and more sedentary deficiencies has been compromised reduced agricultural output. A 3 ºC rise lifestyles, as well as an increase in by global trends such as rising food and would place 440 million more at risk of consumption of refined carbohydrates oil prices, reduced water availability under‑nutrition. and animal products. and changing weather patterns, Discussions about how to make better possibly due to climate change. conceptual and operational bridges Under‑nutrition Rising food prices significantly between the promotion of agriculture to In 1990–1992 the estimated number erode households’ purchasing power. enhance food security and economic of people worldwide suffering The poorest and those who mostly development, and the promotion of ways from hunger was 824 million. By 2007 depend on the market to access food to improve human nutrition, are ongoing. this figure had risen to 923 million, are particularly affected. The loss A particular emphasis in this rethinking indicating that no progress has been of purchasing power also affects of linkages is the challenge of meeting made in achieving the Millennium households’ ability to buy heating, maternal and child nutritional needs in Development Goal target of halving lighting, water, sanitation, education, low‑ and middle‑income countries. Major the number of people suffering from and health care, all of which are initiatives by the G8 on food security are hunger and of underweight children. inputs into nutrition. promoting agricultural productivity, while In the Lancet series (2008) Black Rising oil prices lead to increased health agencies and partners, such as in et al. estimated that there were nitrogen‑based fertiliser and transport the Scaling Up Nutrition movement are 112.4 million underweight young costs, which in turn lead to increases in focused on nutrition in the first 1000 days children globally – 28% of them in food prices. The production of crops for of life, from conception through

6 Nestlé in society “In some countries experiencing rapid economic growth, under‑nutrition persists or has worsened.”

Left, Robert E. Black, MD, MPH, Edgar Berman Professor and Chair of the Department of International Health, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, USA. Right, B. Sesikeran, MD, Former Director, National Institute of Nutrition (ICMR), Hyderabad, India.

pregnancy and the first two years of life. Nutrition as Central to Development) The goals of enhancing food security identifies overweight among children need to be brought conceptually under five as a cause for concern in together with the need to ensure many developing countries, especially nutrition security, especially for the poor. those in Africa where rates seem to be increasing more than three times faster Overweight and obesity than in the developed world. It has been Evidence shows that overweight and estimated that in 2010, some 43 million obesity are issues in countries where children were overweight or obese, maternal and child under‑nutrition are with 80% of them living in LMICs. also prevalent, including those with low Global prevalence of these conditions per capita Gross National Product. The is expected to reach 9.1% by 2020, World Bank’s strategy (Repositioning compared to 4.2% in 1990.

Nestlé in society 7 Teaching food preparation and hygiene at scale in Côte d’Ivoire with the Maggi “Caravane des étoiles” cooking event.

In many countries, inequities mean and obesity – particularly those living in capacity, reproductive health and adult that some people become overweight urban areas, where dietary changes earnings. If we wait until a child is two while others experience food insecurity often mean increased energy intake. years old, the effects of under‑nutrition and under‑nutrition. In some settings, The health impacts of these dietary are already irreversible”. there is a high prevalence of overweight changes are further exacerbated among In South Asia there is an urgent need or obesity in women and a high urban migrants due to their transition to strengthen the implementation of all prevalence of under‑nutrition in their from a physically active rural lifestyle the existing nutrition intervention children. to a largely sedentary one. programmes and improve infant and Diseases related to diet and lifestyle, young child feeding practices. The Malnutrition in South Asia such as obesity, type 2 diabetes, assessment and use of food security Malnutrition issues are particularly metabolic syndrome, cancer and data to target interventions based on pressing in South Asia, where cardiovascular disease are reaching the availability of calorie and protein, increasing population and urban epidemic proportions across South as well as micronutrient rich foods at migration have had a profound impact Asia, with obesity, diabetes and community level, is needed urgently. and economic growth has done little hypertension a growing problem among Further work is needed to test to reduce under‑nutrition. Here, children and adolescents. additional strategies for improving overwhelming numbers of children are Current understanding suggests that dietary diversity through behavioural caught in a vicious cycle of poverty, the first 1000 days after conception are change. Micronutrient fortification and directly related to poor education levels, critical and that under‑nutrition of the supplementation might offer effective inadequate diets, poor health and low mother or child during this phase has and scalable options. At the same time, cognitive capability. Poor urban long‑term adverse consequences on it will be equally important to strengthen migrants also face food insecurity, physiological and neurological sanitation, provide safe drinking water, adding to the increasing numbers of development. A 2008 Lancet study initiate income‑generating schemes and people experiencing severe (Victora, C. G et al.) concluded that: address the risk of emergencies such under‑nutrition in urban areas. “Intervening within this period will have as droughts, earthquakes and floods if Middle- and high‑income groups have life‑long and life‑changing impacts on long‑term improvements in nutrition experienced a steady rise in overweight educational achievement, labour are to be achieved in this region.

8 Nestlé in society Reformulating Cereal Partners Worldwide recipes in Orbe, Switzerland, as part of a global commitment to improve nutritional profiles by 2015.

“Breastfeeding and Conclusions and recommendations Enhancing and supporting these Low‑ and middle‑income countries practices are a priority and must be the use of high quality must confront the “double burden” of accomplished in the face of continuing, complementary foods malnutrition, including stunting, and but hopefully decreasing, poverty. deficiencies of essential vitamins and Society must also address increasing after six months minerals. This “double burden” has concerns about food prices and of age are essential serious adverse consequences in death, agricultural productivity for foods as a to promote growth illness and delayed development during consequence of competition with crops childhood and into adulthood. It also has used for biofuels, water scarcity, and and development.” important consequences for adult weather instability. These global obesity and non‑communicable challenges require concerted and diseases. coordinated actions by governments Urgent attention should be given to and civil society to ensure population adolescent and maternal nutrition to health, better educational attainment ensure proper foetal growth and to and economic productivity. improve infant and young child feeding. Food manufacturers can Breastfeeding and the use of high contribute in several ways: through quality complementary foods after targeted micronutrient fortification, six months of age are essential to in line with WHO and other promote growth and development. science‑based recommendations; These practices, together with by reducing the volumes of public health continued adequate micronutrient sensitive ingredients and increasing intakes, dietary diversity and avoidance those such as fruits, whole grains of excessive weight gain during and fibres in their products; and Read the full article at www.nestle.com/ childhood, can also be expected to by educating consumers around issues csv/2012/expert. The views expressed in this article are the authors’ alone and are not reduce the risk of stunting, adult obesity such as balanced nutrition and the necessarily shared by Nestlé. and related diseases. benefits of exercise.

Nestlé in society 9 Nestlé and the global nutrition challenges

A number of global trends – infants and children, increasing illness Every individual has what nutrition including growing world and premature death among all age scientists call a “maximal physical and population, urbanisation, rising groups and decreasing personal and mental potential trajectory” for life, which incomes, and an increase in the national productivity. is genetically predetermined (shown as number of people living beyond a blue line in the graphic below); 60 years – have an impact on Many forms of malnutrition however, “sub‑optimal nutrition and nutritional habits and health. In many developing countries, people lifestyle” during our time in the womb or effectively bear a “double burden” during infancy, childhood, adolescence These trends can improve dietary choice of malnutrition, with under‑nutrition and adulthood gradually erodes our for some people, but are also marked (comprising protein‑energy malnutrition physical and mental functioning (red by increases in the number of people and micronutrient malnutrition) and line in our graphic) resulting in impaired adopting less nutritionally‑balanced over‑nutrition (overweight and obesity) health, independence, quality of life diets and more sedentary lifestyles. occurring simultaneously. In general, and ultimately premature death. These choices lead to over‑nutrition people in lower income groups around and related non‑communicable the world are at higher risk of suffering Our “Optimal Nutrition, Health and diseases at one extreme. At the other, malnutrition in any form. Wellness” goal under‑nutrition, including micronutrient In line with our Good Food, Nestlé’s goal is to help consumers attain deficiencies and associated disorders, Good Life promise, Nestlé aims to and maintain optimal nutrition, health persist. lead industry efforts to help ensure and wellness, which is why we’re Under‑nutrition and over‑nutrition consumers everywhere have the working continuously to improve our currently affect the health, wellness right choice and availability in order understanding of nutritional and health and livelihoods of nearly half the world’s to be optimally nourished and needs during the most critical early life population – irreversibly impairing the consequently enjoy good health stages – the first 1000 days, growth physical and mental development of and personal wellness. and development stages during infancy, childhood and adolescence – and to Promoting optimal Nutrition, Health and Wellness use this understanding to develop appropriate products and services, throughout the life course beginning by supporting the WHO (Pre) Toddler Child Teen Early adult Mature adult Late adult recommendation of six months baby; and first pre- exclusive breastfeeding as the best 1000 school nutritional start in life. days

Optimal growth and development Maintenance of health and independence Helping consumers avoid under‑nutrition Our efforts to help consumers avoid Maximal genetic potential for physical under‑nutrition focus mainly on and mental function Physical and mental function and Physical preventing micronutrient malnutrition through vitamin and mineral fortification of Nestlé foods, especially our Popularly Over‑nutrition Positioned Products – high‑quality food Under‑nutrition Unhealthy lifestyle products that provide nutritional value at an affordable cost and appropriate Sub‑optimal physical and mental function format. We prioritise the needs of young children and women of child‑bearing age in countries where micronutrient deficiencies are most prevalent and fortify the products preferred by these vulnerable groups to address specific -9m 0y 2 6 12 17 25 45 75 Age local needs.

10 Nestlé in society Helping consumers avoid over‑nutrition Our Focus on nutrition section We work at helping consumers to avoid becoming overweight or obese and highlights five key nutrition challenges developing related non‑communicable diseases (such as cardiovascular for the future: disease) in several ways. We aim to help educate them about their nutritional needs by improving the information about ingredients and portion size we 1. How can Nestlé help advance provide on our products. We also support other initiatives and promote the science to address global nutrition better hydration along with the benefits of physical activity. issues? Using rigorous nutritional criteria as part of our 60/40+ approach, – ensuring our products are preferred against competitor products in blind taste tests 2. How can Nestlé help mothers give and bringing relevant nutrition advantage – we are working their children the best start in life? continuously to improve the levels of essential nutrients in our products, while also lowering their saturated fat, sugar and salt content, to offer our consumers 3. How is Nestlé helping families the tastiest and healthiest choices. to meet their nutritional needs?

