Good Food, Good Life

Creating Shared Value and meeting our commitments 2018

Progress report

Nestlé. Enhancing quality of life and contributing to a healthier future Creating Shared Value Individuals and families Communities Planet Reporting and governance

Welcome to this 2018 Creating Shared Value progress report. Aimed at shareholders, stakeholders and other interested parties, this report shares detailed information about our issues, impacts 3 Creating Shared Value and performance against our commitments during the year. 5 Our 2020 commitments and progress Nestlé. Enhancing quality of life and contributing to a healthier future. 6 For individuals and families

7 Offering tastier and A message from our Chairman and CEO healthier choices 13 Inspiring people to At Nestlé, we believe that business diversity and inclusion within our lead healthier lives results and positive societal impact company is another example. We should be mutually reinforcing. are accelerating our efforts in this 21 Building, sharing and applying nutrition knowledge To be successful in the long term, area with a particular focus on we must create value for both increasing the number of women in 24 For our communities our shareholders and for society. senior executive positions globally. 25 Enhancing rural development We call this approach to business and livelihoods Creating Shared Value and it is When it comes to addressing an integral part of our strategy. global sustainability challenges, 31 Respecting and promoting human rights one of our key ambitions is to lead Improving the nutrition, health and the way in shaping a waste-free 36 Promoting decent employment wellness profile of our foods and future. We are committed to and diversity beverages is at the heart of what making our packaging 100% 40 For the planet we do. We want to contribute to recyclable or reusable by 2025, and healthier lives, with a particular have already taken specific action 41 Caring for water emphasis on childhood nutrition. on this initiative earlier this year. 46 Acting on climate change Our Nestlé for Healthier Kids 49 Safeguarding the environment initiative brings together all our As in previous years, we reaffirm efforts – from product our support for the UN Global 55 Reporting and governance reformulation to supporting Compact. As a founding member 56 About this report parents and caregivers. of UN Global Compact LEAD, we recognize the importance of this Paul Bulcke Mark Schneider 57 Independent assurance We are also driven to positively platform for driving corporate Chairman Chief Executive Officer statement contribute to the communities sustainability leadership and 58 Our key performance indicators where we live and work. Our Global collective engagement toward the Youth Initiative is just one of the 2030 Agenda for Sustainable many ways we make an impact. Development. We have expanded our efforts here to address youth unemployment We welcome your feedback on this and help 10 million young people report, our commitments and our access economic opportunities by performance. 2030. Our commitment to foster

Creating Shared Value progress report 2018 2 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Creating Shared Value Creating Shared Value (CSV) is fundamental to how we do business at Nestlé. We believe that our company will be successful in the long term by creating value, both for our shareholders and for society. Our activities and products should make a positive difference to society while contributing to Nestlé’s ongoing success.

Focus on key areas To better connect financial with non-financial value creation and Long‑term value creation requires reporting, we worked with Ernst & focus. In consultation with experts, Young (EY) and Valuing Nature to we chose to prioritize the three conduct an impact assessment to areas where our business intersects calculate the societal and business the most with society: nutrition, value generated by our Global Youth rural development and water. Value Initiative (GYI). Launched in 2017, the creation is only possible with a solid GYI is expected to create 10 million foundation of compliance and a economic opportunities for young culture of respect, as well as a firm people over the next decade. The commitment to environmental study revealed that the initiative and social sustainability. Our generated a positive business return impact on these focus areas is on investment, and an even higher measured by progress against societal return. More details on the publicly stated commitments, results and methodology have been which are informed by our published on our website. materiality assessment and regular feedback from external groups. This impact valuation methodology has been peer-reviewed by FSG The business case for and continues to be refined Creating Shared Value through application to other We cannot maximize long-term projects. We are currently sustainable value creation for conducting an impact valuation of shareholders at the expense of our Caring for Water initiative. other stakeholders. We believe that societies will not support a business We also participated in the work that harms our communities and of the Embankment Project for overall sense of well-being. Creating Inclusive Capitalism (EPIC), which Shared Value helps ensure that we aims at shaping the broader remain relevant with consumers. conversation on long-term value creation.

Read more about CSV

Read more about our reporting and governance Creating Shared Value progress report 2018 3 Creating Shared Value Individuals and families Communities Planet Reporting and governance

process, harnessed the Focusing on our Natural resource and water stewardship Supply chain stewardship perspectives of mainstream Climate change Over- and under-nutrition material issues investors, and involved key markets The materiality process and growth categories. Materiality is about identifying Major This was our first materiality the issues that matter most to exercise since switching from the our business and our stakeholders. Global Reporting Initiative (GRI) G4 Every two years, we plot Guidelines to the GRI Standards. Food and product safety the economic, social and Women’s empowerment Rural development and poverty alleviation We worked with DNV GL, an Community relations Human rights Changing consumer demographics and trends environmental issues that are of Business ethics Product packaging and plastic independent organization, to most concern to our external Responsible marketing and influence conduct the assessment using a Product quality stakeholders against those that formal materiality process to ensure Food and nutrition security pose risks or present opportunities Significant Resource eciency, (food) waste and alignment with the GRI Standards. the circular economy to Nestlé. Conducting a thorough Land management in the supply chain materiality analysis in this way not The issues identified were placed only helps us to identify issues we Importance to stakeholders Animal welfare Product regulation and taxation on a matrix, their position relative to need to cover in our reporting, but Employee safety, health and wellness Geopolitical uncertainty the degree of stakeholder interest Decent employment and equal opportunities Responsible use of technology also helps us to decide where to and potential business impact. Data privacy and cyber security focus our internal resources. These results represent the material issues facing our business. The Moderate Our 2018 materiality issues should not be viewed in assessment isolation; they are increasingly For 2018, the materiality process interconnected, and oftentimes Moderate Significant Major was evolved to bring both changes in one can have an impact Impact on Nestlé’s success nonfinancial and financial risk on others. identification together and to For individuals and families For our communities For the planet connect it more closely to business operations. In addition to identifying and prioritizing issues from internal and external How we map our material issues across our value chain stakeholders, the 2018 materiality assessment integrated with the How we map our material Enterprise Risk Management issues to the UN SDGs

Creating Shared Value progress report 2018 4 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Our 2020 commitments and progress Status of our commitments New In progress Achieved

For individuals Our 2030 ambition For our Our 2030 ambition is to For the planet Our 2030 ambition is to help 50 million improve 30 million is to strive for zero and families children lead communities livelihoods in communities Stewarding resources environmental impact Enabling healthier healthier lives Helping develop directly connected to our for future generations in our operations and happier lives thriving, resilient business activities communities

Offering tastier and Inspiring people to Building, sharing and Enhancing rural Respecting and Promoting decent Caring for water Acting on Safeguarding healthier choices lead healthier lives applying nutrition development and promoting employment climate change the environment knowledge livelihoods human rights and diversity

Launch more foods Apply and explain Build and share Improve farm Assess and Roll out our Nestlé Work to achieve Provide climate Improve the and beverages that are nutrition information on nutrition knowledge economics among the address human rights needs YOUth initiative water efficiency and change leadership environmental nutritious, especially for packs, at point-of-sale from the first 1000 days farmers who supply us impacts across our across all our operations sustainability across our performance of our mothers-to-be, new and online through to healthy aging business activities operations Promote packaging mothers, and infants Improve food Enhance gender transparency and and children Offer guidance on Build biomedical availability and dietary Improve workers’ balance in our workforce Advocate for proactive, long-term Reduce food loss portions for our products science leading to diversity among the livelihoods and and empower women effective water policies engagement in and waste Further decrease health-promoting farmers who supply us protect children in across the entire value and stewardship climate policy sugars, sodium and Leverage our products, personalized our agricultural chain Provide meaningful saturated fat marketing efforts to nutrition and digital Implement supply chain Engage with and accurate promote healthy cooking, solutions responsible sourcing in Advocate for suppliers, especially environmental Increase eating and lifestyles our supply chain and Enhance a culture healthy workplaces and those in agriculture information and dialogue vegetables, fiber-rich promote animal welfare of integrity across the healthier employees grains, pulses, nuts and Empower parents, organization Raise awareness Preserve natural seeds in our foods and caregivers and teachers Continuously on water conservation capital beverages to foster healthy improve our green Provide effective and improve access to behaviors in children coffee supply chain grievance mechanisms water and sanitation Simplify our to employees and across our value chain ingredient lists and Support Roll out the Nestlé stakeholders remove artificial colors breastfeeding and Cocoa Plan with cocoa protect it by continuing farmers Address to implement an under-nutrition through industry-leading policy micronutrient to market breast-milk fortification substitutes responsibly

Inspire people to choose water to lead healthier lives

Partner for promoting healthy food environments

Creating Shared Value progress report 2018 5 Creating Shared Value Individuals and families Communities Planet Reporting and governance

For individuals and families Enabling healthier and happier lives

2030 Ambition To help 50 million children lead healthier lives.

Nestlé for by rigorous research, which we • Inspiring people to lead Healthier Kids share with members of the health healthier lives: Adopting good reached 29 million and nutrition communities nutrition and hydration habits worldwide. from an early age is essential to children in 2018 children’s development. Our Nestlé for Healthier Kids programs help parents and It’s never too early to build healthy educators improve nutrition Food is not only a source of eating habits. Officially launched in knowledge, promote home nutrition, it is vital to our social 2018, Nestlé for Healthier Kids is our cooking and encourage active fabric. In every country, in flagship initiative for children and lifestyles (pages 12–20). every culture, food brings families. It brings together all our people together. However, the • Building, sharing and applying efforts, from product reformulation way we consume food, and the nutrition knowledge: Nestlé for to innovative nutrition and lifestyle kind of food we eat, has Healthier Kids activities are built services for parents and become a contributing factor to on scientific evidence, including caregivers. Our ambition is to help the public health challenges we our studies into the eating habits 50 million children lead healthier face today, such as obesity and and nutritional intake of infants lives by 2030. other forms of malnutrition, as and children. We also aim to recognized by the World Health • Offering tastier and healthier understand, treat and help Organization (WHO). In choices: We are committed to prevent a range of medical addition, consumer food habits delivering more nutritious conditions by leveraging are changing. In line with these products to kids and families by nutrition and life sciences evolving issues, we are reducing sugars, sodium and (pages 21–23). transforming our products, saturated fat in our products, making them healthier and adding fiber-rich grains, Read more online natural, to enhance quality of vegetables and micronutrients, life and contribute to a healthier and phasing out artificial future. Our work is supported ingredients (pages 6 –11).

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Why it matters Our contribution Around the world, about 2 billion people lack The UN Sustainable Development Goals (SDGs) essential micronutrients in their diet (Global present a unique opportunity for tackling the Nutrition Report). Our own studies strengthen underlying causes of malnutrition on a global existing, independent evidence that children scale. We are contributing to the goals by around the world don’t consume enough whole working with partners to help address all forms grains or vegetables, or have sufficient calcium of malnutrition and encourage healthy diets. and vitamin D in their diets. The elderly and To do so, we’re continuing to develop and people living with severe intolerances are also launch more nutritious foods and beverages vulnerable to poor nutrition. as well as more sustainable products, simplify ingredient lists and remove artificial colors, Millions of people overconsume foods and while adding micronutrients where they are beverages high in sugars, salt and fat, deficient in local populations. We are also contributing to a rapid rise in noncommunicable committed to reducing the amount of sugars, diseases such as type 2 diabetes and obesity. sodium and saturated fat in our products, in line On the other hand, demand for organic products with WHO recommended intake levels. without artificial colors and flavors is growing, Offering tastier and as is the market for vegetarian options and We want to make a meaningful impact and to healthier foods. move fast to get healthier versions of existing products on the shelf and to the consumer. healthier choices However, we have to take the time to get it right. If the new, healthier version doesn’t taste good, Our commitments to offering Addressing the public health issues of consumers will simply buy a less nutritious tastier and healthier choices under-nutrition and obesity or being alternative that better suits their tastes. p.8 Launch more foods and beverages overweight at a global scale requires that are nutritious, especially for governments, health authorities, civil mothers-to-be, new mothers, society and the private sector to work and infants and children together. To that end, we use our R&D p.9 Further decrease sugars, sodium and saturated fat network, our expertise and our brands p.10 Increase vegetables, fiber-rich to help address malnutrition in all its grains, pulses, nuts and seeds in forms, creating nutritious options that our foods and beverages are also tasty and convenient, to support p.11 Simplify our ingredient lists and a healthy diet. remove artificial colors p.12 Address under-nutrition through Our work on offering tastier and healthier choices micronutrient fortification contributes to the following SDGs:

How we map our material issues to the UN SDGs

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Launching more nutritious products Our commitment: Launch more foods and beverages that are nutritious, especially for mothers-to-be, new mothers, and infants and children.

Making nutrition affordable Ensuring quality nutrition Why it matters Progress against our objectives Income level should not determine for babies Nestlé was founded on a promise whether someone can or can not In Europe, we launched NaturNes to deliver nutritious food to those By 2020: In both developed and enjoy nutritious food. We’ve Bio in 2018, a new generation of developing countries, design and launch who need it. Today, that spirit is launched a range of popularly baby foods that delivers better foods and beverages that address the reflected in our goal to transform daily nutritional needs and key nutritional positioned products to enable nutrition and taste. Made with our recipes, making it easy for gaps of infants, children up to age 12, consumers at all income levels to organic ingredients, the NatureNes new mothers and mothers-to-be. people around the world to access quality food that provide range (including carrots, spinach), In progress Over 1300 new consume healthy, affordable and nutritional value at an affordable uses a unique steam cooking products were launched in 2018 tasty foods and beverages. price and portion size. addressing specific nutritional needs process that helps preserve and gaps of babies, children, expecting nutrients and flavor. Recipes take women or new mothers. What we are doing Meeting the nutritional needs into account the right balance of of the next generation micronutrients, the quality of Meeting demand In Latin America, we expanded our In 2018, we launched over 1300 essential fatty acids, and for flexitarian and range of nutritional products new nutritious products for babies, potentially allergenic ingredients vegetarian diets through the acquisition of food children, expecting women or new and other ingredients that could be company Terrafertil. Its flagship The demand for plant-based mothers. We also transformed harmful to a baby’s fragile system. brand, Nature’s Heart, provides foods is increasing. To satisfy existing products, adding more healthy, plant-based natural snacks that need, we’ve created new vegetables, whole grains, milk, lean Read more about product that are good sources of vitamins quality and safety products such as Coffee-mate proteins, and essential vitamins and iron. Meanwhile, following Natural Bliss creamers, Lean and minerals. By total sales, 82.5% 30 years of research, Nestlé has Cuisine plant-based meal of our foods and beverages now achieved a new scientific 82.5% of all options and our Garden have Nestlé Nutritional Foundation breakthrough to develop an infant Nestlé products, Gourmet range in Europe and (NF) status, up from 82.1% in 2017, formula containing human milk the Middle East. including 93.1% of our products including 93.1% of those oligosaccharides, which are key consumed by children (compared consumed by children, components of breast milk. Read more about our with 92.5% in 2017). have achieved NF status Garden Gourmet case study

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Reducing sugars, sodium and fat Our commitment: Further decrease sugars, sodium and saturated fat.