4. How can Nestlé help to meet the nutritional needs of people in emerging markets?

5. How does Nestlé meet the needs of older people and those with other specific nutritional requirements?

Nestlé in society 11 The Nestlé Research Center Metabolic Unit runs clinical studies in areas including metabolism and energy regulation, to support Nestlé’s Nutrition, Health and Wellness initiatives.

12 Nestlé in society 1

How can Nestlé help advance the science to address global nutrition issues?

As the world’s leading Nutrition, Health and Wellness Company we are committing the resources to help address malnutrition, micronutrient deficiencies, obesity, and other global nutrition issues. But our actions to do so must be based on real evidence and understanding. Malnutrition for example, has multiple causes: the foods we eat and in what quantities; the conditions we live in; our genes; our lifestyle today and during the early years of our lives. If we understand these causes and how they influence each other, we can help develop solutions that make a positive difference. Research and development (R&D) provides this understanding and produces innovation in products and technologies: continuous improvements in our product portfolio and far‑reaching solutions that will have an impact in the longer term. For example, these might include personalised nutrition solutions for patients during treatment for acute diseases and for consumers with a predisposition to chronic conditions.

Nestlé in society 13 Focusing our research Nestlé has its own internal R&D functions and also external partnerships 75.7% with academia, governments, research Nestlé products meeting Nutritional Foundation criteria institutes, corporate ventures, startups, suppliers and NGOs. It focuses on two key objectives: keeping people healthy through the food they eat and finding 1.54 billion solutions to help them manage chronic Global investment in Research and diseases. Development, in CHF

Learning more about nutrition At the heart of R&D in Nestlé is the • If mothers and caregivers persist in Nestlé Research Center (NRC) – with its offering healthy foods that infants HQ in Lausanne, Switzerland – which is initially reject, the infants will eventually the centre of scientific knowledge and learn to eat the food and ultimately research linking into the global network prefer it to less healthy choices; of 32 R&D and Product Technology • Infant food choices are influenced Centres worldwide. by the mother or caregiver’s facial NRC supports Nestlé product expressions during feeding; The Nestlé Research Center studies development and innovation by focusing • Mothers and caregivers can be taught behaviour to understand drivers of pleasure and healthy food choices. on four key aspects: Nutrition and to detect satiety signals and avoid Health; Food Science and Technology; overfeeding. Food Quality and Safety; and Sensory NRC has published a joint study with product innovations through our and Consumer Science, which explores the University of Wageningen that network of 300 Application Groups. how human behaviour towards food suggests the time people spend influences dietary choices. Part of this chewing their food may be an important Putting innovation into action research, focused on the role that factor in determining energy intake. The Nestlé Nutritional Profiling System parents play in promoting healthy eating NRC’s work has real impact (NNPS) is a rigorous system used to habits in children, has produced several across all our product categories and benchmark our products against set useful insights: feeds straight into locally relevant criteria – based on recommended values from the World Health Organization and other independent authorities. It assesses a product’s nutritional contribution, considering its role in a balanced diet, its ingredients (including fat, added sugar, calcium and whole grain) and the serving size usually consumed, either by adults or children. In the eight years since we adopted the NNPS, we have progressed to 75.7% of the entire Nestlé portfolio achieving the Nutritional Foundation in 2012. The NNPS framework helps us assess whether a Nestlé product achieves the Nestlé Nutritional Foundation (NF) criteria. This means it fulfils the nutritional criteria to be appropriate as a frequent choice in a balanced diet.

Understanding chronic diseases In 2011, we created a new research John Corthésy prepares samples for mass spectrometry analysis at the Proteomic and organisation, the Nestlé Institute of Metabonomic Core, a laboratory within the Nestlé Institute of Health Sciences. Health Sciences (NIHS), and

14 Nestlé in society launched a new business, Nestlé Health Science. The Nestlé Institute of Health Sciences, based in Lausanne, Switzerland, focuses on biomedical research to help us learn more about chronic diseases related to cardiovascular, gastro‑intestinal, metabolic and brain functions, and their relationship to nutritional health. Nestlé Health Science works at developing personalised nutrition solutions to help consumers manage chronic conditions, but also targeted solutions for use by medical professionals working in gerontology, critical care, surgical and paediatrics. Nestlé has run clinical trials for many years, with around 100 underway in 2012 and more in the pipeline. To simplify our processes, improve efficiency and expand capacity, we brought all our clinical trials together Bio-fortification: With the growing realisation that cross‑breeding plant varieties at a new Clinical Development Unit, micronutrient fortification is a rich in micronutrients with opened in 2012. This new facility, which developing critical component of bridging the varieties that have a high yield. micronutrient gap for both adults For instance, cassava that is rich includes a specialist Metabolic Unit, crops that help and children, especially in rural in vitamin A is being bred in operates as an independent research bridge the areas of developing countries, Nigeria and Côte d’Ivoire, while unit but will also support Nestlé in Nestlé has launched a new rice that is rich in iron and zinc is nutrient gap research programme that seeks developed for Madagascar. These evaluating the impact our foods and to grow conventionally bred will be integrated within future ingredients have on human biology, crops that are naturally rich in product lines as a complementary health, taste and pleasure. micronutrients. This is done by approach to direct fortification.

ImageBio‑fortification caption here of Sharing our nutrition knowledge loremcassava ipsum at Nestlé’s with the world dolorunExperimental amete Farm consecteturin Yamoussoukro, In order to combat the causes of ImageCôte d’Ivoire. caption here malnutrition, healthcare professionals loremScientist ipsum Mélanie around the world need relevant and Polman (top) dolorun amete up to date information. To help provide consecteturassesses the crop, while agronomist this, in 2005 we created the Nestlé Frédéric Oura Nutrition Institute. In just seven years, examines plantlets with farmer Kan this independent, not‑for‑profit Firmin Kouakou organisation has become the largest (below). private publisher of nutritional information in the world. Its website currently attracts more than 170 000 registered users in nearly every country in the world. The Nestlé Nutrition Institute also carries out nutrition research into public health and health economics. Read more at www.nestlenutrition‑ institute.org.

Challenge: risk of malnutrition. See our commitment on page 46.

Nestlé in society 15 In India, a young mother‑to‑be Pellentesqueand her mother‑in‑law ultric receive volutpatinformation est, from non a doctor temporas part ofmetus the Start dole Healthy pellentesqueStay Healthy ut.programme.

16 Nestlé in society 2

How can Nestlé help mothers give their children the best start in life?

Children who start life with an unbalanced diet face an increased risk of chronic diseases and stunted growth and development. We believe good nutrition for children starts before and during pregnancy, then continues after birth with a well‑nourished mother, breastfeeding exclusively for six months and beyond, in line with World Health Organization recommendations, before making feeding choices appropriate to her weaned child’s developmental stage. We support parents in making the right food choices for their children by providing research‑based nutrition products, including maternal and infant health supplements, and by offering appropriate, consistent advice to help them understand that even small changes to a child’s diet can have a big impact on its health today and throughout its life.

Nestlé in society 17 Ensuring the right approach to promoting infant nutrition In line with World Health Organization (WHO) recommendations, Nestlé supports exclusive breastfeeding during the first six months of a child’s life and for as long after this period as possible in combination with nourishing complementary foods. When breastfeeding is not possible, infant formula is a healthier alternative to choices such as cows’ milk or rice water. We’re strongly committed to marketing our infant food products in accordance with the WHO Code as implemented by national governments everywhere in the world. In 152 countries with conditions of higher risk for infants, we apply the Nestlé Policy and Instructions on Implementing the WHO Code or the government regulations, whichever Nestlé Healthy Kids in Ecuador: one of 68 programmes in 64 countries. is stricter. We have implemented extensive our externally administered Integrity and lactating women in mind. It management systems across all our Reporting System. We also have a provides a combination of beneficial operations to assure compliance with commitment to investigate and respond minerals, vitamins, DHA and Bifidus BL the WHO Code. These systems give to all serious questions about baby‑milk active cultures. Mom & me is already detailed operational guidelines to marketing practices. The information available in several Asian markets at an all Nestlé employees involved in the from all these sources is reported to the affordable price. sale and marketing of breast‑milk Nestlé Board of Directors annually, and substitutes with the objective of is incorporated into our continuous Building dialogue with stakeholders ensuring compliance with our policies improvement practices. Over the past few years, Nestlé has had and local regulations at all levels. In 2011, Nestlé became the first constructive dialogue about To monitor our compliance, we carry infant formula manufacturer to out numerous internal audits and three be included in the FTSE4Good annual external audits. These are backed responsible investment index, the by our “whistleblowing” system and only index in the world that includes strict criteria on the marketing of breast‑milk substitutes. 35 Our Start Healthy Stay Healthy NGOs and interest groups in constructive system dialogue with Nestlé about breastfeeding Our Start Healthy Stay Healthy and other infant nutrition issues stage‑based nutrition system begins with clear support for six months exclusive breastfeeding, whenever possible, and 5.4 million then offers solutions designed to foster Children reached by the Nestlé Healthy Kids healthy growth and development Global Programme, in 64 countries along with good eating habits in children aged six months or older. 250 Giving mothers the nutrition they need Academics, NGOs, Government Ministries Promoting physical activity in schools help implement Nestlé Healthy Kids We developed our nutritional milk drink, through the Nestlé‑partnered IAAF Kids’ Mom & me, with the needs of pregnant Athletics programme.