Why it matters in public health-sensitive nutrient sugar and sweetness. We are also reduction. In both adults and helping to change consumer tastes, Progress against our objectives Overconsumption of sugars, children, WHO recommends offering popular ready-to-drink sodium and saturated fat can By 2020: Reduce the sugars we add in reducing the daily intake of free products with various sugar and our foods and beverages by 5% to contribute to dietary and health sugars to less than 5% of total no-added sugar options. support individuals and families in problems and to increases in energy intake (conditional meeting global recommendations*. obesity, diabetes and recommendation). Currently, Reducing sodium in In progress 0.8% of sugar removed from our foods and beverages. cardiovascular disease. Reducing around 45% of our foods and our products consumption of these nutrients can beverages provide less than 5% By 2020: Reduce the sodium we add in Our team in the Middle East has our products by 10% to support contribute to improving public sugars (added), enabling consumers been gradually continuing to individuals and families in meeting global health. So we are undertaking to use those products while meeting * reduce sodium in Maggi soup. We recommendations . complex reformulations of our the WHO’s strict conditional Reducing sugar in our In progress have also removed ingredients that 2% of sodium foods and beverages to be part of recommendation. Of the 55% chocolate drinks removed from our foods and beverages. consumers do not easily recognize the solution. We do this carefully, remaining, 45% are in scope of our By 2020: Complete the 10% and increased vegetable content Nestlé Indonesia launched an ensuring that these changes don’t sugars commitment and 10% are commitment taken in 2014, to reduce per bowl in the Maggi 11 improved Milo chocolate malt affect the taste or texture of our not relevant as their sugar content is saturated fat by 10% in all relevant Vegetables Soup. We have also drink with 25% less sugar. products that do not meet the NF criteria products, which may cause regulated; for example, as per * reduced sodium in this product In Singapore, we have with respect to saturated fat . consumers to switch to less CODEX. We’re committed to by 25% since 2015. introduced the first Milo In progress We have achieved 7% healthy alternatives. reducing the sugars in the products of this objective and we are working on powder with no added table in scope by an average of 5% by the the remaining 3% gap. Implementing our saturated sugar or artificial or natural end of 2020 while retaining the * These results apply to products fat commitments sweeteners, just more natural What we are doing tastes consumers enjoy. To date, we within the scope of our commitment, goodness from malt and milk. not to our global product range as Our commitment to reducing have already implemented a 0.8% Improvements to the manufacturing many of our products already meet reduction, equivalent to around process of our popular Asian noodles recommended levels. sugars, sodium and saturated Read more about our 10 000 tonnes of sugar. successfully reduced oil content Milo case study fatty acids by 12%–16% per serving in the We are actively working to reduce Reducing sugar content updated products launched in 2018. sugars, sodium and saturated fat in Next year, with the use of a locally 10 000 tonnes of We are gradually reducing sugar in products that can make a significant produced, nutritionally superior oil cocoa malt beverage products sugar removed impact for our consumers. By containing 80% less saturated fat, while also offering natural from our foods aligning our commitment to WHO the saturated fat content will be alternatives with significantly less and beverages since recommendations, we are leading reduced even further. January 1, 2017

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Adding vegetables, fiber and whole grains Our commitment: Increase vegetables, fiber-rich grains, pulses, nuts and seeds in our foods and beverages.

Why it matters What we are doing We make every effort to ensure that in the process of increasing Progress against our objectives Vegetables, grains, bran, pulses, Helping individuals and the nutritional profile of our foods nuts and seeds are all excellent By 2020: Add to our products at least families achieve balanced diets and beverages we don’t make our 750 million portions of vegetables, sources of fiber, vitamins, minerals We are increasing the amount of products less appealing to 300 million portions of nutrient-rich and nutrients. Our studies about grains, pulses and bran, and more nuts vegetables, fiber-rich grains, consumers through changes to kids’ eating patterns and gaps in and seeds. pulses, nuts and seeds in our texture, taste or appearance. their nutrition suggest that they In progress 170 million portions recipes through product innovation don’t eat enough of these of vegetables added to our foods and and renovation and remain on track Adding vegetables and beverages and 484 million portions of ingredients, impacting their to achieve our objective by 2020. promoting fresh ingredients fiber-rich grains, pulses, nuts and growth, development and health. seeds, versus the baseline of 2016. By the end of 2018, we had added We have been increasing the So we’re putting more of them in Getting more whole By 2020: In addition to whole grain 170 million portions of vegetables amount of non-starchy vegetables in our recipes. We also help families grain† from breakfast already being the main ingredient in (in the culinary category) and 484 our recipes, especially in our our ready-to-eat breakfast cereals for by promoting healthy cooking at million portions of fiber-rich grains, prepared meals, sauces, dressings cereals children and teenagers, all our home and providing nutritional pulses, nuts and seeds versus the and condiments. Getting children to Nestlé-branded cereals that carry Green advice on-pack and online. Through Cereal Partners Banner will be a source of fiber* and baseline of 2016. We have also eat vegetables can be particularly Worldwide (CPW), our joint made with whole grain**. delivered more than 25 billion challenging; we aim to help parents venture with General Mills, In progress 96% of children’s servings of whole grains since and caregivers by including we have set whole grain or teenagers’ breakfast cereals sold 2005, when we first started adding vegetables in snacks, sauces and requirements for our have more whole grain than any other ingredient. them to our products. innovations such as the new line of breakfast cereals. We want Makaron pasta mixes (Poland), * All products that carry 3 g or more of cereals that are popular with fiber per 100 g on pack nutrition table. which provide vegetables in an easy children and teenagers to Achieved goal to add ** Having a minimum of 8 g of whole to prepare mix. contain more whole grain grain per serving. 484 million portions than anything else. Our of fiber-rich foods prominent on-pack Whole to our products Grain Tick helps parents easily identify Nestlé cereals containing at least 8 g of whole grain per serving.

Read about CPW research into whole grains † Whole grain refers to whole, unprocessed grains containing 100% of the original kernel, including bran, germ and endosperm.

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Simplifying ingredient lists Our commitment: Simplify our ingredient lists and remove artificial colors.

inspired by the regional cuisines of Focusing on natural colors Why it matters Progress against our objectives Punjab, Mumbai, Chennai and We complement this approach Consumers increasingly expect to West Bengal, bringing local by removing artificial colors, and know what is in the foods and By 2020: Continue removing consumer tastes and preferences other additives such as emulsifiers, unfamiliar ingredients. beverages they buy. They want to into innovation. from our foods and beverages. In progress We’re transforming be able to recognize the ingredients During 2018, the volume of in-scope our culinary products by simplifying listed on the label for a variety of recipes and replacing ingredients that Supported by a network of nutrition artificial colors we purchased fell reasons, such as ensuring that the consumers don’t easily recognize. experts, we are working to find by 13.2%. content is nutritious, that it fits a suitable replacements for the By 2020: Remove all artificial colors from our products*. lifestyle or health concern, or that ingredients we plan to phase out We are also working with markets In progress it is sustainably manufactured. over the next couple of years. We 13.2% decrease and business units around the in artificial colors (based on This means providing simple, clear have already started researching world to overcome the challenges tonnage purchased). information about our products, options, both within our own R&D of changing the remaining artificial * This objective does not currently and removing unfamiliar and manufacturing operations and colorant compounds in our apply to our pet food products. ingredients from our recipes. in collaboration with suppliers. formulations, such as the difficulty in matching the brilliance or hue of Ruby chocolate comes What we are doing Measuring our progress artificial colors and the higher cost to the UK We have set up a system that of some non-artificial colors. Developed in collaboration A move toward ‘kitchen enables us to track the change in with Swiss chocolatier Barry weight of ingredients we use in our cupboard’ ingredients Callebaut, our new Ruby recipes and those ingredient names Through the Maggi Simply Good chocolate KitKat that are disliked or not understood initiative, we’re transforming our demonstrates Nestlé’s by consumers. Along with this, culinary products by simplifying 13.2% decrease commitment to developing we collect information on concrete recipes, and replacing ingredients new, innovative products cases in which ‘unfamiliar’ in artificial colors that consumers don’t easily without the use of ingredients have been or are being recognize with more familiar artificial ingredients. alternatives, such as vegetables, removed from our recipes. These herbs and spices. Nestlé India’s case stories are communicated Read more about our Ruby chocolate case study recent Maggi Masalas of India through this and other publications noodle range, for example, was to illustrate the extent of our work.

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Micronutrient fortification Our commitment: Address under-nutrition through micronutrient fortification.

Why it matters daily allowance of the respective companies assessed by the micronutrients, helping reduce the 2018 Access to Nutrition Index™ Progress against our objectives About a third of the world’s risk of wide-scale deficiencies. In (ATNI) in the category of population suffers from By 2020: Reach millions of children India, where the latest National Addressing Undernutrition. and families with fortified foods deficiencies in essential vitamins Family Health Survey showed 53% and beverages. and minerals (Global Nutrition of women and 22.7% of men have Supporting collective action In progress 106 million children Report), leading to impaired iron deficiency, 2 billion servings on addressing nutritional gaps and families reached with fortified growth, physical and intellectual of our Maggi iron-fortified Masala foods and beverages. In 2018, we participated in 10 development and compromised noodles were sold in 2018. This By 2020: Initiate or support collective initiatives, both global and local in action to reduce micronutrient immunity. Such impacts will cost was the first full year since the nature, to reduce micronutrient deficiencies in 10 countries. society an estimated USD 2.1 trillion product was launched to help deficiencies, including: In progress In 2018, we (CHF 2.12 trillion) every year by reduce the deficiency level. In India participated in 10 initiatives, both 2025 (ATNF). In response, we and Pakistan, our fortified cereal • Organizing an awareness-raising global and local in nature, to reduce fortify popular foods and beverages for infants, Cerelac, is our most event with GAIN, Cargill, the micronutrient deficiencies. with micronutrients that are effective product for reducing International Federation for Supporting Egypt’s By 2020: Continue to develop the supply unavailable or deficient in local deficiency levels. Spina Bifida and Hydrocephalus, chain for biofortified crops and expand battle against anemia our fortified portfolio. diets, focusing on children and Harvest Plus and the families in developing and high- With the world’s second- In progress We are prepared to We delivered 184.7 billion servings Government of Sudan to discuss buy at least 1000 tonnes of biofortified priority countries. of fortified foods and beverages possible solutions at the UN highest prevalence of iron maize from Nigeria a year, and are incorporating at least one of the Committee on World Food deficiency anemia (IDA) always seeking new collaborations to build the supply chain. Big 4 micronutrients (iron, iodine, Security hosted by the Food and costing the nation billions of What we are doing vitamin A and zinc) in 64 countries Agricultural Organization (FAO). dollars, Egypt’s new 2030 with higher vulnerability to Vision understandably Making fortified foods • Developing an advocacy toolkit to micronutrient malnutrition in 2018. includes a focus on better and beverages accessible help our markets bring fortification Of our popularly positioned health and nutrition. Can a By the end of 2018, and affordable up the political agenda. products for lower-income multichannel campaign to our fortified foods and To ensure our efforts reach people consumers, 83.9% were also • In our Central and West African reach 10 million people over beverages had reached on lower incomes, we fortify fortified with at least one of the Big market, sharing our expertise in the next five years help to 106 million children affordable products like Maggi halve IDA levels by 2030? 4 (as defined by the WHO). As a bouillon fortification at the and families condiments and noodles, cereals result of our global efforts, we Bouillon Summit organized by the and children’s milks. We include at ranked second out of the 18 largest Bill and Melinda Gates Foundation Read more about our in eight countries least 15% of the recommended food and beverage manufacturing and Helen Keller International. Egypt case study

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Why it matters Our contribution The link between noncommunicable diseases In line with the UN SDGs covering zero hunger, and malnutrition in all its forms is well- good health and reduced inequality, we’re established. More than 1.9 billion adults are helping individuals and families throughout their overweight, and 41 million children are lives, from conception to old age. We work with overweight or obese, raising the risk of dying our many partners around the world to promote from heart disease, stroke, diabetes and some balanced diets, age-appropriate portions and cancers (WHO). At the same time, around home cooking. We provide clear nutritional 45% of deaths of children aged under 5 are information and easily understandable guidance linked to under-nutrition. on-pack and in our marketing communications. Through our brands, we promote activities and For many of us, finding the time to eat well isn’t sports programs that inspire people – especially always easy. People increasingly consume food children – to eat well and exercise more. on the go or prepare convenience meals. Even when people do try to eat healthily, they are In 2017, we achieved the objectives we set out in faced with conflicting nutritional advice and our commitment to market to children only confusing labels. choices that help them achieve a nutritious diet. Inspiring people to lead This commitment is now embedded through a healthier lives new policy on marketing to children in 2018.

Our commitments to inspiring Malnutrition comes in many forms: people to lead healthier lives under-nutrition, obesity or being Launching organic versions of family- p.14 Apply and explain nutrition information overweight, and micronutrient favorite breakfast cereals on packs, at point-of-sale and online deficiencies. Combating malnutrition p.15 Offer guidance on portions for remains one of the greatest global We want to make it easier for individuals and our products families to make healthy choices with the health challenges. We work with many p.16 Leverage our marketing efforts to brands they love. In September 2018, we partners around the world to encourage promote healthy cooking, eating launched organic versions of family-favorite and lifestyles balanced diets, healthy hydration and Nestlé breakfast cereal brands Chocapic, p.17 Empower parents, caregivers and active lifestyles. Nesquik and Cheerios. teachers to foster healthy behaviors in children p.18 Support breastfeeding and protect The range is made with the same high-quality it by continuing to implement an ingredients you would expect from a Nestlé Our work on inspiring people to lead healthier lives industry-leading policy to market contributes to the following SDGs: breakfast cereal, and officially certified breast-milk substitutes responsibly organic. Similar to their conventional versions, p.19 Inspire people to choose water to the new organic varieties contain whole grain lead healthier lives as the number one ingredient and are free p.20 Partner for promoting healthy food How we map our material environments from artificial colors and preservatives. issues to the UN SDGs

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Providing nutritional information Our commitment: Apply and explain nutrition information on packs, at point-of-sale and online.

permitted by national regulations. Improving and extending Why it matters Progress against our objectives This outlines the nutritional additional information online We have a responsibility to composition of a typical serving by Consumers are demanding more By 2020: Continue providing detailed communicate about our foods displaying the contribution of the nutritional information, but with product nutrition facts with daily value and beverages, including the product to someone’s daily intake. percentages, ingredients and allergens, limited space on-pack we remain ingredients they contain and their and add special diet information, nutrition committed to providing that detail nutritional value, in an easy-to- We continue to provide relevant labeling explanations and healthy eating through corporate websites, brand tips on all our relevant packs, as well as on understand way so that consumers nutrition information on the back sites and/or e-commerce our websites and e-retailer sites, to better can make informed choices. of our product packaging, using enable informed choices. platforms. We are currently With the growing use and our Nestlé Nutritional Compass®. In progress 87.3% of our relevant reviewing the main online capabilities of mobile devices, This provides a standardized products have GDA-based labels platforms for providing nutrition and 95.6% of our products sold we’re able to share more nutritional table and tips on how information and reshaping our worldwide display the Nestlé information online and aren’t the product fits into a healthy initiatives and will report on Nutritional Compass®. limited by the space available on lifestyle. The Nestlé Nutritional progress in future reports. 73.7% of relevant foods and our packaging. Compass is displayed on 95.6% beverages designed for children of our sales. Providing online carry GDA-based labels. information What we are doing We continue to engage with health 73.7% of relevant We liaise with governments authorities, stakeholders and the Empowering consumers and industry associations food and beverage industry to foods and beverages through clear labeling on-pack to improve the availability evaluate new labeling approaches designed for children of nutrition information to To help individuals and families that could harmonize labeling carry GDA-based labels consumers. In the United make informed choices about our schemes between different (based on children’s States, Nestlé has joined the foods and beverages, we provide countries while complying with all reference values) SmartLabel® transparency clear, science-based nutritional regulatory requirements. We have initiative, providing online information on-pack. We display also joined voluntary initiatives information about nutrition, guideline daily amounts (GDAs) on locally, such as the ones in the UK ingredients and allergens front-of-pack on 87.3% of our and Australia. relevant products, wherever for around 87% of its applicable portfolio.

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Offering portion guidance Our commitment: Offer guidance on portions for our products.

Why it matters With clear information on-pack, Nestlé Portion Guidance also helps Progress against our objectives Around the world, expanding consumers consider appropriate portion sizes are contributing to By 2020: Continue providing guidance portion sizes when consuming our on portions globally on all children’s imbalanced eating habits and foods and beverages. With an and family product packs, and add leading to adverse health engaging and intuitive way of frequency of consumption indications outcomes. Conversely, smaller providing guidance through on relevant products. portions of vegetables, whole portions, we aim to help individuals In progress 65.4% of our grains and milk cannot deliver the children’s and family product packs and families understand the provide Nestlé Portion Guidance™. required levels of daily nutrition. nutritional value of our foods and By 2020: Extend our guidance on As the largest global food beverages by redefining their portions to our consumer recipes, and manufacturer, we have a unique portion habits. relevant teenager and adult products. opportunity to help guide In progress We work with dietitians individuals and families to pursue a Physical and online guidance in the US to help them better engage healthy diet through informed with their communities on portion on serving sizes guidance and consumer recipes. choices and our Nestlé Portion Nestlé Portion Guidance is made By 2020: Gradually increase the proportion Guidance™ initiative. available in a variety of ways, Using our products to make a difference of guidance on portions provided through product form, pack design, serving device through product form, pack design, Through our Nestlé Portion Guidance™ initiative, we encourage or dispenser to make it even more intuitive What we are doing website content illustrations and, age-appropriate portion sizes on our products and packs. This helps than on-pack messaging. when possible, a serving device or equip consumers when they plan, buy, prepare and serve products. In progress 12.2% of our On-pack information about dispensing machine. We also aim Our recipe websites share this guidance with home cooks and children’s and family portfolio provide appropriate portions to make our recipe sites more Nestlé Portion Guidance through people seeking more detailed information – such as Nestlé France’s product form and 12.6% do so through Based on dietary recommendations accessible, searchable and user Croquons La Vie website, which, using colorful visuals, allows pack design. from leading organizations such friendly by displaying portion consumers to compose balanced meals with recipes and portion as the WHO, as well as scientists, information. Of our children’s and sizes adapted to their needs. policymakers and health family products, 65.4% provide 65.4% of our children’s Read the full story practitioners, Nestlé Portion Nestlé Portion Guidance, with and family products Guidance is designed to encourage 12.2% through product form and provide Nestlé age-appropriate portion sizes. 12.6% through pack design. The Portion Guidance It helps redefine portions, figures related to extending our particularly for energy-dense guidance on portions to relevant foods and beverages. teenager and adult products will be reported by 2020.

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Marketing healthy choices Our commitment: Leverage our marketing efforts to promote healthy cooking, eating and lifestyles.

Why it matters What we are doing Progress against our objectives We interact with billions of Through Nestlé for Healthier Kids, individuals and families every day, we’re focusing on delivering By 2020: Double the outreach of our efforts to promote healthy cooking and with our products, services and communication, information and eating and healthy lifestyles for communications. We want to put knowledge to parents and individuals, families and their pets. our expertise and global reach to caregivers around good nutrition. In progress In 2018, we increased good use, inspiring consumers to Our Maggi brand provides recipes the amount of marketing expenditure cook at home, eat a balanced diet promoting the use of vegetables on healthier categories by 30% (compared to 2016), to promote and exercise more. and other fresh ingredients in healthier cooking, eating and lifestyles healthy, tasty, balanced home- among individuals and families. We want all children to have a cooked meals. In Thailand, we healthy start in life. That is why we have launched cooking clubs that follow strict standards regarding provide advice, mostly online, on advertising and marketing and do not preparing balanced meals; and in market to children under 6 years of Australia, Maggi aims to make age. We only market foods and weeknight cooking achievable beverages to older children (aged through its marketplace line of 6–12) that are part of a nutritious and stir-fry mixes. balanced diet. These products must Maggi promotes healthy home cooking in new meet strict nutrition criteria under our We are also focusing activities on Policy on Marketing Communication breakfast foods. In many cases, online series to Children. children are not eating healthy Aligned with one of its Simply Good commitments – to raise awareness breakfasts or are skipping breakfast and contribute to people’s knowledge of healthy lifestyles, cooking altogether. We know the importance and nutrition – Maggi has launched a new online series, Yelo Pèppè. of a nutritional breakfast, and that an This 13-week nutrition education series celebrates contemporary on-the-go solution is better than no African cuisine and highlights the many challenges that modern breakfast at all. So, in the US market, families face in trying to balance healthy diets and the demands of we have launched ready-to-drink modern life. The weekly program, available on Maggi’s YouTube breakfast beverages to provide the channel, also allows viewers to access recipes and nutrition tips. essential nutrients kids need, such as Nesquik SuperBreakfast protein Read the full story breakfast milk drink for kids.

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Promoting healthy behaviors in children Our commitment: Empower parents, caregivers and teachers to foster healthy behaviors in children.

Why it matters ambition to help 50 million children lead healthier lives by 2030. Progress against our objectives Today, around 41 million children under 5 years of age are considered By 2018: Maintain existing Nestlé Supporting parents and Healthy Kids Global Programs, while overweight or obese, and 155 million caregivers in the first 1000 measuring their impact on children based are stunted due to under-nutrition. days of life on five globally defined goals: eat Adopting good nutrition practices nutritious and diverse meals, manage Nestlé Start Healthy Stay Healthy portions, choose water, play and be from an early age gives children a active, and maintain good hygiene habits. better chance of growing up fit and provides science-based nutrition services to parents and caregivers in In progress 9.6 million parents in well. We use public health data and over 50 countries are currently our own research to inform our the critical first 1000 days from registered with Nestlé Start Healthy products and services; in turn, these conception to a child’s second Stay Healthy. give parents, caregivers and birthday. Our services, mainly online, By 2020: Support 50 million children teachers the tools and advice they include an engaging e-learning through our nutrition education and course that turns the latest scientific behavior change programs, an important need to keep kids active and healthy. milestone toward our wider 2030 ambition. findings into simple, practical In progress 29 million children feeding advice. There are currently reached by Nestlé for Healthier Kids What we are doing 9.6 million parents in over 50 programs in 86 countries around countries registered with Nestlé the world. Combining our actions into Start Healthy Stay Healthy. one flagship initiative Fostering healthy habits in Russia Nestlé for Healthier Kids brings We also develop innovative foods together all our efforts that support and beverages to meet the key Seven-year-old Mikhail, from Moscow, is one of 8 million children 29 million children parents, caregivers and teachers, nutritional needs of mothers-to-be, to benefit from Nestlé Russia’s award-winning Good Nutrition reached by ranging from product reformulation new mothers and children, as well program since the project’s inception. Running for nearly two Nestlé for Healthier Kids to education and lifestyle services. as more sustainable foods. Our decades, the initiative complements the school curriculum with This program now encompasses a Completely Gerber range of baby 120 hours of additional nutrition education, provided over three programs globally range of our key initiatives foods in North America is being years. Using materials created in partnership with the Institute relaunched with increased including Nestlé Start Healthy Stay of Developmental Physiology, one of the teachers involved, Read more about Nestlé Healthy, Choose Water and our vegetable and grain content and Irina Viktorovna Kazarina, promotes the six habits defined by for Healthier Kids Good Nutrition program to name a organic options; and in Europe we the Nestlé for Healthier Kids global program. few. Launched in May 2018, Nestlé have launched NaturNes Bio, a Read the full story for Healthier Kids is present in 86 range of baby foods using countries and supports our organic ingredients.

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Supporting breastfeeding Our commitment: Support breastfeeding and protect it by continuing to implement an industry-leading policy to market breast-milk substitutes responsibly.

Progress against our objectives We foster breastfeeding-friendly External recognition Why it matters By 2018: Ensure that all provisions workplaces through our Maternity for our efforts supporting breastfeeding in our Maternity The nutrition mothers and babies Protection Policy. We also support Protection Policy are implemented. Nestlé has been consistently listed receive during the first 1000 days of the efforts of the UN-backed Every Achieved We have implemented in the FTSE4Good responsible life is critical for a baby’s growth and Woman Every Child movement to our Maternity Protection Policy across investment index since 2011. In May development. Studies have found promote breastfeeding. We have all our markets. 2018, we remained in the top two in that the period from conception set up breastfeeding rooms on our By 2020: Advocate for a breastfeeding- the breast-milk substitute (BMS) friendly environment by supporting the through pregnancy and up to a premises with more than 50 female sub-index of the Access to Nutrition set-up of breastfeeding rooms in child’s second birthday can help employees (425 sites). We have Index™ (ATNI). Nestlé’s FTSE4Good communities where we operate. shape our children’s future eating also installed 5437 breastfeeding In progress membership was also confirmed 5437 breastfeeding habits. That’s why we support the rooms for public use in India, rooms for public use installed in India, again, following the June 2018 WHO’s recommendation to Bangladesh and China. Bangladesh and China. index review. We appreciate the exclusively breastfeed infants for Ongoing: Ensure that the practices of the recognition from independent third Reaching out to mothers the first six months of life, followed Nutrition business consistently meet the Supporting World parties, as this helps us build FTSE4Good Index Breast Milk by the introduction of adequate around the world Breastfeeding Week transparency in our processes. Substitutes criteria. nutritious complementary foods, To celebrate World We engaged thousands of In progress Nestlé’s FTSE4Good along with sustained breastfeeding Read more about BMS Breastfeeding Week in membership was also confirmed healthcare professionals through up to two years and beyond. compliance record Link August 2018, we embarked again, following the June 2018 conferences, workshops and index review. on a series of campaigns partnerships with hospitals to around the world – both to Ongoing: Continue to strengthen our reach an estimated 75 million policy and procedures to maintain What we are doing 5883 Nestlé raise awareness about the people during World Breastfeeding industry leadership on the Nutrition employees issue and to make our implementation of the WHO Code. Promoting breastfeeding Week this year. In Egypt, we company a friendlier place In progress 28 countries audited at Nestlé and beyond organized an online educational involved in marketing for breastfeeding mothers. (internally and externally) against the session on the country’s most breast-milk substitutes We promote the benefits of From Ecuador to Egypt and Nestlé Policy and Procedures for breastfeeding through dedicated popular forum for women, while completed training on the Implementation of the WHO from Mexico to Poland, our International Code of Marketing of campaigns for World Breastfeeding our media campaigns reached WHO Code in 2018 multimedia campaign Breast-milk Substitutes. 2.5 million people in Poland and Week. This includes an online reached millions of mothers 3 million in Ecuador. Ongoing: Continue to report publicly on platform where parents can find globally, raising awareness our progress on the implementation of tips, advice and information on of breastfeeding. our policy on the WHO Code. breastfeeding and how to support In progress 5883 Nestlé Nutrition their baby in the 1000 days from Read the full story employees completed training on conception to their second birthday. breastfeeding and the WHO Code.

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Encouraging healthy hydration Our commitment: Inspire people to choose water to lead healthier lives.

Boosting healthy Why it matters Progress against our objectives hydration in Mexico Alongside what you eat and how In Mexico, we’ve partnered with active you are, what you drink is By 2018: Release with partners an the Ministry of Health to promote open-access platform offering global equally important when it comes to a range of initiatives, including statistics on people’s drinking habits. a healthy lifestyle. We recommend encouraging healthy habits in Achieved The platform in our water as the best choice for daily 2018 objective has been completed medical students and media events hydration, whether it comes from and will be shared in 2019. informing the public about healthy a tap or bottle. By 2020: Launch national campaigns hydration. We also celebrated promoting healthy hydration with public National Family Hydration Month and private partners in 10 countries. What we are doing in July, with events engaging In progress We’re working approximately 80 000 people to together with partners around the We are collaborating with scientific world, including in the US and Mexico. help them understand the benefits 72 countries implemented a ‘Choose organizations and other partners to of drinking more water. water’ module in their local Nestlé for analyze adults’ and children’s Healthier Kids programs with local hydration patterns in several Encouraging US families to partners in 2018. countries. We have carried out choose water polls, surveys and a peer-reviewed study, the results of which will be In May 2018, Nestlé Waters North released in 2019. Our goal is to America and World Wrestling obtain robust insights in order to Entertainment launched the Choose conduct campaigns that raise Water campaign, encouraging 80 000 people public awareness of the role of consumers to live a healthy lifestyle. participated in Mexico’s The campaign provides an hydration in healthier communities. Teaching the benefits of healthy hydration National Family A digital platform will enable data opportunity to utilize WWE’s global digital and social platforms It’s important that people discover hydration and other healthy Hydration Month events to be publicly and easily available habits at an early age. In Argentina, we’re delivering a digital, for consultation. featuring WWE superstars to spread awareness about the interactive program to primary school children to engage them on benefits of water to US families. these topics and provide valuable lessons for their futures. Read the full story Read more about Nestlé for Healthier Kids

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Health-promoting food environments Our commitment: Partner for promoting healthy food environments.

Why it matters providing shopping tips for a Rica, France, Japan, Turkey, the UK ‘healthy basket.’ Our commitment and the US focused on healthier Progress against our objectives Awareness of the role nutrition is now integrated into our new baskets (informing consumers plays in good health is growing By 2020: Partner with retailers and food commercial framework to make about how to choose healthier professionals to foster environments that across geographies. Now more nutrition, health and wellness options when shopping), healthy promote healthier diets and lifestyles. than ever, people are looking for commercial activities part of our aging and shopper behavior. The In progress We have engaged health benefits in their food daily operations. This includes result was an increase in the sales with 70 000 individuals across choices. At the same time, public working with our commercial of healthier options. the food industry to promote nutritional knowledge. health authorities are multiplying teams in our markets on sharing campaigns to raise awareness of best practice and practical ways In Colombia, participating stores Helping aspiring chefs the importance of good nutrition to engage customers to make reported an increase in the number learn online and healthy living, and the healthier choices. of healthier baskets purchased by importance of prevention. We customers. We found similar In July 2018, we launched a believe that Nestlé and the entire Collaboration for Healthier Lives results in participating stores new free online academy to food and beverage industry have help aspiring chefs take the In 2018, we extended our across Turkey, Japan and the US, a role to play to help people lead first step toward a culinary participation in the Consumer indicating that healthier purchases healthier lives. career. The Worldchefs Goods Forum’s (CGF) Collaboration also benefit businesses, as well as the consumer. Academy, an online portal for Healthier Lives (CHL) flagship and mobile app, caters to What we are doing global program. The CHL aims to students who may not have change consumer behavior by the means, mobility or Promoting healthy food promoting healthier options. In flexibility to attend full-time environments partnership with 19 leading retailers culinary school. The program Whether online or in-store, there and 45 food and beverage, personal links to the Worldchefs are many ways to create healthy care, hygiene and cosmetics We have engaged with certification and is intended food environments that increase manufacturers, we promoted 70 000 individuals to be the first step on the healthy eating and physical activities opportunities for purchasing across the food culinary career path. The nutritious foods and beverages. in-store and online, for customers online course comprises two These can range from promotions, and store employees. A series of industry to promote modules and 27 lessons, and to arranging shelf displays, to in-store activities in Colombia, Costa nutritional knowledge is free to everyone.

Read the full story

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Why it matters We use the findings from our long-term studies into the eating habits of infants and children, for Some conditions, like obesity, type 2 diabetes instance, as well as collaborations with leading and Alzheimer’s, have common physiological universities, research organizations and factors that can be affected by, but also start-ups, to improve our products and services. addressed through, nutrition. Food-related In 2018, we invested CHF 1.7 billion in our allergies and intolerances are also increasingly research activities. common. By building and sharing nutrition knowledge, we can help more people live We also share our findings to further the cause longer, healthier lives. of addressing some of today’s key nutrition challenges. In 2018, the Nestlé Nutrition Institute (NNI) shared our learning with health Our contribution professionals, scientists and nutrition We’re constantly looking to learn more about communities through 54 articles in 10 NNI how nutrition, combined with active lifestyles, publications and 86 conference presentations. can support health across all generations. Building, sharing and applying nutrition How meal replacement programs could be part of the solution to obesity knowledge In a world where obesity and diabetes are at epidemic levels, we trialed the Optifast meal replacement program Our commitments to “You are what you eat,” or so the to see if it was more effective at producing meaningful building, sharing and saying goes. With a network of weight loss than a standard food-based diet and lifestyle program. The results were hugely encouraging: applying nutrition knowledge research centers spanning the compared to those on a food-based diet, participants in globe, our scientists are discovering p.22 Build and share nutrition knowledge the Optifast program lost twice as much weight and had more about the human body and from the first 1000 days through to greater improvement in blood sugar levels. healthy aging the role food plays in overall health. p.23 Build biomedical science leading to health-promoting products, The study started in February 2016, and we started personalized nutrition and sharing our results with the scientific community and digital solutions healthcare professionals in 2018. We presented our findings at several scientific congresses, including the Our work on building, sharing and applying nutrition knowledge contributes to the following SDGs: European Congress on Obesity in May, the American Diabetes Association in June and ObesityWeek in November. The Optiwin study was published in the journal Obesity in November. How we map our material issues to the UN SDGs Read the full story

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Sharing nutrition knowledge throughout life Our commitment: Build and share nutrition knowledge from the first 1000 days through to healthy aging.