18 Nestlé in society Helping kids to get active Leadership and healthy through Getting active and eating well can education: help children achieve and keep a Start Healthy healthy body weight. We are working hard to do all we can to promote Stay Healthy healthier lifestyles and diets for kids. in India We launched our Nestlé Healthy Kids Global Programme in 2009, working with more than 250 partners worldwide, including national and local governments, NGOs, health institutes and sport federations. By the end of 2012, there were 68 programmes running in 64 countries with more in the pipeline for 2013–2015. Together, these programmes reached an estimated 5.4 million kids in 2012. The key to the programme’s success is the quality of the expert Image caption here teams, who tailor the format to lorem ipsum dolor un amete consec meet the specific needs of local tetur communities. We also ensure that “Healthy Kids” is not associated In India, home to 40% of the programme. Start Healthy world’s malnourished children, Stay Healthy works through print, with our product brands. Over many women lack information television, the web and by the past 18 months, we developed about nutrition. Reaching an providing doctors with needed stricter participation criteria for estimated four million women in tools to educate women about the less than a year, Nestlé bridges importance of breastfeeding and the programmes because we know this knowledge gap with our the best nutrition for the child’s they work best when children take Start Healthy Stay Healthy first 1000 days of life. part regularly. We have also improved the way we evaluate their impact on health awareness. NRC and the NRC and the EpiGen Consortium life. The study will examine (a body comprising many of how gene function, in both In January 2012, Nestlé became EpiGen the world‑leading public and mother and unborn child, private sector epigenetic is regulated by environmental the main partner of the International Consortium – specialists) are running a research factors – for example, maternal Association of Athletics Federations optimising programme together, to identify nutrition during the early (IAAF) Kids’ Athletics programme, and substantiate the optimal stages of pregnancy. EpiGen one of the biggest grassroots nutrition during nutritional choices for women is contributing emerging scientific during pregnancy and their knowledge, with NRC sharing sports development programmes pregnancy children in order to promote its expertise in maternal and in the world. Nestlé is also a founding good metabolic health in later infant nutrition. member of the EPODE (Ensemble, Prévenons l’Obésité Des Enfants breastfeeding and other infant nutrition Sourcing the best raw materials – Together, Let’s Prevent Childhood issues with around 35 different NGOs The best raw materials generally Obesity) International Network, the and interest groups through annual produce the best products. We work world’s largest obesity prevention stakeholder convenings. closely with our farmers to ensure we network. In addition, the International The Nestlé Nutrition Institute (NNI) can trace our products’ origins and Diabetes Federation and Nestlé has a vital role to play in promoting assure their quality. We also help them will work together to define joint breastfeeding, because its independence introduce more efficient cultivation programmes to promote diabetes from Nestlé is assured. Workshops methods; in the Talamanca District education and prevention. run by the NNI in India and Bangladesh in Costa Rica we assist indigenous were well attended and NNI farmers to improve quality and quantity Challenge: providing nutritionally representatives subsequently of organic bananas, which form the sound products designed for contributed to national breastfeeding base raw material for many baby foods children. See our commitment weeks in both countries. in jars. on page 46.

Nestlé in society 19 With a special focus on encouraging children and Pellentesqueteenagers to cook,ultric Maggi volutpathelps families est, non in Germany temporcook together metus withdole a book pellentesqueof easy‑to‑prepare ut. recipes.

20 Nestlé in society 3

How is Nestlé helping families to meet their nutritional needs?

The majority of Nestlé products are focused on families and their changing nutritional needs over time. Our product range includes many foods and beverages that cut across generations as well as those developed for children, healthy adults and elderly people. As we learn even more about nutrition issues, understanding the needs of different family members is likely to become increasingly important. We already know that eating habits acquired during infancy are likely to last a lifetime. We understand that child and adult obesity is now an issue worldwide and that elderly people are prone to malnutrition. We already have products and services that address these issues and we are working hard to improve them, while developing new solutions. We also offer nutrition advice and work in partnership on education initiatives worldwide – focusing on family members from early childhood through to their older years.

Nestlé in society 21 Using 60/40+ to improve the CPW currently sells around 3.5 billion nutritional value of Nestlé products portions of cereals each year. consumers prefer Nestlé strongly believes that healthy The business case for diets must be enjoyable to be sustained. healthier products Our unique 60/40+ programme We believe there’s a powerful constantly re‑challenges our products to business case for focusing on tastier ensure that they are preferred by at least and healthier products. Since 2009, 60% of consumers of a large panel. when we put in place our unique Nutritional assessments are conducted tracking system, our 60/40+ winning locally which guarantees that wherever products have outperformed the Nestlé operates, it is the nutritional rest of the portfolio, achieving better needs of the local consumer that dictate organic growth, real internal growth the formulation of our products. and margin returns every year. Thanks to the 60/40+ programme, This is proof that relentless work we’ve assessed and renovated products on our recipes is helping meet in 19 different categories (all but consumers’ expectations. newborn and clinical/technical products for which “classic“ taste assessments The Nestlé Nutritional Compass cannot be conducted) in 89 countries 96.8% of our products display the Nestlé already. Examples include our ice cream Nutritional Compass (NNC) – an on‑pack The Nestlé Nutritional Compass; displayed brands such as Skinny Cow, Edy’s Slow labelling framework launched in 2005 to here on Svelty fortified milk in Argentina. Churned and peelable banana ice help consumers make more informed creams which are lower in fat and decisions about our foods and Our research tells us that around 60% calories than competing products. beverages. The Compass provides of consumers find the Compass useful Elsewhere we have reduced sodium in relevant information to guide consumers and we are using their feedback to our Herta cooked meats in France. in an innovative way through continuously improve it, for example, Cereal Partners Worldwide (CPW), understanding the nutrition table, by evolving the contents and ensuring Nestlé’s joint venture with General Mills, ingredients used in the product, tips for they remain pertinent. has committed to reduce the sugar responsible enjoyment and healthy content in 20 breakfast cereal brands usage of our products; and contact Guideline Daily Amount to 9 grams or less per serving by 2015. details to get more useful information. on packaging To help consumers make more informed food choices, in 2006 as part of an industry pledge, we added Guideline Daily Amounts (GDAs) for adults on our packs in the EU region. GDAs are a factual and objective guide to the daily intake for energy and key nutrients, and empower consumers to evaluate a product’s role in their daily diet. In the EU region, GDAs now appear on 99.3% of our products. Beyond the EU region, our voluntary implementation of GDA has been progressing rapidly and now, in line with our global commitments, we will add GDAs to the front of Nestlé packs worldwide.

Talking to consumers about nutrition The Nestlé Nutritional Compass is a great way to talk to consumers about Sensory Expert Regina Arslanian performs a tasting session as part of Cereal Partners nutrition, but not the only way. More and Worldwide’s recipe reformulation in Orbe, Switzerland. more of our products invite consumers

22 Nestlé in society In addition to improving the improve their cooking skills Helping parents and kids get Educating nutritional value of its products and encouraging them to portion sizes right families to cook by reducing salt content and cook more balanced meals using Research shows that what consumers adding relevant micronutrients, fresh ingredients and less balanced meals our Maggi brand has developed fat or salt. Maggi has removed see as a “normal” portion size has with Maggi an ambitious cooking education the equivalent of around increased in many countries over time programme in markets such 11 700 tonnes of salt from its – and that an increasing number are as Germany. Through messages portfolio of products over the on‑pack, online and in specially last eight years and is committed leading more sedentary lives and are commissioned cook books, to bring salt levels down consequently consuming excess Maggi is helping families to even further. calories, which can lead to them becoming overweight or obese. In Since it was founded in Australia advice on physical activities and addition, many consumers have deficient Helping back in 1983, the Jenny Craig a more “mindful” and balanced intakes of essential nutrients. This could consumers to programme has helped millions approach to living. Jenny Craig be because they live on low incomes, live of consumers around the world stresses the importance of manage their to manage their weight one‑on‑one support, with in areas with little access to nutritious weight with through a balanced approach consultants available to help food, or have limited cooking skills. They to nutrition and physical activity. consumers at Jenny Craig centres could equally have adopted particularly Jenny Craig The three cornerstones of or by phone or online through the programme are Food, Jenny Direct. constraining diets, have increased needs Body and Mind – with a range during certain life‑stages (such as growth of Jenny Cuisine entrees and Read the full story at or pregnancy) or may be in poor health, snacks available to complement www.jennycraig.com and taking medication that interferes with nutrition. to “find out more about…” on our when they arrive at schools in four As a complement to our Nestlé websites, and around the world we’re markets (Italy, USA, UK, France): Nutritional Compass and GDA labelling, involved in local and national nutrition two‑thirds of children are under- we adopted a Portion Guidance education programmes. hydrated. We’re running information Framework in 2011 to help consumers Our efforts to promote better daily campaigns in those markets. We’ve make better portion decisions, with hydration are a good example of this. also produced “hydration toolkits” for on‑pack guidance. This is aligned with We know that drinking enough water use in schools through our Project WET initiatives from governments, regulators every day is a healthy habit, best (Water Education for Teachers) initiative and health authorities that have also acquired during early childhood. We and this material will also increasingly been calling for clear portion information have made observational studies to be included in our Nestlé Healthy for consumers. In 2012, we studied the know if children are properly hydrated Kids Programme. latest “food guides” and dietary recommendations from authorities around the world. Then, for each of our product categories, we identified appropriate portion sizes tailored to different ages and life stages, with a little variability to better reflect the fact that exact sizes may not meet individual requirements at each moment of consumption. Our product teams and consumer information specialists are now systematically reviewing – and where necessary challenging – our different ranges with the aim of making Portion Guidance easy to understand. Our consolidated estimates at end 2012 indicated that products amounting to sales of CHF 26.2 billion already offered specific Portion Guidance.

Challenge: reducing public health sensitive ingredients in our products Nestlé Pure Life: encouraging healthy hydration with members of the Texas Youth Football and Cheer League. See our commitment on page 46.

Nestlé in society 23 PellentesqueA Nigerian family ultric enjoys Golden volutpatMorn affordable est, non breakfast temporcereal, fortified metus dole with vitamin A pellentesqueand iron. ut.

24 Nestlé in society 4

How can Nestlé help to meet the nutritional needs of people in emerging markets?

The Food and Agriculture Organization of the United Nations has stated that: “a growing number of developing countries must shoulder a ‘double burden’ of malnutrition: the persistence of under‑nutrition, especially among children, along with a rise in overweight, obesity and diet related chronic diseases.” Nestlé is determined to play a part in addressing this “double burden” and the problems related to it – from endemic anaemia amongst under‑nourished preschool children and pregnant women at one extreme, to chronic disease related to obesity, including heart disease and diabetes at the other. We can help address the “double burden” of malnutrition through the products we provide, the advice we offer and our involvement in nutrition‑related initiatives with other organisations. We can help encourage people to eat more mindfully and promote the preparation and consumption of fresh, healthy foods.