Why it matters learning through 54 articles and by 98.2% of participants, the IPPN 86 conference presentations. by 98% and for ENS, 97.1% rated Progress against our objectives What we eat and drink as young strongly agree to agree about their children provides a foundation for By 2020: Build knowledge on the Our collaborations with a number of satisfaction with the course. associations between nutrition and our future lives, but our nutritional international universities to help lifestyle, and biomarkers of health in needs change as we grow older. create and disseminate pediatric Researching ways to improve mothers and children through the EpiGen collaboration. That’s why we devote ourselves to nutrition-specific programs, include: mothers’ and infants’ health studying the links between In progress In Italy and Mexico, We have been working with the we have launched G-Balance, a new nutrition and health at various • Postgraduate Program in Pediatric Nutrition (PGPN), Boston EpiGen Global Research nutritional solution for the stages of life: from expectant Supporting maintenance of myo-inositol and Consortium on a study called mothers, babies and children all the University School of Medicine, US. healthy aging probiotics for pregnant women. NiPPeR to establish whether way through to healthy aging. • International Program for By 2020: Build further knowledge on specific combinations of nutrients It is estimated that more than Preterm Nutrition (IPPN), dietary intake, eating behaviors and and probiotics can improve the one in three adults aged over lifestyles in infants and children. University of Western Australia. What we are doing health of mothers and babies. 50 are not receiving their In progress As part of our FITS • Early Nutrition Specialist (ENS) In 2018, we completed the minimum daily protein KNHS study, we carried out research Contributing to the knowledge Program, Ludwig Maximilian preconception phase and extended requirements. To support the into the diets of children in the Philippines to help understand any of healthcare professionals University, Germany. the follow-up work on infants. In growing population of people nutritional gaps there might be – and The Nestlé Nutrition Institute (NNI) Italy and Mexico, we have over 50, Nestlé Health how we can address them. is a not-for-profit that shares These programs offer unique launched G-Balance, a new Science BOOST has launched 2020: Develop a deeper understanding of science-based information and opportunities to strengthen nutritional solution for the a multimedia protein dietary intake, preferences and lifestyle habits during aging. education with health healthcare professionals’ maintenance of myo-inositol and education campaign aimed at In progress Nestlé Health Science professionals, scientists and knowledge and practice in probiotics for pregnant women. consumers, retailers and healthcare professionals, used its BOOST brand to launch a nutrition communities around the pediatric nutrition by familiarizing multimedia protein education campaign Read more about Nestlé them with evidence-based including online facts, tips and on healthy aging aimed at consumers, world. In 2018, our global website for Healthier Kids and 16 local websites reached guidelines and recommendations. articles, an interactive protein retailers and healthcare professionals. 338 435 registered members across calculator, a toolkit for 196 countries. We hosted two In 2018, these three programs healthcare professionals and 7700 healthcare global workshops on ‘what children offered more than 7700 healthcare retail promotional tie-ins with professionals have eat,’ which reached 14 141 people professionals in 82 countries, with healthy aging themes. over 90% completing the courses. benefited from our via a webcast, and nutrition Read the full story education, as well as seven Feedback was very positive: the collaborative programs symposia. We also shared our PGPN was rated excellent to good with universities

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Enhancing biomedical science Our commitment: Build biomedical science leading to health-promoting products, personalized nutrition and digital solutions.

important discovery into a key about our protein substitutes, Our VIA online platform Why it matters Progress against our objectives mechanism of action of the most facts and tips, an interactive helps more than 350 People are living longer, and often common drug for lowering protein calculator tool, a toolkit for with less support from healthcare healthcare professionals By 2020: Develop digital nutrition profiling blood-sugar levels. Published in HCPs, promotional material for for calculating nutrient intakes, as well as systems. Through biomedical the prestigious journal Nature stores and a series of articles. support their patients for making recommendations for science, we aim to understand, Medicine, the study was carried nutritional balance, into a comprehensive treat and help prevent disease out by Nestlé research scientists tool to assist individuals and families to lead happier and healthier lives. throughout life. We are advancing and academics from Vanderbilt In progress the therapeutic role of nutrition, and We are developing University in the US and Aarhus several products that can help treat also exploring the roles of genetics, University in Denmark. disease or act as therapies, from family history, environment and protein substitutes to organic tube-feeding formulas. lifestyle as nutrition becomes Making additional resources increasingly personalized. By 2020: Develop new interventional available online nutritional solutions driven by studies and To help healthcare professionals diagnostic profiling. These programs will (HCPs) support their patients, an focus on key areas such as metabolism, What we are doing gastrointestinal and brain health, healthy enhanced VIA (Vitaflo in aging, skin health and pets. Using technology to spread Association) online platform was In progress We continue to nutrition knowledge in China launched in 2018. The site gives advance the therapeutic role of We’re partnering with tech more than 350 registered users Helping tomorrow’s scientists transition to nutrition, and are also exploring the roles of genetics, family history, powerhouse Xiaomi to promote access to videos, case studies, professional life environment and lifestyle as nutrition product guidelines and a healthier living in China. Nestlé Research has signed a five-year agreement with the becomes increasingly personalized. recording of our first webinar, By combining our expertise University of Lausanne in Switzerland to enable students to apply for held in July 2018. A new Twitter in nutrition science with the doctoral training positions at Nestlé. This will enable them to carry account (@VitafloRDs) has also convenience and reach of Xiaomi’s out research projects leading to the award of a PhD or MD–PhD been set up and boasts over 500 MIUI operating system, we aim to degree from the university, and will enhance our ability to develop followers to date. help China’s over 50s improve their the next generation by supporting emerging talent. Participating diets – a crucial demographic in a students will have the opportunity to gain high-quality research BOOST US also educates country that is aging fast. experience in an interdisciplinary environment, working with consumers, retailers and HCPs state-of-the-art facilities and professional guidance. Helping treatment for diabetes about the role dietary protein plays in supporting healthy aging Read the full story In partnership with leading online. Topics include details academics, our scientists made an

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For our communities Helping develop thriving, resilient communities

2030 Ambition To improve 30 million livelihoods in communities directly connected to our business activities.

Across our business we work with Nestlé needs YOUth aims to • Entrepreneurship – supporting suppliers, partners and farmers equip the next generation for young people to be innovative globally. With the growing employment and support them and creative through initiatives demand for food, and challenges to become inspiring leaders in such as Nestlé Professional’s to farming, we strive to support our company, successful My own business scheme. rural development, promote and agripreneurs, entrepreneurs and • Innovation – especially through respect human rights, and game-changers, regardless of our interactions with young guarantee decent employment their field or level of expertise. people and our Facebook page, and diversity. Our programs, It does this through: and by stimulating innovative initiatives and commitments to thinking and leveraging achieve these aims are designed • Creating employment and resources. to build stronger communities and training opportunities for a secure, long-term supply chain. youth at Nestlé – through Read more online hiring young people, providing Global Youth Initiative: their first work experiences, Nestlé needs YOUth apprenticeships and training opportunities, and helping The Global Youth Around the world, youth equip today’s youth with the unemployment is a serious issue Initiative aims to help skills they will need in and a contributor to global 10 million young tomorrow’s workplace. poverty. As a major employer, people worldwide we recognize the role we can • Agripreneurship – our program access economic play to tackle this. Nestlé needs for preparing the next generation opportunities by 2030 YOUth is one of our flagship of farmers by developing young initiatives, directly supporting people’s agricultural and our ambitions and commitments business skills and making to help young people. farming an attractive and viable career option.

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Why it matters • Farmer diets, to ensure farmers and their families are healthy and have access to the While the world needs more food than ever, nutrition they need. consumers also increasingly want to know how and where their food is produced. At the • Responsible sourcing, ensuring our supplies same time, factors such as climate change, of raw ingredients are sourced in a way that poor farming practices, diseased plants, a lack meets our Responsible Sourcing Standard of empowerment for women, water scarcity and the growing demand from consumers and an aging farming population all put pressure for ethical sourcing. on farmers. To address these areas, we now focus Many farmers, their families and their increasingly on impact by using our Theory of communities survive on low incomes. As a result, Change (ToC), which we have developed for fewer young people view farming as a viable some of the categories of raw materials we buy. livelihood, choosing instead to move to urban This allows Nestlé to focus our activity where it areas to find employment. This presents a matters most and measure our impact at a challenge that jeopardizes future supplies of the global level. The ToC model identifies desired raw materials we use. long-term goals, then works back to determine Enhancing rural what conditions must be in place for the goals to be reached. Our contribution development and Initially, this impact-centered approach has Our experience and scale as a global food been implemented in our Farmer Connect producer enable us to make a difference by coffee supply chain. Where we source directly, livelihoods supporting rural development and economic Farmer Connect is our longstanding program to growth throughout our supply chains. Working support local farmers to thrive in their Our commitments to As demand for food rises, agriculture closely with farmers, their communities and communities. ToC methodology has enabled us enhancing rural development faces many challenges. By understanding expert organizations, we look to identify the root to better support farmers by targeting specific and livelihoods those challenges, identifying solutions causes of challenges farmers face, and develop needs where we can deliver the biggest impact solutions to help them improve their practices, p.26 Improve farm economics among and measuring our impact, we aim to across our supply chain. increase their productivity and income, and make the farmers who supply us improve farmers’ livelihoods, making farming a more attractive sector. We do this p.27 Improve food availability and dietary farming more attractive and ensuring diversity among the farmers who across four key areas: supply us our long-term supply needs are met. • Assessing farmers’ needs, to ensure we p.28 Implement responsible sourcing Our work on rural development contributes in our supply chain and promote to the following SDGs: address the right issues. animal welfare • Farm economics, to help make farms and p.29 Continuously improve our green coffee supply chain farming economically viable and attractive for p.30 Roll out the Nestlé Cocoa Plan the next generation. with cocoa farmers

How we map our material issues to the UN SDGs

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Delivering impact through Farmer Connect Our commitment: Improve farm economics among the farmers who supply us.

Nestlé works directly with 716 000 Our model for impact • Allocate resources and prioritize Why it matters Progress against our objectives farmers around the world through The five stages of ToC are to: activities to do the most good. Our work to improve farm Farmer Connect, which enables us • Communicate our impact on By 2020: Improve farm economics in economics is delivered through to develop supply chains that meet • Identify and prioritize issues farmer livelihoods and rural seven priority sourcing locations based Farmer Connect – our sourcing our social, environmental and through a materiality assessment on the results of the RDF baselines. development to stakeholders. program through which we work ethical requirements. We trained exercise (e.g. RDF and RISE). In progress We have results from directly with farmers – and based on four out of the seven locations. Three 440 000 farmers through Farmer • ‘Reverse engineer’ – mapping • Use the information to support a category-specific Theory of other studies are planned for 2019/20 Connect in 2018. backwards from intended training and technical assistance Change (ToC). This allows us to have as part of the Farmer Connect program. impacts to the preconditions for our suppliers. a structured, focused approach to As stated in the 2017 report, we needed to achieve them. We recognize that different markets locally identified, real issues. have rolled out 18 baseline rural have their own local needs and development assessments to • Define assumptions about situations. We have therefore understand the needs of the the context. developed a generic Group-level What we are doing farmers who supply us, using two • Identify interventions that create ToC for key categories, which can key tools: the Rural Development Assessing the impact of the desired changes. be reviewed and adapted to suit Framework (RDF) and Response- our actions local requirements. Local markets Improving farmer Inducing Sustainability Evaluation • Define performance indicators We have adopted a deeper propose their changes to Nestlé income in Brazil (RISE). Using these baselines, we to measure outcomes. understanding of what our and, once approved, KPIs are are implementing programs to NATA (Center of Authorized suppliers need through our ToC. consolidated at Group level to improve farm economics in seven By using the ToC model, we can: Technical Assistance) is a This represents a significant shift in give a comprehensive model for priority locations, in line with the technical assistance program focus for Nestlé, moving away • Define and articulate long-term measuring and monitoring impacts, priorities of farming communities. developed to help Brazilian dairy from previous reporting activities sustainability goals and outcomes. which is reviewed annually. We have results from four out of farmers increase the profitability and toward assessing the positive the seven priority sourcing • Measure ongoing progress of their businesses. Technicians impacts of our actions. The greater locations, and three other studies toward short- and medium-term collect and analyze data, which sense of context gained through are planned for 2019 as part of the milestones. Nestlé trained helps farmers with their ToC enables us to adopt a more Farmer Connect program. 440 000 farmers planning and decision making. comprehensive approach to • Question any assumptions we addressing the issues farmers face. have made in defining our goals. on good agricultural Read the full story • Identify and mitigate physical practices to address and reputational risks. locally identified issues

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Improving farmers’ diets Our commitment: Improve food availability and dietary diversity among the farmers who supply us.

families; and Impact Valuation, and showing farmers how they can 460 farmers in Kenya Why it matters Progress against our objectives identifying how impacts can maximize income and nutrition participated in our trial As many as 70% of farming families be measured and reported. from their limited land. To date, we in some countries can be short of nutrition and health By 2020: Improve food availability and The Impact Valuation working have invested in a plantlet nursery, dietary diversity in five priority sourcing food for up to three months a year. group published a White Paper launched a text service to farmers education workshops locations based upon the results of the Our Rural Development Framework in 2018. on coffee prices, and supported Rural Development Framework (RDF) (RDF) baselines show that many co-cropping to help farmers baselines. farmers lack diversity in their diets diversify their income. In progress This work is ongoing Partnering with food banks and progress will be reported in 2020. and do not get enough protein or in Mexico nutrient-dense foods such as As part of the Nescafé Plan, Nestlé vegetables, dairy and fruit. The Mexico has partnered with Bancos future of our company depends on de Alimentos de Mexico, a national the good health of farmers, their food bank initiative, to actively families and communities, to improve the diets of coffee farmers ensure the long-term sustainability through food distribution. The food of our supply chains. bank also collects fresh agricultural produce that would otherwise go What we are doing to waste from fields, and makes it available to coffee-growing Collaborating to improve communities. nutrition for farmers Improving farmers’ nutrition In 2018, we played a key role in Helping small farmers boost In Kenya, as part of the FOSEK project with civil society organization developing the cross-industry income and nutrition Solidaridad, we are trialing potential methods to improve nutrition FReSH (Food System Reform for In the Philippines, we are for farming families, from cooking lessons and nutrition classes to Sustainability and Health) project investigating different models of supplying seeds for kitchen gardens and promoting more nutritious led by the World Business Council coffee farming to find the most vegetables. In all, 460 participants received the pilot nutrition and for Sustainable Development. effective one for local conditions, health education workshops and 348 farmers received the cooking Thanks to our scientific expertise where many farms are a single demonstration workshop pilot. These were spread over four areas and activities, Nestlé was chosen hectare in size. The project focuses in Kenya. to lead on two goals: Nutrition on three key drivers: increasing Secure Supply Chains, which looks yields; setting up demonstration Read the full story at nutrition for farmers and their farms and farmer business schools;

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Implement responsible sourcing Our commitment: Implement responsible sourcing in our supply chain and promote animal welfare.

Progressing toward collaboration between major Why it matters Progress against our objectives cage-free eggs companies and animal welfare Consumers and stakeholders experts to improve standards to In 2018, more than 63.2% of the By 2020: For Tier 1 suppliers, over 80% of increasingly want to know where meet consumer demand for food eggs we sourced in Europe were the total spend and volume sourced from their food comes from, what it from animals reared in systems audited and compliant suppliers. from cage-free hens – marking contains and how it was made. that promote good welfare. In progress 61% of our total spend significant progress toward our Transparency in our supply chains and volume sourced from audited and pledge to move to 100% cage-free and responsible sourcing of our compliant suppliers. eggs in our European supply chain Meeting stakeholder materials are essential to ensuring By 2020: For upstream, 80% of the by 2020. Nestlé is also committed expectations – improving our sustainable future. We are spend and volume of our priority to sourcing all of the eggs we broiler production categories to be traceable and 70% to proud to be implementing use worldwide from cage-free be responsibly sourced. responsible sourcing and to answer In 2018, Nestlé made an additional sources by 2025. We were proud public commitment to improve In progress 72% of our 14 priority our consumers’ questions. categories of raw materials are traceable to receive a Good Egg Award from welfare standards for broiler and 63% are responsibly sourced. Compassion in World Farming chickens used in our food products What we are doing (CIWF) in 2018, in recognition of in Europe. We will ensure that this pledge. We also signed a global these standards meet the criteria Supporting smallholder Expanding our responsible collaboration agreement with CIWF and expectations set out in the sugar producers in sourcing scope to help us identify further ways of European Broiler Ask (European the Philippines improving animal welfare for the In 2018, we added processed Chicken Commitment). By 2026, In partnership with ProForest ingredients used in our products. vegetables (specifically, tomatoes, we will move to one standard, and the Sugar Industry carrots, spinach, onions and bell based on a phased introduction. Foundation, we’re supporting peppers) and spices to the list of Creating a new coalition thousands of smallholders in key commodities on which we for animal welfare the Philippines’ largest focus our responsible sourcing Nestlé, together with six other food sugar-growing region, activities. It also means that we will companies, founded the Global Negros Occidental, to be ensuring responsible sourcing Coalition for Animal Welfare 63% of our 14 priority increase their incomes and for an even greater amount of the (GCAW) in 2018. The GCAW aims ingredients are develop safer and more raw materials we buy. to advance animal welfare responsibly sourced sustainable farms. standards throughout the global food supply chain. It is the world’s Read the full story first global, industry-led

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Coffee Our commitment: Continuously improve our green coffee supply chain.

Why it matters their productivity and optimize We maintained the pace of our experiences. Through various production costs, thereby coffee plantlet distribution program, channels, Grown Respectfully will Progress against our objectives Coffee production faces serious improving coffee economics providing 21.9 million plants to 19 096 help communicate the full breadth challenges, with pressure on By 2020: 70% of the total Nescafé coffee and their quality of life. farmers during the year, keeping us and depth of the Nescafé Plan’s supply to be responsibly sourced. supplies of high-quality coffee to on track to achieve our objectives. sustainability program and its In progress 55% of total Nescafé keep up with constantly growing Through the Nescafé Plan, we are We also reached 55% of total impact on people and the planet. coffee supply is responsibly sourced. demand. The availability of arable following up progress through Nescafé coffee that is responsibly By 2020: Nescafé to improve the quality, land is increasingly limited, and a monitoring and evaluation sourced, and 93.9% for Nespresso. quantity and sustainability of its coffee coffee cultivation will need to partnership with the Rainforest supply chain by distributing 220 million Our coffee plantlet coffee plantlets. compete with other food crops Alliance. We have established Ensuring workers’ labor distribution program In progress 21.9 million around the world. Climate change baselines in 10 coffee origins within rights are respected plantlets distibuted in 2018. brings further challenges through our Farmer Connect program. is the largest private We enhanced our monitoring and Since 2010, cumulative 181.8 million the spread of extreme or erratic Over the coming years, we will scheme of its kind plantlets distributed. remediation capabilities on labor weather conditions in some key systematically measure progress rights in Mexico by partnering with By 2020: Nescafé to improve coffee coffee-growing areas. and monitor trends in addition to farm economics in at least four Verité and PPS. Verité provides assessing production costs and coffee-sourcing countries. tailored and timely labor rights other elements related to farm In progress Improvements in training to coffee farmers and our farm economics in two coffee- What we are doing economics. Already, farmers in field teams. In the harvesting sourcing countries. Mexico and Côte d’Ivoire are Helping farmers meet season, PPS visited 176 medium or By 2020: Nescafé to monitor and showing improved farm economics economic challenges large farms to assist us in improve labor rights in at least two and productivity. We are confident coffee-sourcing countries. Coffee farmers experienced a implementing more targeted and that productivity increases, In progress Targeted labor rights difficult year: low prices affected effective activities, including coupled with improved production monitoring program in one coffee- incomes and discouraged relevant remediation actions. sourcing country. costs, make farmers more efficient engagement in sustainability. By 2020: Source toward 100% of the and capable of achieving better However, through the Nescafé Plan Grown Respectfully coffee for Nespresso’s permanent range incomes and livelihoods. ™ and Nespresso AAA program, launched to communicate through its AAA Sustainable Quality Program on coffee sourcing. representing a CHF 68.12 million our Nescafé Plan Moreover, the great work of our field In progress 93.9% of Nespresso investment annually, we work with teams already enables us to see In 2018, we launched Grown coffee sourced through the AAA thousands of coffee farmers to help positive economic developments Respectfully, a new program to Sustainable Quality Program. them enhance efficiency. Our in more coffee origins, making us communicate to consumers the efforts helped farmers in various work of our Nescafé Plan by confident to report further progress Read more online countries to significantly increase over the coming years. conveying real, inspiring farmer

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Nestlé Cocoa Plan Our commitment: Roll out the Nestlé Cocoa Plan with cocoa farmers.

programs began in 2018 and are Achieved our Why it matters Progress against our objectives expected to reach around 15 000 10-year goal The Nestlé Cocoa Plan aims to farmers by 2019. improve the lives of farmers and the to distribute 12 million By 2018: Source 175 000 tonnes of cocoa through the Nestlé Cocoa Plan. quality of their product. It helps cocoa plantlets one Unproductive trees are a major Achieved 198 155 tonnes of farmers address the challenges they challenge for cocoa farmers, year early cocoa sourced through Nestlé Cocoa face through three pillars – better exacerbated by poor agricultural Plan in 2018. farming, better lives and better practices and the lack of By 2020: Source 230 000 tonnes of cocoa cocoa – with activities including rejuvenation of plantations. Strengthening certification through the Nestlé Cocoa Plan. training in better agricultural Through the Nestlé Cocoa Plan, we for better cocoa In progress practices, distributing higher- have now completed our 10-year After signing the Cocoa and Forest yielding plants, promoting gender goal to distribute 12 million cocoa Initiative in 2017, we developed our equality and tackling child labor. plants to farmers a year early. action plan to tackle deforestation in 2018, including an aim to What we are doing Tackling child labor distribute 2.8 million shade trees Our Child Labour Monitoring and in four years. Enabling remote access Coaching farmers for Remediation System (CLMRS), put to educational material better farming in place with the help of the What we’ve achieved by 2018 Volume of Nestlé Cocoa 198 155 Eneza is our project to To make more impact from the International Cocoa Initiative, Plan cocoa procured in 2018 promote the value of available resources, we have continued to grow in our main Cumulative total of plants 14 555 891 education in cocoa moved from training farmers to cocoa supply countries of Côte distributed through the communities using coaching them. While the training d’Ivoire and Ghana in 2018. A total Nestlé Cocoa Plan innovative technology. was educating farmers, it was not of 11 130 children have been Cumulative number and % 981 and 5.6% Five-hundred primary and necessarily resulting in changes on helped by the scheme, and we of child labor cases no secondary pupils in remote the farm. By having technicians have now built or refurbished longer in child labor areas are now able to access visit farms and create bespoke around 45 ‘bridge schools,’ which Cumulative number of 11 130 educational material online. development plans with farmers, have helped around 3149 children children subject to who had fallen out of the school follow-up and/or benefiting we expect to see greater benefits, from remediation activities Read the full story and follow-up visits will help system to return. measure progress. Coaching

Creating Shared Value progress report 2018 30 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Why it matters In recent years, we have mainstreamed human rights work into our activities and policies. This Recent years have seen increasing attention paid has been extended with the adoption of our new to the responsibility of companies to respect CARE Audit Protocol. We have reviewed its human rights in their activities and business content based on the lessons learned over the relationships. Consumers increasingly want to last few years as part of our Human Rights Due know about human rights in the supply chains of Diligence Program, and in particular through products they buy, and there is greater interest human rights impact assessments. As we from investors and regulators in this area. We progress on our human rights journey, we will believe upholding the human rights of the people also shift the focus onto our supply chain in who work for or with us is essential to make our future years as this is clearly where the most business activities and supply chains more salient human rights issues (e.g. child and forced resilient, stable and sustainable. labor) are found.

All our employees globally will receive our new Our contribution human rights training program in key issues. Although our size and scale enable us to have We are also developing a governance structure influence, we know that sector-wide and in all markets to further explore issues around Respecting and sustainable change requires collaboration with human rights. others. We work with expert organizations, such promoting human rights as the Danish Institute for Human Rights (DIHR), the Fair Labor Association, the International Cocoa Initiative, Verité, Issara Institute, Our commitments to Human rights abuses have no place in The Forest Trust and ProForest, to ensure we respecting and promoting our supply chains. Our values are rooted understand the challenges, and we continually human rights in respect, including respect for the refine our approach to implement actions that p.32 Assess and address human rights human rights of every single person have real impact. With the DIHR, we identified impacts across our business activities who works for or with us. our most salient human rights issues – those p.33 Improve workers’ livelihoods and with the greatest risk of negative impact on protect children in our agricultural people within our activities. Specific action supply chain plans address these issues, ensuring human p.34 Enhance a culture of integrity across rights are respected and promoted across our the organization business activities. p.35 Provide effective grievance mechanisms to employees and stakeholders Our work on human rights contributes the most to the following SDGs:

How we map our material issues to the UN SDGs

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Assess and address human rights impacts Our commitment: Assess and address human rights impacts across our business activities.

Embedding human rights in effective ways to identify and risks and opportunities associated Why it matters Progress against our objectives our procedures address issues we find. with human rights at market level. Respecting the human rights of A survey of our markets conducted We launched our new CARE Audit By 2018: Carry out six human rights everyone in our business activities In 2018, we also deployed a toolkit in 2018 found that the majority of Protocol in 2018, which uses impact assessments in our upstream is rooted in our values. We have for Market Compliance Officers to Market Compliance Committees supply chain*. independent assessments to identified 11 salient issues that support the establishment of a discuss human rights-related topics In progress Four human rights measure compliance with our stand out because they are at risk of governance structure to manage as needed, if not periodically. impact assessments have been carried business principles. The new the most severe negative impact out since 2017. protocol has a greater focus on through the company’s activities or By 2019: Have a functioning governance human rights and will help us business relationships and where structure in place in all markets that looks ensure the ongoing monitoring of after human rights risks and opportunities. we can have the greatest impact. Giving palm oil workers human rights issues within our In progress In 2018, we deployed These are the risks that have the a voice own operations. This will allow us a toolkit for Market Compliance most severe potential impact on Officers to support the establishment to dedicate more time and Following our previous HRIA rights holders and the highest of a governance structure to manage resources to the most salient in our palm oil supply chain, likelihood of occurrence. Severity is risks and opportunities associated with human rights issues that we find we are collaborating with human rights at market level. defined as the scope, scale and in our supply chains. Sime Darby Plantation to pilot By 2020: Train all Nestlé employees on remediability of the impact. a project to eliminate human human rights. 5 014 employees trained and labor rights abuses in our In progress 5014 employees What we are doing Malaysian supply chain. A trained on human rights in 2018. on human rights in 2018 helpline, the first of its kind in * Our partner the Fair Labor Our new human rights training Association has an ongoing program the palm oil sector, will enable of assessments in our upstream program, developed with the Because of our focus on workers to report any issues supply chain, which will inform our Danish Institute of Human Rights with working conditions, human rights work. Because of this, mainstreaming human rights in our we have extended this objective and launched in 2018, is a major internal activities, and the time recruitment or safety, either to 2020. step toward meeting our 2020 required to complete human rights online or through a toll-free objective. To date, over 100 000 impact assessments (HRIAs), we number. Workers will be able employees globally have received have decided to extend our 2018 to voice their concerns directly training since 2011, and this new objective to carry out six HRIAs in to trained helpline officers. online program will accelerate this. our upstream supply chain to 2020. Read the full story We review and assess the most

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Protecting children and workers Our commitment: Improve workers’ livelihoods and protect children in our agricultural supply chain.

We are also partnering with Issara In addition, we extended our Why it matters Our new Inclusive Labor Progress against our objectives Institute – a Southeast Asian NGO partnership with Verité, looking at Monitoring System Nestlé opposes all forms of human that tackles human trafficking and labor rights issues in our hazelnut rights violations, including labor will cover more than By 2018: Start reporting on the number of forced labor – to address these supply chain in Italy. A report by workers in agricultural supply chains rights violations. Labor rights are issues in our fish and seafood Verité identified a number of issues 35 000 workers in our having benefited from our interventions included in seven of our 11 salient supply chain. We’ve banned and remedial actions, which we are supply chain on selected salient labor rights issues. issues and are associated with our transshipments at sea and are now currently working with our In progress Work is currently agricultural supply chains. working with Issara to implement suppliers to implement. In our palm underway, and we aim to start reporting once we have reviewed an Inclusive Labor Monitoring oil supply chain, we broadened our interventions against the list of salient System that will cover more than focus, previously on deforestation, issues. What we are doing 35 000 workers in our supply chain. to include human rights. By 2020: Start reporting on the number of Demonstrating appropriate workers in agricultural supply chains having benefited from our interventions standards at sea Addressing rights for on all salient labor rights issues. casual workers Nestlé, with seafood producer Thai In progress Union and NGO Verité, has We continued our work to address inaugurated a demonstration boat labor rights issues in our hazelnut as part of a collaborative effort with supply chain in Turkey in 2018. the Thailand Department of Working with the Fair Labor Fisheries to address labor and Association (FLA), we have moved human rights issues in the Thai the emphasis from audits, which fishing industry. In 2018, 116 boat told us little of the effectiveness of owners, captains and crew interventions, to measuring the received training in good onboard impact that our interventions have. We also completed a four-year living and working conditions, Tackling child labor including adequate, fresh food and project with the FLA, funded by the drinking water, space for resting US Department of Labor, to We’re tackling child labor across our supply chains, especially in cocoa, and eating, first-aid provision and address labor issues, including hazelnut and sugar. Working with NGOs and governments, we’re sanitary toilet facilities. child labor and women’s identifying the risks and strengthening our capacity to address them. empowerment, in the hazelnut supply chain in Turkey. Read the full story

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Our culture of integrity Our commitment: Enhance a culture of integrity across the organization.

Why it matters other initiatives. The 6.4% increase in complaints received through Progress against our objectives We want to promote the highest the Integrity Reporting System is standards across our business. This By 2018: Markets launching a compliance an example of the positive impact communication plan, further reinforcing requires a culture of integrity and of the broad compliance the tone at the top and speaking up. CARE respect, not just in our company communication across the audit enhanced on human rights, and but throughout our supply chain, markets in 2018. schedules defined for Nestlé sites with the new protocol. so that all our employees and Achieved everyone we work with live our 100% of our markets Measuring compliance deployed communication plans and culture and values. through our CARE audits practices, further reinforcing tone at the top and speaking up in 2018. CARE, our compliance audit By 2019: Markets reinforcing compliance What we are doing program, measures compliance as a leadership responsibility based on a with key principles through corporate toolkit for training managers on Promoting compliance with independent assessments. Working business integrity. our business standards with the Danish Institute of Human In progress Corporate toolkit will be developed and launched in 2019. Following the introduction of our Rights, we reviewed the CARE Communication Best Practice program in 2018 to incorporate By 2020: A proactive review is conducted for our compliance activities and policies Toolkit in 2018, we reinforced key current best practices on human in light of our evolving product portfolio. rights, and conducted training, messages across our business In progress We reviewed the about compliance and our implemented audit findings and Embedding human rights in our company-wide audits CARE program in 2018 to incorporate grievance mechanisms. One reduced the number of gaps. current best practices on human A total of 296 audits were carried For the 2018 CARE cycle, we enhanced the human rights focus, with rights, and conducted training, hundred percent of our markets implemented audit findings and deployed communication plans out, with 160 gaps (out of 414) support from the Danish Institute of Human Rights. Instead of a reduced the number of gaps. and practices, further reinforcing successfully closed. specific human rights pillar, we now have human rights embedded the tone at the top and speaking up throughout the whole document, with questions relating to in 2018. These included messages Read more about Nestlé conditions of work and employment, business integrity, safety and from Market Heads, annual Code of Business Conduct health, security, environment, sustainability and relations with the 296 CARE audits compliance messages from Market communities where we operate. were carried out in Compliance Officers, videos, Read more about grievance Read the full story 2018, with 160 articles in employee newsletters, mechanisms and remediation commitment ‘town hall’ meetings and many successfully closed

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Grievance mechanisms and remediation Our commitment: Provide effective grievance mechanisms to employees and stakeholders.