Nestlé in society 25 Boosting the nutritional content of our affordable food ranges We’ve been enhancing the nutritional value of our products for 140 years, so we understand the processes and issues involved very well. We’re using our expertise to fortify our products with different combinations of micronutrients to address local and regional deficiencies. We’re also reducing the levels of public health‑sensitive nutrients in our products. It’s important that our fortified products reach the people who need them most – so they must be accessible, enjoyable, nutritious and affordable. We sell a growing number of Popularly Positioned Products (PPPs), high quality food products that provide nutritional value for people on modest Bear Brand milk – fortified with vitamin A, iron, zinc and vitamin C – on sale incomes. They include everything from in a supermarket in the Philippines. culinary products to beverages and dairy products. More than 4000 PPPs servings of Nestlé products included supplement the nutritional content of are currently available around the world. iron fortification. breast milk. In some parts of the world, These fortifications, which we locally available complementary foods Fortifying our Maggi brand to meet highlight on packaging and through are often deficient in key nutrients. local needs marketing campaigns, along with the We’ve developed a range of affordable We’ve made some big strides in benefits of eating fresh, local ingredients fortified infant cereals to help bridge micronutrient fortification for people in and home cooking, have helped us to this nutrition gap. developing countries through our Maggi achieve a 30%–40% improvement in brand. Iodine fortification is included in Maggi’s market penetration among Highlighting local gaps more than 860 000 tonnes of Maggi lower‑income consumers in two years. in micronutrient supply products – including bouillons, In a number of developing countries, Our efforts to target micronutrient seasonings, noodles, soups and recipe including India, we’ve even successfully fortification where it’s most needed mixes – in many countries around the reduced salt in Maggi products, without have been underscored by the Nestlé world. Based on respective serving size, losing market share. Nutrition Institute’s work on public we estimate the total number of individual servings fortified with iodine Fortifying our milk powder to be approximately 100 billion in 2012. products In addition to iodine, we have initiated Dehydrated milk powders make very an iron fortification programme in India, good carriers of micronutrients and Pakistan, Sri Lanka, the Caribbean, provide a way to get them to people on Central America, Central West African a lower income without changing their countries and the Pacific Islands. We existing eating habits. By the end of estimate that from approximately 2011, our affordable milk ranges – 100 000 tonnes of bouillons, seasonings including Nido, Klim, Bear Brand, and noodles sold in those countries in Nespray, Essentia and Ideal – were 2012, around 32 billion individual available in more than 60 developing countries and had achieved growth in sales of almost 14% in just one year. 100 billion Fortified cereals to bridge the nutrition gap Servings of iodine-enriched Maggi products sold worldwide At a certain point in their development, Milo malted chocolate drink – containing infants require some solid food to Actigen E – being packed in Lipa, Philippines.

26 Nestlé in society In Nigeria, around one third of Ghana, who grow the maize used health and the issues it has highlighted: Addressing pre‑school children are deficient in to make Golden Morn, through our for example, while milk is a good micronutrient vitamin A, while more than Grains Quality Improvement carrier for micronutrients in many three‑quarters of young children Project. Working with the deficiencies in and many pregnant women suffer International Institute of Tropical countries, given that 80% of people in Nigeria through from iron deficiency. To address Agriculture, we’re training farmers China are lactose intolerant to various this issue, Nestlé has fortified its to follow simple practices that degrees, alternative carriers such Golden Morn popularly priced Golden Morn reduce the risk of damage from family cereals with both iron and naturally occurring mycotoxins, as culinary sauces and cereals are vitamin A. More than 210 million and increase yields, quality and more appropriate in that country. servings of Golden Morn are consequently price. To date, The Institute has also worked hard to consumed in Nigeria every year, 30 000 farmers have benefited from highlight the problems of malnutrition so fortification gives families the project since its launch in 2009. across the country the opportunity affecting mothers and their unborn to increase their nutritional intake Read the full story at children in developing countries and at breakfast every day. We’re also www.nestle.com/csv/2012/ acted as a catalyst for action on other helping farmers in Nigeria and goldenmorn nutritional issues. To help us develop products that Maggi takes meet consumers’ nutrition, health fortified and wellness needs, we developed a “Nutritional Landscaping” protocol “magic” to in 2010. This included data on malnourished micronutrient deficiencies, obtained consumers through collaboration with local health in India experts and authorities, as well as detailed consumer research. The protocol helps us target our products and communications to meet the needs of different consumer segments.

Focusing on health economics Responding to feedback on our 2008 Nutrition report, we created an independent research grant to support our understanding of both the personal and macroeconomic impact of our fortified foods. A joint project with the Zurich University of Applied Sciences has already established that fortified milks and infant cereals can reduce anaemia by as much as 50% and has produced “anaemia maps” to highlight where it is most prevalent. Chefs in the new Two billion people worldwide per person, in a single low The project is now focused on R&D Centre at currently suffer from micronutrient priced serving. assessing the macroeconomic impacts Manesar, India. deficiencies. A third of them live To reach consumers in the of under‑nutrition. A separate study The centre focuses in India, which, despite rapid poorest areas, we ran street on nutritious, economic progress, has high rates dramas, TV ads, educational by the World Bank Group suggests affordable products of malnutrition linked to poverty. campaigns targeted at families, that action to reduce under‑nutrition for lower income More than 70% of the population and even sent nutritionists can add 2%–3% to national GDP. If this consumers. consumes less than 50% of the into Dharavi, the world’s largest RDA for several important slum. To date, we’ve sold project reaches similar conclusions micronutrients, with women and 380 million sachets of Maggi it may encourage local governments children particularly affected. Masala ae Magic, which has to partially fund the provision of To make key nutrients affordable won several innovation awards, and attractive to consumers, in and rolled the concept out in fortified foods. 2010 we launched Maggi Masala Bangladesh and Sri Lanka. ae Magic spice sachets, which Challenge: addressing micronutrient provide at least 15% of the RDA Read the full story at www. deficiency. See our commitment on for iron, vitamin A, zinc and iodine nestle.com/csv/2012/maggiindia page 46.

Nestlé in society 27 A dietitian discusses the benefits of Resource PemPal Active with a patient in the Kansai Rehabilitation Hospital in Osaka, Japan. The product is Pellentesquerich in protein, ultric vitamin D and volutpatcalcium toest, support non muscle temporstrength metus and optimise dole bone pellentesquehealth. ut.

28 Nestlé in society 5

How does Nestlé meet the needs of older people and those with other specific nutritional requirements?

Increases in the number of people suffering from non‑communicable diseases and chronic health conditions – many of which are linked to nutrition – are placing a huge resource strain on health systems worldwide. While our focus is largely on developing nutritional solutions for people preparing and eating food at home, we’re also working at addressing the needs of hospitals, schools, restaurants and other places where food is cooked and consumed. Specifically concerning patients already being treated for acute or chronic diseases and for consumers with a genetic predisposition to certain conditions, we also believe we can use the R&D expertise we’ve developed over 140 years, our resources, and our influence, to pioneer science‑based personalised nutrition solutions. In simple, bold terms, we aim to create a new industry; a unique nutrition offer “between food and pharma”.

Nestlé in society 29 A laboratory specialist receives patient serum to be analysed for a gastrointestinal disease at Prometheus Laboratories in San Diego, USA.

Providing the right nutrition so. The tool was developed jointly by the solutions for elderly people Nestlé Research Center and Toulouse Malnutrition affects people of all ages, University in 1991, but has been updated 170 billion with an estimated 20 million people recently to improve its effectiveness. Annual cost of malnutrition to European at risk in the European Union alone. It comprises a questionnaire and a tape healthcare systems, in EUR The cost of treating malnutrition device to measure calf circumference drains European health systems of if weight‑based BMI calculations are EUR 170 billion every year. The problem not possible. The Mini‑Nutritional 1900 is significantly more common in older Assessment tool and tape received a Davigel customers able to meet people. One in three of all elderly people Good Design Award in 2011 from the the GEMRCN requirements, a French law living in care homes and approximately Japan Institute of Design Promotion aimed at tackling the rise in obesity the same proportion of those living after its widespread use in the aftermath independently are already malnourished of the Japan earthquake that year. or at risk of malnutrition. As national Currently translated into several different sufferers to swallow food, is prevalent in populations age, this problem is likely languages with more to follow, it is frail, elderly people and those with to get worse unless action is taken. interactive and there are digital versions certain neurological conditions. The The Nestlé Mini‑Nutritional suitable for iPhones and other mobile condition can have a profound impact Assessment tool, which is provided digital devices. on patients’ nutritional health, but 75% by the Nestlé Nutrition Institute, is a Nestlé Health Science has developed of those affected are never diagnosed. validated nutrition screening and an eating assessment tool, EAT‑10, that EAT‑10 is just one example of a number assessment tool that can help can help healthcare professionals and of disease‑specific and personalised healthcare professionals to identify carers identify dysphagia problems early nutrition solutions currently being people aged 65 or above who are in vulnerable patients. Dysphagia, a developed or researched, in Nestlé and malnourished or at risk of becoming condition that makes it difficult for by Nestlé Health Science.

30 Nestlé in society In 2012 NIHS joined the the study to help us understand NIHS has set scientific projects The DioGenes EU‑funded DioGenes consortium better the mechanism involved underway, all broadly focused on how consortium – – the largest multi‑centre dietary in weight loss and weight nutrition and genetics influence health intervention study on weight maintenance. Ultimately, the understanding management currently underway study will provide the basis for and disease. These include: a Genome weight issues in Europe. An NIHS team is giving people in communities Interaction Study to examine how analysing clinical samples and across Europe better advice genetic factors affect people when they will integrate genomic data into about weight issues. make the transition from a poor to a healthy diet; a major study of weight CréaMenu – Nestlé subsidiary Davigel, which needs of the caterer’s customers, management in Europe through the specialises in providing nutritional whether hospital patients, DioGenes Consortium; and workshops meeting solutions to the catering industry, school children or guests in a has launched a dedicated online restaurant. As a result, over on essential nutrients with the Bill and nutritional tool that enables customers to pick 1900 of Davigel’s customers in Melinda Gates Foundation. needs for menus from an online database of France can now easily meet over 3000 products and recipes. the GEMRCN requirements, a caterers These menus are personalised to new French law aimed at tackling Transforming knowledge ensure they meet the nutritional the rise in obesity. into new products at Nestlé Health Science Nestlé Health Science aims to develop Focusing on biomedical research metabolomics, systems biology and science‑based personalised nutrition at the Nestlé Institute of others – to understand the interaction solutions, with a strong focus on Health Sciences between food and beverages we eat, nutrition for patients already under At the heart of our search for truly lifestyle, inherited factors and individual treatment. A number of acquisitions personalised nutrition solutions is metabolism. completed since Nestlé Health Science the Nestlé Institute of Health Sciences It focuses on three categories of was founded in 2011 have equipped it to (NIHS), launched in 2011 and based on chronic conditions: gastrointestinal focus on three acute areas: ageing the campus of the Ecole Polytechnique health (including irritable bowel medical care, critical care and surgery, Fédérale de Lausanne, Switzerland. syndrome, inflammatory bowel disease and paediatric medical care. These Building on Nestlé’s history and and Crohns), metabolic health (notably acquisitions include Vitaflo, a UK expertise in nutrition, NIHS uses state diabetes and obesity) and brain health company that has already developed of the art biomedical knowledge and (particularly cognitive decline and nutrition products for people with technologies – genomics, proteomics, Alzheimer’s disease). genetic conditions that produce intolerances to specific amino acids. The company will also address chronic gastrointestinal, metabolic and brain health conditions. In the longer term, Nestlé Health Science aspires to produce personalised nutrition products that target more complex conditions such as diabetes and heart disease. The acquisition of CM & D Pharma, which produces products for irritable bowel disease, colon cancer and other gastrointestinal conditions; and Prometheus Laboratories, which develops diagnostic and therapeutic gastroenterology and oncology products, reflects its long‑term focus. Nestlé Health Science also holds a stake in Vital Foods, a New Zealand business that produces foods for people with a range of gastrointestinal conditions.