Why it matters their reoccurrence. The RCA measures were taken, including As a result of the issues raised in process was shared across our internal process improvement 2018, one warning letter was issued Progress against our objectives We do not tolerate any violations of markets in 2018 by webinar. and reinforcement. and five people left the company. our Code of Business Conduct or By 2018: Markets conducting root cause Markets implemented RCAs for Remedial measures were taken analyses for selected compliance cases corporate policies. All breaches in severe cases as necessary and Our independent Tell Us including internal process using tools provided by headquarters. our value chain must be reported, as appropriate. channel for raising issues improvement and reinforcement. Achieved In 2018, we so they can be stopped or implemented a root cause analysis During the year, we received system to help us learn from serious prevented. Employees and other Read more about Nestlé Our anonymous reporting 699 messages via Tell Us, our compliance breaches and prevent their stakeholders must also have Code of Business Conduct system in numbers communication channel for external reoccurrence. access to remediation for any In 2018, we received 1837 stakeholders. All comments By 2019: Review grievance systems’ abuses. Effective grievance messages through our Nestlé received have been addressed or effectiveness with internal and mechanisms are essential to external stakeholders to define Integrity Reporting System, which are being dealt with. protecting the human rights of improvement opportunities. enables employees to report people across our value chain. In progress Review process illegal or noncompliant behavior in development. anonymously. The messages By 2020: Grievance systems What we are doing received covered issues such as improvements implemented in leadership style, labor practices, pilot markets. Promote speaking out to discrimination and harassment. We In progress To be implemented Using root cause analysis to remediate issues upon completion of review process. report compliance breaches also received 486 questions from In our continuous efforts to be a employees seeking compliance When a report was received that certain employees were having to better company, we believe it is advice. Thanks to our robust carry large water containers on their shoulders to places their delivery important to learn from our own reporting system, 1568 (85%) lorries could not access, a root cause analysis was carried out to mistakes by conducting root cause cases were closed and 500 (32%) determine the issues and propose recommendations. As a result, Nestlé’s Integrity analysis (RCA) on serious substantiated, including 12 trolleys are now provided along with training in ergonomics and Reporting System compliance breach cases. In 2018, private-to-private bribery cases, manual handling, and a company doctor provides check-ups and and Tell Us are free and we achieved our objective of resulting in 139 employees leaving medical awareness. implementing an RCA system to the company. There were 58 anonymous channels Read the full story help us learn from serious written warnings, eight suppliers’ for communicating compliance breaches and prevent services were terminated and other grievances

Creating Shared Value progress report 2018 35 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Why it matters We also use our scale and size to provide jobs, apprenticeships and training for young people, Everyone is entitled to decent employment, with helping them find employment or gain the skills equal opportunities, a living wage, security, they need to enter the workplace. prospects for development, and the freedom to express their concerns and organize and With our purpose of ‘enhancing quality of life participate in the decisions that affect their lives. and contributing to a healthier future,’ Nestlé Businesses also benefit from the greater places a real emphasis on workplace well-being. productivity that comes from a healthy, secure, We want to inspire people to lead healthier lives, motivated workforce. as we believe a safe, healthy workplace creates a healthier business. Youth unemployment is a serious issue, contributing to global poverty and damaging communities and their futures. It is also important that businesses are more diverse and inclusive, and better reflect society. Businesses like Nestlé need to tackle this to secure a pipeline Promoting decent of future talent. employment and diversity Our contribution As a global company, we are proud of our Nestlé makes equal pay pledge diversity. We have specific commitments to Nestlé has pledged to help accelerate Our commitments to Decent employment and diversity are promote gender balance, within our own progress toward equal pay for equal work, promoting decent fundamental to our culture. As a major operations and in the societies and communities at a UN General Assembly event organized employment and diversity employer worldwide, we have an we source from. In line with this commitment, we by the Equal Pay International Coalition. p.37 Roll out our Nestlé needs YOUth important role to play in providing are also pledged to closing the gender pay gap, The coalition, led by the International initiative across all our operations opportunities for people. We aim to with equal pay for equal work for our employees. Labour Organization (ILO), United Nations p.38 Enhance gender balance in our provide a workplace in which everyone Women and the Organisation for workforce and empower women is treated with dignity and respect, and We actively support diversity in all its forms Economic Co-operation and Development across the entire value chain that offers equal opportunities for all. throughout our business and work hard to (OECD), aims to build a consortium of p.39 Advocate for healthy workplaces promote the inclusion of people from different and healthier employees committed partners to hasten closing the generations and cultures, and those with gender pay gap and achieving equal pay. different abilities and sexual orientation (LGBTI*). We pledged to achieve equal pay for all our employees, and since 2011 we have also Our work promoting decent employment and increased the number of women in diversity contributes to the following SDGs: leadership positions every year.

Read the full story

How we map our material * issues to the UN SDGs Lesbian, gay, bisexual, transgender and intersex.

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Opportunities for young people Our commitment: Roll out our Nestlé needs YOUth initiative across all our operations.

Supporting young Supporting young people in during the year, taking the total Why it matters Progress against our objectives entrepreneurs in Africa the Americas since the program’s launch in 2015 Youth unemployment affects to over 2000. In 2018, Nestlé and the Swiss Led by Nestlé, the Alliance for millions around the world, By 2020: Nestlé needs YOUth initiative Agency for Development and YOUth brings together over 40 commits to deliver: contributing to global poverty. Cooperation launched the Social companies, governments, NGOs, Creating opportunities for • 45 000 to 50 000 apprenticeship and As a major employer, we know the Investment Accelerator program. labor organizations and academies young people in Europe traineeship opportunities. positive difference we can make Designed and led by Ashoka, the to promote youth employability and In Europe, Nestlé celebrated • Continued readiness-for-work events through employment opportunities globally, with an increasing number of program aims to support young entrepreneurship in Colombia, European Vocations Skills Week in and skills development. We offer employees involved in such events. social entrepreneurs by helping Peru, Chile and Mexico. In 2018, the 2018 with a range of activities apprenticeships, training schemes • Enhanced collaboration with external them gain access to finance, alliance increased its commitment including factory visits, workshops, partners to motivate them to join and and initiatives designed to enabling them to create further to young people in the region, roundtables, careers days and to increase impact. equip people with essential growth, impact and employment pledging to create 30 000 job youth training events. Along with • 20 000 to 25 000 job opportunities for workplace skills. opportunities for young people opportunities by 2020, an increase our 200+ partners in the Alliance for people under 30 years of age every year. across Africa. from the original 17 000 target. YOUth, we were able to announce In progress Over 26 000 job opportunities offered to people under What we are doing More than 12 000 young people that the alliance has met its pledge the age of 30. We also partnered with 22 ON have so far benefited. Building on to offer 150 000 young people in 4900 readiness-for-work events Our Global Youth Initiative, Nestlé SLOANE, the largest start-up its success, the alliance expanded Europe jobs, apprenticeships or organized to help prepare young people needs YOUth, is driving our work to campus in Africa, which offers in 2018 to include Argentina, Brazil, traineeships by 2018. for work, with 9800 employees support thousands of young people support to start-ups and small Paraguay and Uruguay. volunteering for such events. access work, training and learning businesses. As well as hosting Nestlé needs YOUth continued to grow, Measuring the value of the reaching more than 300 partners. opportunities, which also helps to masterclasses for the campus to Developing the next Global Youth Initiative alleviate global poverty. Around the help young entrepreneurs generation of chefs In 2018, we undertook, together world, Nestlé helped over 400 000 crystallize their ideas into YOCUTA – YOung CUlinary TAlents with EY and Valuing Nature, a young people in 2018, through job prototypes, we led a ‘start-up – is a Nestlé Professional initiative valuation of our Global Youth Read more on Nestlé needs YOUth offers, apprenticeships and huddle,’ connecting entrepreneurs in the Americas designed to attract Initiative, Nestlé needs YOUth. From traineeships, and support for to a network of investors and young people into the hospitality our investment of CHF 122 million, vocational programs and events. mentors. Activities supported by industry. The program offers the valuation exercise revealed Over 26 000 job Nestlé, including work-readiness nutritional knowledge and practical an ROI-equivalent value of opportunities offered to events, career fairs and life-skills cooking experience with a leading CHF 167 million for Nestlé. The programs, reached more than people under 30 in 2018 chef. In 2018, the program societal value was estimated 12 000 young people in 2018. extended to 18 markets, and more even higher with a return on than 500 new students enrolled investment of 9.2.

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Empowering women Our commitment: Enhance gender balance in our workforce and empower women across the entire value chain.

Closing the gender pay gap Why it matters Progress against our objectives In 2018, in line with our gender Gender equality and women’s balance commitment, we pledged rights, education and empowerment By 2018: Be a gender-balanced company to work toward equal pay for equal by creating the enabling conditions in our are critical to Creating Shared Value work at the Equal Pay International work environment to achieve annual for our business. However, women increases in the percentage of women Coalition event during UN General continue to face challenges in the managers and senior leaders (market Assembly week. With this pledge management members and key roles at global workplace, from under- we are supporting the Coalition the center). representation in business led by the International Labour Achieved 43.2% of Nestlé’s management generally to a lack of Organization, United Nations leadership roles are held by women. access to training, tools and finance Women and the Organisation for By 2020: The livelihoods of women for agricultural workers. Our have been improved in five priority Economic Co-operation and initiatives tackle these issues sourcing locations. Development (OECD) to accelerate throughout our value chain. In progress We have so far made progress toward closing the progress toward this objective in gender pay gap. Colombia, Pakistan, Turkey and Côte What we are doing d’Ivoire. Supporting women in the Developing women leaders supply chain 43.2% of Nestlé’s within our business In Turkey, we support women leadership roles In 2018, the proportion of manager workers in the hazelnut supply are held by women positions in Nestlé globally held by chain. With the Fair Labor Addressing gender inequality among coffee growers women was 43.2%*, helping us Association, we completed a achieve our objective of an annual project to help 400 women through Through our Nespresso AAA Sustainable Quality™ Program, we have increase. Women also comprise awareness raising on labor rights developed a gender analysis tool to explore the employment issues 31.8% of our senior leadership roles and financial literacy and women face in different regions around the world, and to develop (market management members). developing leadership skills. Our solutions for those challenges. Following publication of a report on Strong Women, Strong Farming the findings, the tool has become an integral part of our Gender program helped empower women Equality Strategy. hazelnut garden owners. Read the full story * Following the implementation of our Hire to Retire program, there was a subsequent revision of our grading definitions.

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Workplace safety and health Our commitment: Advocate for healthy workplaces and healthier employees.

Why it matters Know Your Numbers program, with new employees receiving it as that the whole company learns from making it available (offered) to part of their onboarding. Pre-launch the incident. We remain committed Progress against our objectives Our purpose of ‘enhancing quality 87 408 employees, with 36 265 and Q&A presentations took place to achieving our goal of zero of life and contributing to a healthier By 2020: Offer our employees education, having participated. This includes in 2018 to prepare markets for the work-related injuries and illnesses, early screening and programs that future’ starts with each of us. We different variants (global and local upcoming launch. A toolkit, despite the size of our company or support healthier lifestyle choices. hope to inspire our employees to versions) of the Know Your Numbers including videos, brochures, posters the scope of our operations. In progress Know Your Numbers take personal responsibility for their program. The program’s findings and implementation guidance, has program was made available to 87 408 health and safety, making informed also indicate that health awareness been developed at global level to Promoting healthy families employees, in 40 countries so far. decisions and choosing to live and is a priority area to be focused on in ensure consistency across Nestlé. By 2020: Continue leading through At the end of 2018, we had industry forums. work in a healthy and safe way. future activities. implemented our Maternity In progress Nestlé is a member of Work-related illnesses Protection Policy across all our and contributes actively to the most What we are doing Stress in the workplace and fatalities markets, enhancing support to relevant groups driving employee Our Stress and Resilience program employees in general and to new health across industries, including The Musculoskeletal diseases accounted Consumer Goods Forum’s Employee Promoting healthy living in helps build personal resilience for 48% of recordable illnesses in parents and primary caregivers Health & Wellbeing work group and the workplace through customized training and 2018. We believe that improving the working for Nestlé. A few minor the Workplace Wellness Alliance. Our strategic roadmap identifies four tools for specific audiences, ergonomics of our workplaces is key gaps were identified and have focus areas for health: ergonomics, including all employees, human to addressing this. ErgoPro, our ongoing action plans in place. healthy diets, stress and resilience, resource business partners (HRBPs), approach to assessing ergonomic and fatigue and working hours. To and line managers and senior workplace risks, helps us design The policy establishes minimum 2018 Safety & manage health issues, 97% of our management. In 2018, we trained appropriate, ergonomically sound standards for all Nestlé locations Health Awards markets have a health and wellness 694 HRBPs and 362 Employee workplace solutions. In 2018, we and is seen as one of the most Our Safety & Health program in place. Health Champions and Safety and completed assessments of 87% of progressive in the industry. It Health Managers. our routine production tasks, against includes five pillars: Awards allow us an our target of 75%. opportunity to demonstrate Know Your Numbers program • Maternity protection: minimum Promoting #HealthyLives our commitment to the safety In 2018, we continued the 14 weeks paid Despite our best efforts, we are and well-being of our people. implementation of our Know Your #HealthyLives is our main training saddened to report that in 2018, one • Employment protection and They also enable markets to Numbers program, designed to help program for building awareness on employee and two contractors lost non-discrimination learn from each other and us better understand our a holistic approach to health, their lives while working for Nestlé. gain recognition for their employees’ health profile and the encompassing physical activity, • Healthy work environment We carry out a detailed investigation achievements. impact of health on productivity so mental health, nutrition and sleep. for every fatality, involving a • Flexible work arrangement we can build evidence-based Read the full story cross-functional team and local interventions. Twenty-eight markets We aim for all our markets to make it • Conducive work environment senior management. The results are (40 countries) have adopted the available for employees by 2020, to breastfeed reviewed at Group level to ensure Creating Shared Value progress report 2018 39 Creating Shared Value Individuals and families Communities Planet Reporting and governance

For the planet Stewarding resources for future generations

2030 Ambition To strive for zero environmental impact in our operations.

To grow sustainably, we must Our focus on water positive community relationships; consume the planet’s stewardship and then collective action with local resources wisely, and use our stakeholders to address shared Water is one of the three Creating global presence to help make water challenges. This three-step Shared Value (CSV) areas where a positive difference. In line process helps us assess risks, the needs of our business most with our ambition, we are promote best practice and focus closely align with those of society. working to improve water our efforts where it matters most. Although our efforts involve stewardship throughout our making water use in our facilities value chain. We are working more efficient, the potential impact In 2018, Nestlé to reduce emissions across we can have beyond our launched its Caring our value chain by operating boundaries is arguably much more efficiently and using for Water initiative greater. That’s why we work with more sustainably managed partners to protect shared and renewable resources. To In March 2018, our CSV Forum, watersheds, improve water safeguard the environment, attended by Nestlé Chairman Paul management in our agricultural we have a key focus on Bulcke and CEO Mark Schneider, supply chain and widen access to reducing the use of plastics was held in conjunction with the clean water and sanitation in the and making sure those we use eighth Global Water Forum in communities where we operate. are recyclable or reusable. We Brasilia, and focused on water as a driver for helping Nestlé support the are also striving to create less Our approach involves: compliance Sustainable Development Goals. waste, preserve our natural with legal and regulatory habitats and encourage requirements, as well as internal consumers to play their part. standards, as a starting point; Read more online followed by excellence in water stewardship, from efficiency to

Creating Shared Value progress report 2018 40 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Why it matters management and sanitation. It comprises a clear and common water stewardship approach at local We all need water to live. Water is also essential level, inspired by the Alliance for Water for growing the ingredients we source and for Stewardship (AWS), and enabling AWS operating our factories. People also need safe certification of our operations. We are set up to water to prepare or consume many of our support zones, markets and businesses to deploy products, from infant formula to coffee. and implement their Caring for Water plans and leverage them for greater impact in the future. While water security is a global problem, the impact is felt locally. Global demand for water Caring for Water’s ambition is ‘Together, we already exceeds supply but resources are not steward water resources for future generations,’ equally distributed across the planet. These and it will play a key role in helping us achieve pockets of water scarcity are due partly to our ambition of zero environmental impact in population growth and urbanization increasing our operations. consumption in already water-stressed locations, thus contributing to the lack of clean In 2018, we conducted an impact valuation of our drinking water and sanitation experienced by initiative, considering a range of factors such as 40% of the world’s population (UN). the use of water in factories, our global WASH Caring for water project, and particularly water use in agriculture Our contribution and our investments in catchment areas, as Our commitments to Access to clean water and adequate these are where the biggest potential for return protecting water supplies sanitation is a fundamental human right. To preserve shared water resources, on investments exists. We have a long way to go, and are refining measurement methodology and Protecting and preserving the water collaboration is the only option. We work with a p.42 Work to achieve water efficiency and addressing data gaps. In 2019, we will also focus sustainability across our operations resources we share with others is a major wide range of partners to protect water resources at watershed level; support our on understanding better the business value of p.43 Advocate for effective water policies priority for us. We achieved our suppliers to efficiently grow the ingredients we the initiative. and stewardship commitment to treat the water we p.44 Engage with suppliers, especially need; and work to improve communities’ access those in agriculture discharge effectively in 2017. A new to clean water and sanitation. Our efforts were Implementing our initiatives digital compliance assessment and p.45 Raise awareness on water recognized when we received a 100/100 score in A guidance document, the Caring for Water conservation and improve access monitoring tool now ensures all our plants the Water-Related Risks section of the 2018 Dow playbook, will direct our specialists in to water and sanitation across our meet the exacting standards of our Nestlé value chain Jones Sustainability Index. implementing water stewardship initiatives, Environmental Requirements for water focusing on four key areas: in our factories, quality. Our work here will continue Our Caring for Water initiative continuously improving water use efficiency; in through the Caring for Water initiative. In May 2018, we launched the Caring for Water watersheds, working with partners to protect flagship initiative, which will guide and focus our shared water resources; across our agricultural Our work on caring for water contributes local efforts where, and how, they matter. The supply chain, where water challenges are putting to the following SDGs: initiative will help us demonstrate our support and the sourcing of our raw materials at risk; and in contribution to United Nations Sustainable the communities where we are present, to widen Development Goal 6 (SDG 6) on water resource access to clean water and sanitation.

How we map our material issues to the UN SDGs

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Improving water efficiency Our commitment: Work to achieve water efficiency and sustainability across our operations.

Why it matters What we are doing Progress against our objectives Water is vital to Nestlé: for growing In 2018, we withdrew 127 million m3 ingredients, for our production of water for our direct use. Through By 2020: Reduce direct water withdrawals per tonne of product in every processes and for preparing our investment in new, better- product category to achieve an overall products. We must therefore use performing technologies together reduction of 35% since 2010. water as efficiently as possible in with the adoption of best practices, In progress 29.6% reduction in our operations – especially with we saved 3.7 million m3 of water in direct water withdrawals per tonne around one in three of our facilities our factories. This allows us to of product across every category since 2010. located in a water-stressed area. continue improving our overall By 2020: Carry out 40 new Water We are pleased to have made water use efficiency, toward our Resource Reviews (WRRs) in selected significant progress in recent commitment of a 35% reduction. manufacturing facilities and all years, but remain committed to greenfield sites. doing more. In addition to 26 Water Resource In progress 11 new WRRs Reviews (WRRs) performed overall, conducted in 2018. Cumulative of 26 WRRs at the end of 2018. We saved in the Americas, we have made a commitment to implement a water By 2020: Implement 10 new water 3.7 million m3 stewardship initiatives in selected stewardship plan in every factory by locations, with specific focus on of water through 2020 – a total of 14 factories in three high-priority manufacturing facilities. water-saving projects in years. The plans will promote both Implementing zero-water technology in South Africa Achieved 14 factories have a reuse and recycling of water to drive water stewardship plan through our factories in 2018 The town of Mossel Bay in South Africa is subject to regular droughts AWS certification. efficiency within our factories as and was declared a disaster area after one prolonged drought. A well as encourage collective actions project was launched to make the Nestlé dairy factory there as at catchment level and stakeholder self-sufficient in water as possible by using water recovered from the engagement with communities milk evaporation process. The factory now has excellent-quality close to our manufacturing sites. recycled water and is even able to generate energy from the process.

Read the full story

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Water stewardship advocacy Our commitment: Advocate for effective water policies and stewardship.

Why it matters Nestlé Waters has committed to certify all its factories to the AWS Progress against our objectives Water is a resource we all share. Standard by 2025. Working alongside neighbors and By 2020: Continue to build the 2030 Water Resources Group public–private other stakeholders is the only way Organizing global partnership by adding one more state or we can address the complex collaborative events country per year. challenges associated with water In progress No new countries/ In March 2018, we assisted the stewardship. We believe that states were added during 2018, Brazilian Business Council for however the WRG continues to work in proactive, long-term engagement Sustainable Development and the 14 countries and states. and partnerships with a wide range local chapter of the UN Global By 2020: Continue supporting the of stakeholders can help to define, Compact with the organization of a Alliance for Water Stewardship Standard implement and evaluate solutions by implementing it in five new locations. business day at the World Water to the complex environmental In progress 14 locations where Forum in Brasilia. We also co- challenges that we face. Alliance for Water Stewardship organized, with the AWS, a Standard deployed. stakeholder dinner at World Water By 2020: Apply the new Farm and What we are doing Week in Stockholm, to discuss the Catchment Level Assessment tool role of certification in water prepared by the Sustainable Agriculture Partnership with the AWS to Initiative Platform (SAI) in at least five stewardship. agriculture supply sourcing locations. protect water resources Achieved We have applied the Read more on the importance of Engaging stakeholders to share the challenges The Alliance for Water Stewardship the AWS Standard Farm and Catchment Level (AWS) International Water Assessment tool in Brazil, Iran, In Lebanon, we worked with the Shouf Biosphere Reserve on a Pakistan, Vietnam and South Africa. Stewardship Standard provides Read more on the company’s vision two-year monitoring and hydrogeological study of the area’s for shared water management environmental, social and economic groundwater. The study found that the groundwater balance was criteria against which companies “Water stewardship is too overall positive. However, due to important seasonality and climate can assess their water stewardship important to be a competitive effect, more needs to be done to better manage water resources, Nestlé Waters has practices. We certified the last two especially during the dry periods. area. We strongly encourage other committed to certify all of our five water-bottling facilities in organizations to engage with Read the full story California in March 2018, meaning the AWS Standard.” its factories to the AWS 14 of our facilities (Pakistan, Standard by 2025 Canada, US, China, Thailand, Carlo Galli, Head of Sustainability, Ethiopia and France) have now been Nestlé Waters and Technical certified by the AWS Standard. Director Water Resources, Nestec S.A.

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Engaging with our suppliers Our commitment: Engage with suppliers, especially those in agriculture.

according to the water stress Improving water efficiency for Why it matters Progress against our objectives index, and are working on several Vietnamese coffee farmers Our greatest challenge to reducing initiatives to improve water Vietnam is the second-largest By 2020: Implement all action plans water consumption lies in efficiency in our dairy supply chain. coffee producer in the world. defined for improved water management addressing the impacts of our However, small-scale coffee in our upstream supply chain for complex agricultural supply chains. coffee, sugar, dairy and cereals in farmers in the country have been Water management and 10 projects high-priority locations. facing the challenge of rapidly conservation is specific to a locality In progress 10 projects in in water-stressed areas declining water levels. Through our water-stressed areas across and is usually temporal in nature. across 10 countries More Coffee with Less Water 10 countries. Our research indicates that we can Improving water project with the Swiss Agency for achieve significant improvements management for Development and Cooperation in water use simply by introducing Colombian (SDC), we have been supporting better agricultural techniques at a Developing water-saving water efficiency training, covering coffee farmers farm level. techniques for dairy farmers topics such as water resource In Pakistan, Morocco and Iran, Agriculture accounts for management for coffee irrigation, where drought and water-stressed around 70% of the world’s pruning and grafting techniques, What we are doing areas are issues, we are working water use. Manos al Agua, fertilization and composting, and with dairy farmers to establish the supported by Nestlé, the Helping farmers manage water harvesting techniques and use of water meters and develop Colombian Coffee Growers challenges around the world post-harvest technology. In 2018, water-saving techniques for animal Federation, Cenicafé and the 45 287 farmers participated in We are working with our suppliers feed production. In Brazil, we are Netherlands Enterprise training sessions in four provinces, across all of our agricultural supply supporting farmers to install water Agency, was an innovative Dak Lak, Dak Nong, Lam Dong and chains to ensure water is used meters and improve manure program completed in 2018 Gia Lai. effectively. We have a particular management techniques. Together that empowered Colombian focus through our Agriservices with Embrapa, the Brazilian coffee farmers to develop In partnership with the SDC, we network on dairy and coffee, as Agricultural Research Corporation, regional solutions for water also launched a free app in late this is where we can make the most we are working on projects to train management and tackle 2018, available in Vietnamese and impact. Based on the principle of farmers in good farming and climate change. ‘Do what matters, where it English, that provides farmers with manure management practices. Read the full story matters,’ we have mapped our short-term (3.5-day) rainfall and fresh milk-sourcing districts temperature forecasts to help them better manage water usage on their farms.

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Access to water, sanitation and hygiene Our commitment: Raise awareness on water conservation and improve access to water and sanitation across our value chain.

Why it matters surrounding our operations and supply chain. Progress against our objectives Access to safe water, sanitation and hygiene (WASH) is a basic human By 2020: Implement detailed guidelines Collaboration is at the heart of our on human rights to water and sanitation right. There is a clear and compelling efforts to ensure people’s access to due diligence in all Nestlé markets and economic case for all businesses to clean water. We work with key agricultural supply chains. help address the current situation. businesses, associations and NGO In progress In 2018, we started our Providing WASH facilities partners, and have also been roll-out in medium-risk markets of the contributes to employee health, as Nestlé Guidelines on Respecting the working with the International Human Rights to Water and Sanitation. well as broader societal goals, such Federation of Red Cross and Red By 2020: 600 000 beneficiaries in local as reducing mortality and morbidity, Crescent Societies (IFRC) to communities have access to water, strengthening community resilience improve access to safe water and sanitation or hygiene projects around our and preserving personal dignity. sanitation in our supply chain. manufacturing facilities and key agricultural supply chains. Achieved Target was met in 2017. How we’re respecting rights At the end of 2018, 758 604 people What we are doing to water around the world were benefiting We reached our target figure of from our WASH programs, and In 2018, we continued to roll out our 316 474 people in local communities beneficiaries ahead of time. Nestlé Guidelines on Respecting given access to clean water and However, we continue our work on the Human Rights to Water and sanitation through our partnership with the IFRC since 2005. this issue and will keep reporting Sanitation, to ensure our operations progress against the 2020 objective. and upstream supply chain do not In 2019, we will undertake a full have a negative impact on the review of all commitments to scope human right to water. The out our work beyond 2020. guidelines, launched in high-risk markets in 2017, were extended in 316 474 beneficiaries Our partnerships are having an 2018 to our medium-risk markets. Bringing clean, safe water to Papua New Guinea reached through our impact on the world around us In Papua New Guinea, six out of 10 people do not have access to WASH project with We have a twofold approach to In the Americas, we have started clean water. We’re supporting the installation of new wells and water the IFRC WASH: we respect the human right to implement the Community pumps to bring clean, safe water to local communities. to water in line with the ‘do not Relations Process tool in at least Read the full story harm’ principle, and we support one factory in each of the access to water in communities five markets.

Creating Shared Value progress report 2018 45 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Why it matters Changes in weather, temperature and water availability are already affecting farmers who supply Nestlé. Following the IPCC report released in October 2018, there is now a sense of increased urgency to the calls for land management interventions to deliver greenhouse gas (GHG) emission reductions on a global scale, and for companies to build resilience into their value chain.

Our contribution Climate-Friendly Milk Our approach to tackling the environmental Cows that live longer and produce milk for challenges associated with climate change longer emit around 5% less greenhouse involves reducing our operational GHG gas per kg of milk. If further measures are emissions across our value chain in line with added, emissions will even drop by Acting on science-based targets. We’re also helping our 10%–20% – a significant contribution suppliers adapt to a changing climate by against global warming. Nestlé climate change distributing drought-resistant coffee and Switzerland, together with other cocoa plantlets. companies and local suppliers, is committed to promoting a sustainable Our commitments to acting Climate change is one of the most Our efforts to act on climate change areas Swiss dairy industry through the Climate- on climate change important global issues of our time. earned a score of 100% in the Climate Strategy Friendly Milk pilot project. The project is p.47 Provide climate change leadership It causes extreme weather events that section of the 2018 Dow Jones Sustainability funded by Nestlé Switzerland and the p.48 Promote transparency and impact a range of factors, from water Index, and we ranked first in the Environmental Federal Office for Agriculture in a public– proactive, long-term engagement availability and growing conditions to dimension overall. We were also one of only 59 private partnership. in climate policy migration patterns. As a global food and companies included in CDP’s Supplier Read the full story beverage company, we are also Engagement leader board (see the Global impacted by climate change. We are Supply Chain report), and retained our place in determined to help our farmers build CDP’s Climate A list. resilience to these changes as well as reducing our impact on the climate.

Our work on acting on climate change contributes to the following SDGs:

How we map our material issues to the UN SDGs

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Climate change leadership Our commitment: Provide climate change leadership.

reduction, mainly due to increased We remain on track to meet our Why it matters Emissions per tonne Progress against our objectives responsible sourcing of key objective for warehouse energy of product distributed Climate change is affecting farmers commodities. consumption, with emissions in across the globe, including those are down 7.6% Ongoing: As a member of RE100, aim to our top 100 distribution centers in procure 100% of our electricity from who supply us. Reducing GHG Increasing our renewable 2018 down 38.7% (since 2014) to compared with 2014 renewable sources within the shortest emissions, switching to renewable practical timescale. electricity procurement 5.6 kg CO2eq per tonne of product. energy sources and taking other In progress 34% electricity We aim to buy 100% of our actions to mitigate the effects of The Nestlé Policy on purchased from renewable sources. electricity from renewable sources Environmental Sustainability climate change are all necessary to By 2020: Reduce GHG emissions (Scope as soon as it’s practical to do so. help ensure the ongoing success of 1 and 2) per tonne of product in every Since 2018, all the electricity we product category to achieve an overall our own business and those in our buy in France has been from reduction of 35% in our manufacturing supply chain, as well as protecting Giving a BOOST to the operations versus 2010. renewables. Purchasing renewable the world around us. NHSc supply chain In progress 32% reduction in GHG electricity helped us avoid 967 000 emissions (Scope 1 and 2) by product tonnes of CO2eq in 2018. Because cartons of our protein category since 2010. supplement BOOST were What we are doing By 2020: Reduce GHG emissions per Making our distribution and reaching retail sites damaged, tonne of product by 10% in our We take a holistic, science-based warehouses more efficient the Nestlé Health Science distribution operations versus 2014. target approach to tackling climate (NHSc) supply chain team In progress 7.6% reduction of change, reducing our GHG We transport around 150 000 reconfigured the pallet layout. GHG emissions per tonne of product emissions, increasing our use of tonnes of product daily, generating By filling open space with extra distributed, covered in reporting in our distribution operations, versus 2014. renewable energy and switching to 3.26 million tonnes of GHGs in 2017 cases, the team increased By 2020: Reduce GHG emissions by 10% cleaner fuels. We remain on track (our reporting covers 71% of our payloads and ensured there was total product volume)*. Working in the 100 major warehouses we use to achieve our objectives, as we less waste from damaged goods. versus 2014. with third-party logistics providers, have reduced our overall Scope 1 In the first 12 months in which In progress 38.7% reduction of and 2 GHG emissions per tonne of we aim to reduce distances, fuel the new configuration – now GHG emissions per tonne of product in product by 32% versus 2010. consumption, emissions, noise and standard practice – was used, the 100 major warehouses we use congestion. Emissions per tonne of versus 2014. 104 fewer trucks reduced CO2 Expand the use of natural We also aim to reduce Scope 3 product distributed were down emissions by 108 tonnes and By 2020: 7.6% in 2017 compared with 2014. refrigerants, which do not harm the GHG emissions by 8% (from our saved USD 443 000 (CHF 449 202). ozone layer and have a negligible impact 2014 baseline) by 2020. At the end Where road transport (71% of our on climate change, in our industrial of 2017, we had achieved a 3.8% total transport) is necessary, we try Read the full story refrigeration systems. to use natural gas in our trucks. In progress 10 new refrigeration systems using natural refrigerants installed. *2017 figures are the latest available data at the time of publication. Creating Shared Value progress report 2018 47 Creating Shared Value Individuals and families Communities Planet Reporting and governance Read more about this commitment

Proactive engagement on climate change Our commitment: Promote transparency and proactive, long-term engagement in climate policy.