Challenge: malnutrition at all life stages. See our commitment Vitaflo UK regional territory manager Emma Plant (left), explaining to the mother of a child with an inborn error of metabolism how to use a protein-free milk substitute – Prozero. on page 46.

Nestlé in society 31 A farmer delivers milk to a Nestlé collection centre close to the Shuangcheng factory in China.

32 Nestlé in society Summary: Creating Shared Value, sustainability and compliance in 2012

Our work on nutrition has been highlighted This summary, together with our online in this report, but this is only one aspect report, published in April 2013, reports on our of Nestlé’s engagement in society. CSV performance. It covers Nestlé’s global In this section we will share some of our operations for the year ending 31 December accomplishments in compliance, human 2012, unless otherwise stated. rights, environmental sustainability, The data covers Nestlé’s wholly owned water, and rural development. companies and subsidiaries, excluding joint Throughout 2012 we’ve made concerted ventures and suppliers, unless specifically stated. efforts to meet our CSV, environmental The environmental data refers to factories only sustainability and compliance goals. We’ve (excluding some recent acquisitions), and safety progressed with more than 100 projects related and health figures cover approximately to nutrition, water or rural development; 339 397 Nestlé employees (permanent and harnessed the energy and imagination of temporary), as well as approximately thousands of employees; and when necessary, 112 775 contractors working on Nestlé sites. updated our principles and policies to keep The CSV online report (at www.nestle.com/csv) Nestlé at the forefront of best practice. has been independently assured by Bureau Veritas.

Nestlé in society pyramid

Nutrition, water, rural development

Creating Shared Value

Protect the future Sustainability

Laws, business Compliance principles, codes of conduct

Nestlé in society 33 Rural development

Nestlé works directly with some Nestlé buys the majority of its 690 000 farmers who produce the agricultural raw materials, and the role raw materials that go into our of governments in providing services 73% products and 73% of our factories to communities. Nestlé factories located in rural areas are located in rural areas – so rural development is at the very heart of Successful farmers our Company and one of our three To secure a reliable supply of raw 44 000 CSV focus areas. materials for the future, we need to build Farmers having access to financial “farmer loyalty” just as we build assistance from Nestlé worth up to Managing rural development consumer loyalty to our brands. Our aim USD 37.8 million Following input from our CSV Advisory is to ensure that farmers are “farmers Board, we have developed a Rural by choice” – fairly rewarded and farming Development Framework, to assist us in line with environmental and by social and business needs. Early in to deliver a consistent approach on rural sustainability best practice. In 2012, we 2013, we will carry out assessments development. The Rural Development helped more than 44 000 farmers to define the priority areas of Framework also focuses on supporting access support and assistance worth up involvement based on the level of rural communities around our operations. to USD 37.8 million, of which Nestlé influence and ability to make an impact, It aims to deliver business and societal provided USD 23 million as direct as well as the relevance to Nestlé’s value by focusing on key gaps and financial assistance. More than operations. alignment of objectives along the supply 1100 specialists, including agronomists, At Nestlé Waters, the local chain and with stakeholders, including and over 12 000 support staff communities around our plants have farmers, farm workers and the contributed to these projects in 2012. always been important partners and communities within which they are our relationship with them is key. Based located. The framework recognises the Productive and respected workers on previous experience in countries like role of trade partners through whom Many farm workers experience very France and the United States, Nestlé poor working conditions, so we’re Waters launched a community taking concerted action to address risks engagement guidebook in 2012 for our and human rights in our supply chains. water plants. Pilot projects have since In January 2012, we issued a been launched in Algeria, Argentina, Commitment on Child Labour in Brazil, Egypt and Turkey, with plans for Agricultural Supply Chains (available a global rollout in 2013–2014. in full at www.nestle.com/csv/ ruraldevelopment/sourcing/ Alignment, collaboration tacklingchildlabour), highlighting cocoa, and advocacy hazelnuts and vanilla as priority To achieve our rural development goals, concerns. In February, we became the we need to make sure our trade partners first food manufacturer to partner with and suppliers work with us to pursue the Fair Labor Association (FLA). Our a common agenda. We also need to work with them is focused on protecting recruit technical partners and pursue workers conditions and rights in our a targeted advocacy strategy to ensure hazelnut supply chain in Turkey and our supportive policies are in place in our cocoa supply chain in Côte d’Ivoire. priority countries.

Prospering communities Responsible sourcing The Rural Development Framework To ensure that vendors share and work also focuses on supporting rural in accordance with our principles for our Nestlé’s Cocoa Plan launches in Cárdenas, communities around our operations. key commodities, we’ve created Tabasco State, Mexico, with cocoa farmer Eugenio Bautista Velázquez (left) consulting During 2012, we decided to focus our Responsible Sourcing Guidelines (RSGs) Nestlé advisor Rubén Jiménez. investment on 21 countries, prioritised for palm oil, soya, paper and board, milk,

34 Nestlé in society Creating Shared Value

Responsible sourcing initiatives In 2010, we made a commitment that no Nestlé products – including critical raw and packaging materials – should be linked to deforestation. We’re currently working towards this commitment, through the RSGs for commodities linked to this issue – palm oil, soya, beef and paper – while also taking into account the impacts of dairy, cocoa, coffee and sugar.

The Nestlé Cocoa Plan The Nestlé Cocoa Plan is working to improve the lives of cocoa farmers and the quality of their crops, through focussing on the three pillars of enabling farmers to run profitable farms, improving social conditions and sourcing sustainable, good quality cocoa. In 2012 we trained over 27 000 farmers and distributed 1.1 million plants globally, built Through its Ecolaboration to give farmers the advice and or refurbished 12 schools in Côte d’Ivoire, Nespresso programme, launched in 2009, assistance they need to meet as well as kicking off a partnership with Ecolaboration – Nespresso is proving that quality our AAA Sustainable Quality the Fair Labor Association to further and sustainability can go hand in coffee programme standards – coffee and hand. paying a higher premium to those assist our work on eliminating child labour. sustainability Ecolaboration aims to improve who do. The brand had installed the quality and security of supply about 20 000 dedicated capsule How responsible sourcing works go hand of our coffee beans, manage the collection points in 21 markets, environmental and social impacts reaching its 75% recycling at Nestlé in hand of our business, and improve the commitment a year early. It’s also Our responsible sourcing activities lives of our coffee farmers, their cutting emissions at the growing are organised into three separate families and communities. During stage and point of purchase, programmes: A Colombian 2012, Nespresso brought all its introducing more energy‑efficient farmer with freshly sustainability efforts together coffee machines for Nespresso • Audit programme – tier one suppliers: picked coffee through Ecolaboration and made connoisseurs. audited against Nestlé Supplier Code cherries, meeting bold commitments on sustainable requirements addressing labour Nespresso’s AAA sourcing, improved recycling and You can read more Sustainable Quality carbon reduction. about Nespresso Ecolaboration standards, covering health and safety, coffee programme Nespresso is working with local at www.nespresso.com/ environment and business practices; standards. agronomists and other partners ecolaboration • Traceability programme – high‑risk categories: traces the origins of all relevant goods not purchased directly coffee, cocoa, sugar, hazelnuts, vanilla, certified sustainable palm oil, of from the farmer, including palm oil, seafood, and in the near future, animal which 13% is traceable RSPO certified soya, paper and sugar; welfare. These seek to ensure that our oil and 67% is GreenPalm certificates. • Farmer Connect Programme – direct suppliers’ operations are aligned with We aim to increase the amount of palm from farmer: covers all direct purchases our business principles and social and oil we can trace back to plantations from farmers. environmental commitments. We’ve that are independently assessed and made rapid progress on palm oil since verified against our Responsible Challenge: sustainable rural our traceability work began in 2010. Sourcing Guidelines, exceeding the communities. See our commitment By the end of 2012, we purchased 80% RSPO commitments. on page 47.

Nestlé in society 35 Water

The world is facing a fresh water these commitments. They will be crisis – linked to a growing global published during 2013 and will help us population, increasing prosperity shape Nestlé’s water strategy for the 217 and demographic shifts from next five to ten years. Clean drinking water projects in the South Asia region, helping to improve rural areas to “megacities”, to name The Nestlé Environmental access and sanitation for more than a few. Nestlé Chairman Peter Management System defines 100 000 school children Brabeck‑Letmathe has stated: approaches in which all Nestlé sites “If we go on like this, water will run and businesses can act to improve out long before oil.” their water efficiency and comply with Collective action relevant environmental legislation. Nestlé is a founding member of the UN Our approach Global Compact CEO Water Mandate The ongoing quality and availability of Public policy engagement and supports the use of internationally water is critical to life, the production of Our Chairman, Peter Brabeck‑Letmathe, consistent water measurement tools, food and our operations, so it’s essential regularly contributes to the public management processes and practices. that we play a full and active part in debate on water, through speaking We’re currently helping to develop a new helping to address the global water engagements and in public fora. He also standard, ISO 14046: Water Footprint – crisis. Water is covered by our Business launched a water blog in August 2012, Principles, Requirements and Guidelines, Principles and the Nestlé Policy on which we hope will stimulate further which should be completed by 2014. Environmental Sustainability. Our discussion on solutions to the water As a participant in the Alliance for W.A.T.E.R. commitments are focused challenge and its relationship to Water Stewardship, we’re helping to on using less water, improving water food supply and energy security. establish a voluntary certification efficiency, controlling the quality of Furthermore, Mr Brabeck serves as programme, which, when completed discharged water, actively promoting Chairman of the 2030 Water Resources in two years, will allow water managers better water practices in Nestlé and our Group – an innovative and neutral and water users to demonstrate supply chains and raising awareness on public‑private platform for collaboration compliance with a new International water conservation. on water, which engages in fact‑based Water Stewardship Standard. We’re currently developing additional analytical approaches to help countries Nestlé has contributed to the Carbon key performance indicators to help us achieve sustainable and comprehensive Disclosure Project’s Water Disclosure measure our performance towards water sector transformation. report every year since its launch in 2010. We received the highest score of any food producer in the Dow Jones Sustainability Index water‑related risk section this year.

Water use in our operations Water reduction and efficiency strategies are an essential part of our drive to improve environmental performance. We are also implementing programmes to reduce water withdrawal and discharges, reuse water and invest in water‑saving technologies. In 2012, we withdrew 138 million m3 of water, or 2.9 m3 per tonne of product, a 9% reduction compared to 2011. We’ve invested in a range of water‑saving initiatives throughout Lemuel Lisondra, waste water treatment plant operator, takes samples in the waste water 2012, including projects in Mexico, treatment plant at Nestlé’s Lipa factory in the Philippines. Spain, the United States and Uzbekistan.

36 Nestlé in society Creating Shared Value

We have run 489 water‑saving projects in our factories saving 6.5 million m3.

Water in our supply chain The biggest water use is not in our production operations but in the agricultural supply chain, so suppliers have a key role to play. We’re working with farmers and other suppliers to prioritise water efficiency through the Sustainable Agriculture Initiative at Nestlé (SAIN) and ran projects focused on water in several countries, including Australia, China, India, Nicaragua, Venezuela and Vietnam, in 2012. We’re identifying which of our supply chain partners operate in water‑stressed areas so we can focus our efforts better. We’ve also incorporated water In France, Nestlé Waters is colleagues in France have Agrivair: celebrating the 20th anniversary helped to make Agrivair one guidelines into our Responsible addressing of a successful environmental of the world’s largest private Sourcing Guidelines work, notably initiative that protects the natural protected areas. on sugar, but also on pulp and paper. water issues at sources of three of its most Across 10 000 hectares of a local level popular mineral water brands. protected land, farmers have Nestlé helped to launch the stopped using all artificial Community engagement “Agrivair” project back in 1992, fertilisation and pesticides, We share water supplies with to preserve the quality of the abandoned crops that create Vittel, Contrex and Hépar nitrogen pollution and introduced neighbouring communities and rely on springs in the Vosges water basin. crop rotation systems to improve them for our raw materials and in our Working diligently and in soil conditions. operations. Engaging with them to collaboration with the French With plans for future action National Institute for Agricultural to support biodiversity, including address water issues also supports our Research and many other systematic tree planting and CSV objectives by mutually benefiting specialists – including historians, the reshaping of a river, Agrivair Nestlé and the communities in which sociologists, economists, has provided Nestlé and our farmers, suppliers and consumers agronomists, animal technicians others with a valuable model and hydrogeologists – our for watershed conservation. live. Since 2007, we’ve worked with the International Federation of Red Cross Agrivair employee and Red Crescent Societies and the Red Olivier Petitjean and Nestlé Waters Cross Society of Côte d’Ivoire, to provide specialist water and sanitation facilities and Christophe Boursier hygiene training in Côte d’Ivoire to taking a water sample near Vittel, 100 000 people. France (top). We’ve also launched 217 clean Agrivair employee drinking water projects in the South Olivier Petitjean visiting farmers Asia region, helping to improving access near Vittel, France, and sanitation for more than to discuss farming 100 000 school children in village methods that avoid polluting ground schools across several countries. water (bottom). Challenge: water stewardship outside our factories. See our commitment on page 48.

Nestlé in society 37 Environmental sustainability

Nestlé depends on increasingly Environmental product life cycle withdrawal by 29% and direct constrained natural resources, We work with our stakeholders to use greenhouse gases by 24%, while so we’re helping to protect the natural resources efficiently, favouring increasing production volume by 53%. environment now and for future the use of sustainably‑managed Our on‑site energy consumption for generations – improving renewable resources and targeting zero 2012 was 90.7 petajoules, equivalent environmental efficiency in our waste. We use the Packaging Impact to 1.9 gigajoules per tonne of product – own operations and involving our Quick Evaluation Tool for the eco‑design a reduction of 4.7% compared to 2011. partners to continuously optimise of our packaging and the GEF (Global We completed 36 projects through our the environmental performance of Environmental Footprint) tool for bottled Energy Target Setting Initiative this year our products along the value chain. water, which is ISO 14064‑1 and (investing a total ISO 14040/44 certified. We have of CHF 82 million) saving circa

Our approach conducted Life Cycle Assessments 173 000 tonnes CO2eq. The Nestlé Policy on Environmental (LCAs) for all our product categories and We’re working to continuously Sustainability covers our whole value in 2012 we completed the development improve the performance of the safe chain. For our food and beverage and started the roll‑out of an Ecodesign natural refrigerants now in use at our business we’ve identified four priority tool called EcodEX, which we will use to installations, and also intensifying our areas: water; agricultural raw materials; assess and optimise environmental research into safe, environmentally manufacturing and distribution; and sustainability holistically across the entire sound refrigeration systems. packaging. Every Nestlé factory uses value chain. This will enable sustainability the Nestlé Environmental Management to be integrated at the earliest stage Packaging System, which is fully aligned with of the product development cycle and Packaging is crucial to prevent food ISO 14001:2004 – the International enable fact‑based decisions. waste, guarantee our quality standards Standard specifying requirements for and inform consumers. We optimise environmental management systems – Raw materials the weight and volume of our packaging to improve environmental performance, Nestlé transforms agricultural raw and, wherever commercially feasible, ensure compliance with all relevant materials into tasty, nutritious and manufacture it using recycled materials. requirements and enable our factories healthy food and beverage products. In 2012, our activities helped us to achieve ISO 14001:2004 certification. We’re working with farmers and others By the end of 2012, 418 factories were in our supply chain to grow, harvest and Resource consumption and waste certified to ISO 14001:2004. process these raw materials in more generation versus production environmentally efficient ways, through, for example, our responsible sourcing volume, 2002–2012 programmes including Farmer Connect Index (our programme to purchase direct from 150 farmers) and the Nestlé Supplier Code

(the non‑negotiable minimum standards 125 on use of natural resources); and also indirectly through activities such as the 100 Sustainable Agriculture Initiative at Nestlé (SAIN). During 2012, we ran SAIN projects in 46 markets, including Brazil 75 and Kenya; and facilitated workshops on related topics for suppliers. 50 2002 2004 2006 2008 2010 2012

Manufacturing Total production volume For many decades we’ve focused on Total water withdrawal making our own manufacturing sites Direct GHG emissions Nestlé UK’s FareShare partnership Total on‑site energy consumption simultaneously addresses food poverty more environmentally efficient. Since Total water discharge and food waste. 2002, we have reduced water Waste for disposal

38 Nestlé in society Sustainability

save 47.1 kilotonnes of packaging On target for material and in 2011 we used 27% of zero waste recycled materials in our packaging. For example, Le Bon Paris and Tendre Noix ham trays now contain 20% recycled materials.

Transport and distribution Distribution is a vital part of our business, delivering the products in highest quality and on time from the factory to customer. We continue to optimise distribution networks and route planning while exploring opportunities to improve transportation. For example, shifting from road to rail and sea Separating waste By the end of 2012, 39 Nestlé employees and contractors in shipping in Europe helped us save material for factories generated zero waste for waste strategy. Achieving zero around 5300 tonnes of CO2eq in 2011. recycling at Nestlé’s disposal – following our focus on waste has not only delivered water We’re also reducing energy consumption York factory, on natural resource efficiency and and energy savings, but also target for zero zero waste. created more space and reduced in warehouses and we are further waste for disposal. For example, our Tutbury transport costs. enhancing our assessment factory in the UK has achieved methodology, extending its coverage. zero waste status by introducing You can read more about our effective waste segregation zero waste strategy at www. systems and by training nestle.com/csv/2012/zerowaste Promoting sustainable consumption We’re improving environmental information about our products and Climate change packaging for consumers, while also supporting the development of better communication tools through forums such as the European Food Sustainable Consumption and Production Round Table. We continue to use new communications tools such as the Nescafé Life Cycle Assessment (LCA) communication tool.

Biodiversity Our Responsible Sourcing Guidelines (RSGs) incorporate safeguards on biodiversity, forest conversion and destructive harvesting, water Collecting By using energy more efficiently Carbon Disclosure Project Investor management and other aspects. This sustainably sourced and switching to renewable Programme and received the and other related topics form part of our woodchip samples sources, we reduced our direct highest score of any food producer forward commitments table at the back for testing as greenhouse gas (GHG) emissions in the Dow Jones Sustainability fuel sources in 2012 to 3.7 million tonnes Index climate strategy section. of this report; and you can read more in Challerange, of CO2eq, while our production online at www.nestle.com/csv. France. volume increased by 5.5%. Read the full story at In 2012, we ranked first for www.nestle.com/csv/2012/ Challenge: climate change. See our performance and disclosure in the climatechange commitment on page 48.

Nestlé in society 39 Compliance and human rights

At Nestlé we target full compliance Safety, Environment and Business with the laws and regulations of Integrity – audits at over 100 sites. each country in which we operate, 5 cases of critical or major 18 103 as well as with international non‑compliance were identified and Employees completing online human rights training tool in 2012 standards. Ultimately, compliance remedial action taken as a consequence. is the absolute foundation on which our CSV activities are built on. It is Responsible advertising and needs of their markets. the necessary condition for our marketing Throughout 2012, we’ve worked to engagement with society. Nestlé supports responsible improve Nestlé retailers’ and Above all, to create trust, advertising and marketing to children distributors’ compliance with our Nestlé we must adhere to our own as a signatory to the International policy based on the World Health commitments. The Nestlé Corporate Food and Beverage Alliance (IFBA) Organization Code of Marketing of Business Principles (NCBP), based global policy on marketing Breast Milk Substitutes, putting on recognised international communication and advertising to compliance clauses in our contracts and standards, treaties and initiatives children under 12 years of age. providing both advice on distribution including the ten principles of the Additionally, Nestlé supports the and training. We’ve reinforced United Nations Global Compact, EU Pledge, a voluntary initiative by guidelines governing the way our underpin all our policies, standards leading food and beverage companies products are displayed in pharmacies and regulations. to change the way they advertise to and welcomed external auditors into children. Results from the 2012 third our operations at our global Monitoring compliance party monitoring report show a 73% headquarters in Vevey and in high‑risk We monitor compliance with some of decline in advertising of products that countries, such as Ukraine, Argentina, our NCBPs and our support for don’t meet EU Pledge Companies’ Morocco and Laos. As a result of our international conventions on human criteria in programmes targeted at management systems for WHO Code rights, not just through our internal children. Our overall EU Pledge Compliance, refined over many years, auditors but through our CARE audit compliance rate in 2012 was 98.5% we are the only manufacturer of infant programme. In 2012, external parties for TV and 100% for print and online. formula included in the FTSE4Good completed independent CARE – Finally, some countries have their own Socially Responsible Investment index. Compliance Assessment of Human pledges that complement the existing Resources, Occupational Health & global commitment and also meet the Product safety and quality Our Nestlé Quality Management System (NQMS) ensures we keep our commitments on quality and food safety. Our global compliance rate with the NQMS was 93% in 2012. We’re working to voluntarily lower the levels of compounds of potential concern in raw materials and products. We’re also running “good practice” initiatives with farmers and suppliers across Europe.

Anti‑corruption During the year, no public allegations of corruption were made against Nestlé or our employees. We have engaged in extensive training efforts, and Nestlé employees can raise concerns about corruption and other ethical issues Training retailers in WHO Code compliance in the Philippines. through our Integrity Reporting system.

40 Nestlé in society Compliance

discussions on business and human rights. During 2012, approximately 18 103 employees completed our online human rights training tool, bringing the total number of participants in human rights training to approximately 27 922 employees across 55 countries.

Risk and impact assessments We carried out Human Rights Impact Assessments with the Danish Institute for Human Rights this year in Russia, Uzbekistan and Kazakhstan, which have enriched our understanding at a national level. An impact assessment completed with the Fair Labor Association, of which we are an official affiliate, in Côte d’Ivoire also helped us understand potential human rights issues in our In 2011, Nestlé became the first independent assessment of our cocoa supply chain. Working in food company to partner with the cocoa supply in Côte d’Ivoire, partnership Fair Labor Association (FLA), a where we source most Safety and health non‑profit, multi‑stakeholder of our cocoa. We are now to tackle association. We have asked FLA working to develop sustainable, Safety and Health is of the highest child labour to help us assess the risk and multi‑stakeholder solutions that priority to Nestlé. During 2011 and 2012, incidence of child labour in our ensure we meet our new Nestlé we enhanced our health and safety supply chains – initially focusing Commitment on Child Labour Nestlé agronomist on hazelnut production in Turkey. in Agricultural Supply Chains strategy by developing a new “Roadmap Frédéric Oura This year we started implementing without jeopardising our farmers’ Towards Excellence”. We will continue discusses a an Action Plan based on their livelihoods in the long‑term. to roll‑out the strategy in 2013. pictorial version of recommendations. This will lead Nestlé’s Supplier to the sourcing of 100% of You can read more We achieved a 5% improvement in Code with an Turkish hazelnuts from transparent about our work with the Fair Total Recordable Injury and Illness Ivorian cocoa supply chains by 2014. During Labor Association at Frequency rate (TRIFr) during 2012. farmer. 2012, the FLA conducted an www.nestle.com/csv/2012/fla However, our Lost Time Injury & Illness Frequency rate (LTIFr) deteriorated and was 6% higher than in 2011. Five Nestlé and human rights to lead by example, introducing our individuals lost their lives while working The NCBP incorporates the ten UN Nestlé Commitment on Child Labour at Nestlé in 2012 (this compares with Global Compact Principles and we in Agricultural Supply Chains and 18 in 2011). We deeply regret these recognise our “Corporate Responsibility developed our Rural Development fatalities and are committed to doing to Respect Human Rights”, outlined in Framework, which focuses on social everything we can to prevent similar the UN Framework and Guiding and human rights. incidents in the future, in particular Principles on business and human rights. through improvements to our Safe We’re committed to the Universal Bill of Engaging stakeholders on Driving programme and to our Capital Rights and the Core Conventions of the human rights Project Management process. Other International Labour Organization (ILO). We’ve participated in the broader programmes address other aspects of We integrate human rights into all conversation around human rights our working conditions. aspects of our business using an as a LEAD member of the UN Global extensive monitoring system and report Compact, through its Human Rights Challenge: child labour in our transparently on this issue. During 2012, Working Group and Supply Chain supply chain. See our commitment we’ve demonstrated our determination Advisory Group, and during broader on page 48.

Nestlé in society 41 Engaging with stakeholders

Nestlé’s network of stakeholders – The 2012 CSV Forum, co‑hosted convenings were no exception. In including those who we talk in New Delhi, India, with the Federation particular, we learned that Nestlé’s to on a regular basis as part of our of Indian Chambers of Commerce stakeholders want us to: day‑to‑day operations, and indeed and Industry (FICCI), included more • use our knowledge, scale and those who are touched by our than 400 representatives in the audience marketing power to make a positive activities – is vast. Stakeholders – and thousands on line from all impact on our consumers and to scale ranging from consumers, customers stakeholder groups. The Forum brought up solutions; and suppliers, to the investor together opinion leaders to discuss • examine where we should compete to community, employees, fundamental issues such as the role drive innovation and change, and where governments and multi‑lateral of business in society, nutrition, water we should collaborate to drive scale; agencies, non‑governmental and rural development particularly • set more ambitious goals for other organisations (NGOs), civil society, in South Asia. Opinion leaders from CSV focus areas; as well as academia – are all South Asia and beyond discussed how • be more open about the problems we important to our continuing governments worldwide can work are facing with increased transparency business success and to our ability with civil society and business to boost about the journey we are taking; and to Create Shared Value. Without long‑term sustainable economic • work and align more closely productive, open and collaborative development. All the sessions were with governments, particularly on relationships with them, we would webcast and are available to watch nutrition issues. neither survive nor thrive. on demand on our CSV forum web page The outputs of the convenings www.nestle.com/csvforum2012. are fed back to senior management Aside from day‑to‑day engagement In addition, more focused and will be taken into account in our across our markets, we hold a number stakeholder convenings were held in strategies and actions for 2013. of formal stakeholder events and London and Nairobi. Indepedently They have already been incorporated consultations. These form an important facilitated by SustainAbility, over into the new Rural Development part of our engagement activities and 60 external stakeholders from Commitment (part of the Rural include our annual Creating Shared multi‑lateral agencies, NGOs, national Development Framework, see page 34). Value Forum, two stakeholder governments, farmer associations and Feedback from the convenings has convenings and an anonymous online academia attended. The process is also led to our partnership with the Fair stakeholder community survey. always insightful and the past year’s Labor Association.

The 2012 Nestlé Creating Shared Value Forum in New Delhi.

42 Nestlé in society Material issues

In simple terms, materiality is about Company and its stakeholders. The issues that are most material to Nestlé identifying the issues which pose rigorous approach adopted by this in its Nestlé in society: Creating Shared risks or present opportunities to year’s materiality analysis included Value reporting. Nestlé, balanced against the issues opinion leader reputation research, Several new issues have been which our external stakeholders are syndicated sustainability expert and added to the materiality analysis, based most concerned by. consumer surveys, feedback from on feedback from key stakeholders, stakeholder convenings, an extensive including: biotechnology, For several years, Nestlé has worked media scan, an internal business impact nanotechnology, land rights and with SustainAbility, to prioritise the survey, and Nestlé’s corporate risk map. acquisition, executive compensation, issues that are most important to the The materiality matrix below shows fair taxes and security.

2012 materiality analysis Business integrity/anti‑corruption Product safety Infant formula marketing Packaging Public policy, advocacy and lobbying Food security Responsible marketing to children Product innovation and renovation Climate change mitigation to address over‑/under‑nutrition Deforestation Water usage and conservation Nutritional literacy and communication Child labour Internal human rights in high‑risk countries Responsible sourcing Supplier human rights Labour relations

Executive compensation* Consumer privacy Governance, transparency Increasing concern to stakeholders concern Increasing Land rights/acquisition* Fair taxes* and accountability Air and water pollution* Energy consumption Biodiversity Community engagement Biofuels Local economic development Climate change adaptation Sustainable agricultural livelihoods Food waste Life cycle impacts of products Manufacturing waste and recovery Animal welfare

Biotechnology* Soil fertility Employee benefits, remuneration, Nanotechnology* Transport and distribution attraction, retention Diversity Employee engagement Internal human rights in low‑risk countries Employee training and learning Health and safety Workplace wellness

Compliance Increasing or current impact on Nestlé Environmental sustainability Nutrition Water Rural development Responsible sourcing Our people * Indicates new issue for 2012

Nestlé in society 43 Healthy eating for two: twins Keyla and Kysha Zaleth Congo Delgado at the Escuela Ana Luisa Leoro school in Ibarra, Ecuador taking part in Nestlé’s “Nutrir” Healthy Kids Programme.

44 Nestlé in society Meeting our commitments

The previous two sections have shown how At present we have a number of specific Nestlé aims to be world’s leading Nutrition, short‑term and longer-term commitments in Health and Wellness Company and create shared place at group level, many in the form of value in nutrition, water and rural development corporate policies, and we have developed key while protecting the environment in which performance indicators for many of them. These it operates. To support our aims we are making are listed in the table on the inside front cover. selected forward‑looking commitments in this All of our commitments are built around the final section of our report. We believe sharing our Nestlé Corporate Business Principles. Those commitments is important for several reasons. related to CSV are continuously refined through Communicating our policies and commitments engagement with our stakeholders and our year‑on‑year, or over the medium to longer term, CSV Advisory Board. can help us progress systematically, by providing Specifically in nutrition, we take our a focus for all involved. Commitments also help commitment to enhance the quality of consumers’ us to assess our progress; and most importantly, lives very seriously. We are proud of what we’ve to share our progress with stakeholders. achieved so far but have even bigger ambitions Our commitments also demonstrate our intent for the future, with work underway on many to stakeholders and provide them with a means fronts designed to accelerate our contribution to hold us accountable for both our achievements to quality of life enhancement. Watch this and shortcomings. We welcome this level of space as we’ll share more details over the next transparency, which actually incentivises us to 18 months. Here, as in all our Nestlé in work even harder to achieve continuous society dimensions, we are committed to improvement in our CSV, environmental continuous improvement, and will report on sustainability and compliance performance. But our performance every year. We provide we do not ever wish to use commitments as a updates about our CSV, environmental replacement for actual performance for it is the sustainability and compliance performance, continuous improvement in our performance that and publish relevant case studies throughout matters most to us. the year at www.nestle.com/csv.

Nestlé in society 45 Topic How Progress Future

Nutrition Improving the nutrition profile of our products Provide nutritionally Nestlé Nutritional Profiling System/ 2012 2014 sound products Nestlé Nutritional Foundation criteria, 89% children’s products (sales value) 100% children’s products (sales value) designed for children and Nestlé Children’s Healthy meeting all Nestlé Nutritional meeting all Nestlé Nutritional Growth Strategy (see page 14) Foundation criteria for children Foundation criteria for children Help reduce risk of Nestlé Micronutrient Fortification 2012 2016 under‑nutrition Policy (2000, updated 2011) Over 150 billion micronutrient‑ fortified 200 billion servings worldwide, through servings worldwide per annum with a special focus on children micronutrient and women of child‑bearing age fortification Nestlé Biofortification Programme: 2012 2015 sourcing conventionally‑bred 8 conventionally‑bred staple crops Launch biofortified products in key staple food crops which are biofortified with zinc/iron/pro‑vitA markets as a complement to direct biofortified with essential vitamins in development by R&D Abidjan and fortification and minerals in order to promote Singapore their planting and consumption by rural populations in developing countries Reduce salt in our Nestlé Policy on Salt 2012 2014 products (2005, updated 2012) 90% of children’s products (sales 100% of children’s products (sales value) meeting the Nestlé Nutritional value) meeting the Nestlé Nutritional Foundation sodium criterion Foundation sodium criterion 2011 2015 Our culinary and breakfast cereal further 10% reduction in other recipes contained 12 500 tonnes relevant products less salt than in 2005 Reduce sugars in our Nestlé Policy on Sugars 2012 2014 products (2007) 90% of children’s products (sales 100% of children’s products (sales value) meeting the Nestlé Nutritional value) meeting the Nestlé Nutritional Foundation sugars criterion Foundation sugars criterion 2011 2015 9000 tonnes less sugars in breakfast Less than 9g of total sugars in cereals overall vs. 2003 any serving of children’s or teen’s breakfast cereals Reduce saturated fats Nestlé Policy on Saturated Fats 2012 2014 in our products (2009) 90% of children’s products (sales 100% of children’s products (sales value) meeting the Nestlé Nutritional value) meeting the Nestlé Nutritional Foundation saturated fats criterion Foundation saturated fats criterion Reduce trans fats in Nestlé Policy on TFAs 2012 2013+ our products (2003) 99% of all existing products comply Apply Nestlé Policy on TFAs to all with Nestlé Policy on TFAs products, including newly acquired businesses Help increase Nestlé adding whole grains to 2012 2015 consumption of breakfast cereals Breakfast cereals with Green More whole grain than any other whole grains Banner on pack contain at least ingredient in any serving of children’s and vegetables, 8 g whole grains per serving or teen’s breakfast cereals including via healthier Nestlé promoting vegetable 2012 2015 home cooking consumption via teaching home Maggi Cooking Lesson Programme Maggi Cooking Lesson Programme cooking and healthy meal structure on‑going in 8 countries on‑going in 30 countries 2012 2015 65% of Maggi product portfolio 90% of Maggi product portfolio worldwide promoting home cooking worldwide promoting home cooking and meals with vegetables and meals with vegetables

46 Nestlé in society Topic How Progress Future

Information Deliver nutrition Nestlé Standard on Nutritional 2012 2016 information and Compass Labeling 96.8% (sales value) of all relevant Provide further product advice on all our (2005, updated 2011) products worldwide featuring information and nutrition advice, labels the Nutritional Compass via QR codes on‑pack Nestlé Standard on Nutrition/GDA 2012 2016 Labeling (2006, update 2013) 46.3% (sales value) of all relevant 100% (sales value) of all relevant products worldwide with GDA products worldwide with GDA labeling on front of pack labeling on front of pack 2016 Introduce GDAs based on children’s reference values on all products designed for children where regulations allow

Services Provide portion Nestlé Portion Guidance initiative: 2012 2015 guidance making the right size and CHF 26.2 billion sales of products Portion Guidance on 100% of frequency of consumption as with specific guidance children and family products, i.e. intuitive as possible (launched 2011) more than double sales coverage Promote healthy diets Nestlé Healthy Kids Programme: 2012 2015 and lifestyles/physical teaching schoolchildren about Programme on‑going in 64 countries, Programme on‑going in activity healthy diets and active lifestyles, with 5.4 million children reached 80 countries, with activation in partnership with appropriate of IAAF Kids’ Athletics stakeholders (launched 2009) Promote healthy Nestlé Healthy Hydration Programme: 2012 2014 hydration promoting adequate water Research on children’s hydration Fact‑based healthy hydration consumption as part of a healthy status in five countries with different awareness programme targeted balanced diet, with a special focus on drinking habits/climates and scientific at healthcare professionals, children (launched 2010) publications in preparation caregivers and parents worldwide

Rural development and responsible sourcing Roll‑out Rural Development of framework Framework in place and By 2015 baseline assessments in Development covering farmers, farm workers Commitment document published place in 21 emerging economies of Framework and communities (December 2012) key importance to our business that show pronounced social need Roll-out Nestlé Cocoa By enabling farmers to run 2012 2013 Plan profitable farms, eliminating 27 000 farmers trained; 60 000 tonnes cocoa; child labour while developing 1.1 million plants propagated; 8 coops certified; a sustainable supply chain for Fair Labor Association Report; Roll‑out of child labour monitoring Nestlé cocoa 13 schools built or refurbished; and remediation to a further 6 coops; More than 46 000 tonnes of Cocoa 10 schools built or refurbished; Plan cocoa At least 20 000 farmers trained 2015 100 000 tonnes cocoa; Completion of WCF programme “40 schools in 4 years” Roll‑out Nescafé Plan Focus on sustainable consumption, 2012 2015 production and manufacturing More than 133 000 tonnes sourced Source 180 000 tonnes from Farmer from Farmer Connect Connect, 100% in line with 4C baseline Membership of Common Code for sustainability standard Coffee Community (4C) More than 48 000 farmers trained 2020 Partnership with Rainforest Alliance 22.5 million coffee plantlets Source 90 000 tonnes SAN compliant distributed coffee and distribute 220 million coffee plantlets Implement Nestlé Supplier Code 2261 audits of First Tier suppliers 2015 responsible sourcing Complete 10 000 responsible Nestlé Responsible Sourcing and Responsible Sourcing Guidelines for and traceability sourcing audits Traceability Programme palm oil, paper, sugar, soya, vanilla, seafood 2013 Partnerships with third parties Achieve 100% RSPO certified Partnerships with TFT, Conservation sustainable palm oil, two years ahead International, Proforest of our public commitment

Nestlé in society 47 Topic How Progress Future

Water Improve water The Nestlé Policy on Water withdrawals down 29%, By 2015, reduce direct water efficiency Environmental Sustainability 2002 to 2012 withdrawal per tonne of product by 40% vs. 2005 Improve water Nestlé Commitments on Water (2006) Water discharges down 45%, stewardship outside 2002 to 2012 Revised Commitment document Nestlé Environmental factories to be published 2013 Management System

Environmental sustainability Improve resource The Nestlé Policy on 2012 By 2015, 10% of Nestlé factories efficiency Environmental Sustainability 39 factories generating zero waste with zero waste for disposal Nestlé Environmental By 2015, reduce energy consumption Management System Ecodesign tool roll‑out initiated per tonne of product by 25% vs. 2005 Life Cycle Assessment (LCA) Improve The Nestlé Policy on 47.1 kilotonnes of packaging material Transition to a broader holistic Value environmental impact Environmental Sustainability saved by weight 2012 Chain approach using EcodEX of our packaging Packaging Impact Evaluation Tool 4000 projects and more than (PIQET) 13 000 scenarios evaluated Assess and optimise The Nestlé Policy on LCA completed in all main product By 2013, roll‑out of EcodEX to all the environmental Environmental Sustainability categories Product Technology Centres impact of products New Ecodesign tool EcodEX covering Systematic sustainability assessment the entire value chain in new product development Initial Nestlé Sustainability Category Profiles (SCP) established and communicated Initial roll‑out of EcodEX Food database under development Provide climate The Nestlé Policy on Direct GHG emissions declined 24% By 2015, reduce direct GHG emissions change leadership Environmental Sustainability between 2002 and 2012 while per tonne of product by 35% production increased 53% vs. 2005 resulting in an absolute Commitment on Climate Change reduction of GHG emissions At end of 2012 9.3% of direct energy Commitment on Deforestation and from renewable sources Forest Stewardship (2011) Better dairy farm practices Top company – all sectors combined – in Carbon Disclosure Project 2012 Preserve natural Responsible Sourcing Guidelines Commitment on Natural Capital RSGs for milk, coffee and cocoa capital palm oil (2010) (2012) Annual reporting on progress Assessment of factory locations Assessment of biodiversity key issue and biodiversity (2011) areas and Nestlé responses (2012) Responsible Sourcing Guidelines on sugar, soya, paper, vanilla and seafood (2012) Dairy business RISE tool roll‑out No deforestation Commitment on Deforestation and Responsible Sourcing Guidelines for Roll‑out of further RSGs (milk, Forest Stewardship (2011) Forest Based Materials (2012) coffee, cocoa) Top food company in Forest Footprint Annual reporting on progress Disclosure Project 2012

Human rights and compliance Assess and address Nestlé Corporate Business Principles 2010–2012 2015 human rights impacts 7 Human Rights Impact All significant FTSE4Good UN Global Compact Principles Assessments completed countries of concern covered Partnership with the Danish Institute and employees trained 2011–2012 of Human Rights 27 922 employees trained on human rights Eliminate child labour Membership of Fair Labor Action plans developed and Roll‑out to further commodities Association being implemented in cocoa, and countries hazelnuts and vanilla

48 Nestlé in society © March 2013, Nestlé S.A., Public Affairs

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Concept and writing Nestlé S.A., Public Affairs, with Radley Yeldar and SustainAbility

Visual concept and design Nestec Ltd., Corporate Identity & Design, with Esterson Associates

Photography Nana Kofi Acquah, Markus Bühler-Rasom, William Daniels/Panos Pictures, Sanjit Das/Panos Pictures, Sam Faulkner/NB Pictures, Harmen Hoogland, Evan Hurd, Ivan Kashinsky, Gilles Leimdorfer/Interlinks Image, Karen Robinson, Daryl Visscher

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