Why it matters What we are doing Progress against our objectives Climate change is a global issue; it We continued to implement the can’t be tackled by one company. It’s Guide for Responsible Corporate By 2020: Implement the Guide for Responsible Corporate Engagement in going to take a seismic shift in how Engagement in Climate Policy in Climate Policy developed by CDP, society thinks and operates if we’re 2018. This included disclosing our the UNGC, Ceres, The Climate Group, going to stabilize GHG emissions, let actions on climate change through the WWF and the World Resources Institute (WRI). alone reduce them. As well as our public reporting and stakeholder In progress putting policies and initiatives in engagement. We have continued to disclose our actions on climate place to reduce our own carbon change through our public reporting footprint, we actively participate in a FReSH collaboration for and stakeholder engagement. range of regional and global healthier diets programs designed to support the We are evolving our foods and development of long-term climate beverages to be not just healthier policy. An article in the scientific but also to have less environmental journal Nature, published in 2018, impact. However, true food system describes three levers of change transformation is only achievable needed to keep the food system through industry-wide global within environmental limits: action, which is why we engage in improving agricultural technology multi-stakeholder collaborations and management; plant-forward aligned with our climate change In 2018, we became diets; and reducing food loss and commitments. In 2018, we became Partnering with major food producers to announce the a founding member waste. Operating as we have done in a founder member of the World Clean Power Plan the past will simply not work. of the World Business Business Council for Sustainable Nestlé’s thinking is fully aligned with In April 2018, Nestlé joined together with partners across the food Council for Sustainable Development’s FReSH project, this viewpoint. industry to submit a public comment to the US Environmental which aims to help achieve healthy, Development’s Protection Agency supporting the Clean Power Plan, which enjoyable diets for all that are FReSH project regulates GHG emissions. We strongly support the Clean Power Plan produced responsibly within the and believe it should be left in place or an even stronger alternative planet’s resources. The project identified and enforced includes a collaboration with KU Leuven University in Belgium to Read the full story model sustainable food systems.

Creating Shared Value progress report 2018 48 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Why it matters Soils To protect the health of soil, we are working with If the whole world consumed natural resources farmers in the US to reduce fertilizer run-off. at the same rate as the richest countries, we We are also increasing the sourcing of organic would need between three and five planet ingredients, which leads to improved soil health. Earths (Global Footprint Network). This unsustainable demand for raw materials, Oceans coupled with climate change, is encroaching on natural habitats and contributing to the ongoing Oceans are important for Nestlé, both for the decline in species populations. The extinction seafood we source from them and their key role rate we see today is estimated by the WWF to in addressing climate change. Unsustainable be between 1000 and 10 000 times higher than fishing, plastics and agricultural run-off are all would occur naturally if humans weren’t around. placing stresses on oceans. By responsibly sourcing seafood, investing in waste The amount of waste we create is also rising infrastructure to stop plastic leakage, alarmingly. The quantity of solid waste supporting the Global Ghost Gear Initiative, generated each year – much of which finds its working with farmers to manage soils so that way into water bodies and oceans – is expected there is no excess run-off, we are acting to Safeguarding to reach 2.59 billion tonnes by 2030 (World reduce the stresses upon the ocean. Our new Bank) and to continue climbing throughout the initiative aims to have 100% reusable or century. In lower-income countries, 93% of this recyclable packaging by 2025. the environment waste is discarded through open dumping. Even a third of the food we produce is wasted or lost Going beyond Our commitments to We depend on forests, soils, the oceans (FAO). With spiraling consumption, Beyond our operations, we work with other safeguarding the environment and the climate for a sustainable supply mismanagement of solid waste and inefficient stakeholders to raise awareness, identify risks production processes impacting the world and agree actions, from regulatory intervention p.50 Tackling plastic waste of resources for our operations. We aim to use and manage resources sustainably around us, we need to transform how we use to participation in hands-on activities. Through p.51 Improve the environmental and reuse the world’s natural resources. performance of our packaging by operating more efficiently, responding partnerships and multi-stakeholder initiatives, p.52 Reduce food loss and waste to climate change, reducing food loss and we have helped develop guidelines to reduce food waste and we’re working on a project to p.53 Provide meaningful and accurate waste, and caring for water. Our ambition Our contribution environmental information is to strive for zero environmental impact introduce simple, standardized food date labels and dialogue in our operations. Forests by 2020. p.54 Preserve natural capital We have partnered with Airbus and The Forest At the end of 2017, we had achieved Trust to implement Starling, a satellite-based our commitment to assess and optimize service, to monitor 100% of our global palm oil Our work on safeguarding the environment the environmental impact of our supply chains from 2019. The program will be contributes to the following SDGs: products. We evaluated and addressed extended to cover pulp and paper and soya the sustainability hotspots for 22 product supply chains at a later stage. categories, and continue to build on How we map our material our efforts. issues to the UN SDGs

Creating Shared Value progress report 2018 49 Creating Shared Value Individuals and families Communities Planet Reporting and governance

“We want to be a leader in developing the most sustainable packaging Tackling plastic waste solutions for our food and beverage products. To achieve this, we are enhancing our research capabilities to develop new packaging materials Our vision is that none of our packaging, and solutions. Through this, we hope to address the growing packaging including plastics, ends up in landfill or as litter. waste problem, in particular plastics.“ Mark Schneider, CEO, Nestlé

We believe that there is an urgent recyclers, developing design will start rolling out plastic-free 2. Shaping a waste-free future need to minimize the impact of guidelines for flexible packaging, as packaging in 2019 and Milo will • Nestlé is the first food company packaging on the environment. Our well as the infrastructure needed to introduce paper-based pouches to partner with Project STOP, a vision is that none of our packaging, collect, sort and recycle it across in 2020. frontline initiative aimed at including plastics, ends up in landfill the continent. • Nestlé Waters will increase the addressing the leakage of plastic or as litter, on land or in our oceans. recycled PET content in its into the ocean, through In 2018, we therefore announced Plastic pollution is a complex issue bottles to 35% by 2025 at global partnerships with cities and our commitment to make 100% of that requires a holistic view and a level and will reach 50% in the governments in Southeast Asia. our packaging recyclable or well-orchestrated effort. We are United States, with specific reusable by 2025. This is in line with taking the following steps to tackle • We signed the New Plastics focus on Poland Spring. In the Ellen MacArthur Foundation’s the issue: Economy Global Commitment, addition, Nestlé Waters will New Plastics Economy (NPEC), an initiative led jointly by The increase the recycled PET solutions that are functional, safe which seeks to address plastic 1. Pioneering alternative Ellen MacArthur Foundation content for its European brands and sustainable. Based in waste and pollution at its source. materials and UN Environment. Acqua Panna, Buxton, Henniez Lausanne, Switzerland, the institute • Creation of the Institute for and Levissima to 50% by 2025. 3. Driving new behavior will employ around 50 people and The NPEC seeks to address plastic Packaging Sciences to evaluate include a state-of-the-art laboratory waste and pollution at its source. At • Nestlé has a global partnership • All 4200 Nestlé facilities and develop various sustainable complex as well as facilities for the 2018 Our Oceans conference in with Danimer Scientific to worldwide are committed to packaging materials and rapid prototyping. In collaboration Indonesia, we signed the NPEC develop a marine biodegradable eliminating single-use plastic collaborate with industrial with our global R&D network, Global Commitment. The and recyclable bottle for its items that cannot be recycled. partners. academic partners, suppliers and Commitment aims to rethink the water business. • Nestlé employees worldwide will start-ups, the institute will evaluate future of plastics by applying • Between 2020 and 2025, we will • Nestlé has initiated a dedicate their volunteering days the safety and functionality of circular economy principles, in phase out all plastics that are collaboration with PureCycle to the removal of litter and various sustainable packaging which plastic never ends up as non-recyclable or hard to recycle Technologies to produce participate in clean-up activities materials. It will focus its research waste. We are also leading an NPEC for all our products worldwide. food-grade recycled on World Ocean Day (June 8). on key areas such as recyclable, working group (Pioneer Project • Starting in February 2019, Nestlé Polypropylene. biodegradable or compostable SEA) on mapping plastic material will begin to eliminate all plastic Nestlé Institute of polymers, functional paper, and and waste flows in Southeast Asia. • We have joined NaturALL Bottle straws from its products. Packaging Sciences new packaging concepts and In Europe, we are a member of Alliance, which aims to develop We also announced, in 2018, the technologies to increase the CEFLEX: a Circular Economy for • Roll out paper packaging for 100% bio-based PET to be used creation of the Nestlé Institute of recyclability of plastic packaging. Flexible Packaging, a consortium of Nesquik in the first quarter of for our water business. Packaging Sciences, which aims to more than 100 organizations 2019, and for the Yes! snackbar in Read more online discover and develop packaging ranging from material producers to the second half of 2019. Smarties

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Improve packaging performance Our commitment: Improve the environmental performance of our packaging.

Since 2015, we have avoided Reducing plastic in bottles Why it matters Progress against our objectives the use of 118 710 tonnes of In 2018, Nestlé Waters North Plastic waste, and in particular packaging, keeping us on track America introduced a new 700 ml plastic-based marine pollution, is By 2020: Continue to systematically to meet our objective. Nestlé Pure Life® bottle made from analyze and optimize our packaging one of the biggest environmental 100% recycled plastic. We have portfolio, avoiding the use of at least issues the world is facing today. 140 000 tonnes from 2015 to 2020. Our total global plastic and also reduced the plastic content Packaging is a major contributor to In progress 118 710 tonnes of laminate use in packaging in 2018 of our half-liter water bottles by such waste. At the same time, it was 1.7 million tonnes. packaging have been avoided 65%, saving a cumulative amount since 2015. remains important for purposes such The plastics types used were of over 300 000 tonnes of plastic By 2020: Drive alliances with relevant as protecting foods and beverages PET (Polyester) (48.3%), PE since 1994. stakeholders to address packaging waste during transportation, extending the (Polyethylene) (24.1%), PP management and marine littering shelf life of food and preventing food in 10 relevant markets. (Polypropylene) (11.8%), PO In Europe, we are members of the waste. This makes it essential not In progress (Polyolefin) (1.1%), Laminates European Federation of Bottled 8 alliances with just to reduce the amount of The packaging of relevant stakeholders to address (10.8%) and PVC/PS/PA/PC/ABS Waters, which pledged in May packaging used, but to make packaging waste management and (Polyvinyl Chloride/Polystyrene/ 2018 to collect 90% of all PET the future marine littering in 10 relevant markets. packaging recyclable or reusable. Polyamide/Polycarbonate/ bottles by 2025, use at least 25% Doing his part to help protect Acrylonitrile-butadiene-styrene) recycled PET in water bottles by the environment is motivation (1.7%), Not Allocated (2.2%). What we are doing 2025, invest further in eco-design for Xavier Caro as he works to and research on non-fossil-based develop new packaging We used 4.7 million tonnes of plastic materials, and engage materials at Nestlé’s Product packaging material in 2018 In an In 2018, we saved further with consumers. Technology Center in effort to more accurately track the CHF 43.2 million Germany. He has dedicated use of packaging materials, we through packaging his career to making moved to measuring data based on packaging more sustainable. sales, rather than procurement reduction projects spend. As a result, it is not possible Read the full story to provide a comparison with 2017 data.

Creating Shared Value progress report 2018 51 Creating Shared Value Individuals and families Communities Planet Reporting and governance Read more about this commitment

Reducing food loss and waste Our commitment: Reduce food loss and waste.

Why it matters We have already implemented and waste. Nestlé UK and Ireland actions to reduce losses, including also launched an initiative that aims Progress against our objectives About one-third of food intended improved collection systems. As a to redistribute meals across the for human consumption is lost or Ongoing: As a member of Champions result, milk losses from farm to UK. Delivered in partnership with 12.3, accelerate progress toward halving wasted. Nutrient-rich foods, such factory in 2018 were measured at Company Shop and WRAP, the food waste by 2030. as fruit and vegetables, are lost at just 0.3% of production. Waste Not, Want Not methodology In progress We are implementing high rates – up to 50% – and there is will assess the main causes of food actions to reduce food losses across also a significant environmental Partnering to reduce waste waste within food operations and our value chain. impact. This loss and waste is due reduce them at source where By 2020: Achieve zero waste for disposal Nestlé Nordic has joined the in our sites. to a range of issues in production, possible. By 2019, any surplus food Denmark Against Food Waste In progress Volume of waste for handling and storage, processing should be redistributed to initiative, which brings together disposal reduced by 91.6% (since 2008). and packaging, distribution and Tackling food waste in manufacturers and retailers to commercial and charitable consumption. The social, Latin America and the By 2020: Make date labels reduce waste in Denmark by 50% organizations rather than being understandable to our consumers to environmental and economic costs Caribbean by 2030. The first step has seen used for animal feed or anaerobic reduce food waste at consumption stage. arising from food loss and waste participants commit to measuring digestion, and the project aims to Nestlé helped launch In progress We continue to develop range from avoidable water use and initiatives to make food date labels more and publishing progress on food redistribute 2 million extra meals. #SinDesperdicio (‘without GHG emissions to food insecurity. understandable for consumers. waste annually. We also partnered The approach has already been waste’), a platform led by the with the Inter-American tested at several Nestlé factories. Inter-American Development We have estimated our own losses Development Bank to support its Bank and supported by other along our entire value chain at 12%. #SinDesperdicio (‘without waste’) We are also measuring the major food and technology Milk losses in our dairy This includes the losses upstream initiative in Latin America and the environmental and nutritional companies. Taking a holistic of the raw materials that we buy, chain were just 0.3% of Caribbean. Read our case study to impact of food loss and waste, key approach, it aims to fight and the losses in manufacturing, production in 2018 find out how we used food date measurements that are too often back against the 127 million distribution and at the labels to help prevent food being overlooked. tons of food lost and wasted consumption stage. discarded when it is still good to eat. every year in Latin America Read about food availability Reporting food loss and waste and the Caribbean. and dietary diversity In 2018, Nestlé UK and Ireland Since 2016, we have been reporting What we are doing Read the full story worked with other members of the the food loss and waste generated Reducing milk losses IGD and WRAP Food Waste in our factories according to the We are measuring the milk loss Measurement Task and Finish World Resources Institute’s Food from farm to factory gate in 30 Group to develop guidance on Loss and Waste Protocol. countries in our dairy supply chain. measuring and reporting food loss

Creating Shared Value progress report 2018 52 Creating Shared Value Individuals and families Communities Planet Reporting and governance Read more about this commitment

Promoting sustainable consumption Our commitment: Provide meaningful and accurate environmental information and dialogue.

Why it matters Our website now features a wide smoothies with whole grain rice and range of stories, advice and fruit juice, and Häagen-Dazs has Progress against our objectives Product information can help information on ways to lead launched a vegan ice-cream line. consumers behave more By 2020: Improve the availability and healthier lives and consume food consistency of fact-based environmental sustainably; for example, by more sustainably – from reducing Helping improve food systems information for consumers on our digital recycling more or using less energy. and other channels. sugar and healthy snacking to Through our work as member of Our international scale and reach In progress More than 85% of our enjoying meatless meals and the FReSH project, we’ve helped give us direct access to millions of corporate web pages have fact-based portion guidance. Articles are create a toolkit to encourage people, enabling us to share environmental information available for written by subject experts and sustainable consumption. A consumers. information that could make a offer practical, easy-to-follow collaboration between FReSH and positive difference on a global scale. advice. KU Leuven University, the project has explored how to make Telling real coffee- What we are doing Nestlé brands offering more successful interventions to make sustainable choices food systems work better. In growing stories Making information available In the US, we offer on-pack October 2018, we published the Grown Respectfully tells the to consumers guidance through our Thoughtful toolkit, a holistic assessment stories of the real-life farmers The availability and consistency Portion box, found on two-thirds of of food system activities and who have signed up to the of fact-based environmental our foods and beverages. The box their outcomes. Nescafé Plan. By telling their information for consumers on provides suggested portion sizes stories, we aim to make our digital and other channels and has helpful information not More than 85% of our environmental information has improved by 15% since 2017. found on the nutrition facts label. corporate web pages real and relevant and promote dialogue with our consumers. Now more than 85% of our have environmental corporate web pages have In addition, our Lean Cuisine brand Read the full story environmental information now offers plant-based options, information available available for consumers. Nestlé Brazil sells 100% plant-based for consumers

Creating Shared Value progress report 2018 53 Creating Shared Value Individuals and families Communities Planet Reporting and governance Read more about this commitment

Protecting natural capital Our commitment: Preserve natural capital.

Why it matters pulp and paper and soya supply nutrient-depleted soil. In 2018, chains at a later stage. Our supply Nestlé Purina funding helped to Progress against our objectives The success of our business relies a chain is currently estimated to be drive grower group engagement to great deal on the sources of our raw By 2020: 70% of the volume of our 77% deforestation free for our top bring adoption of soil health 14 priority categories of raw materials materials: land, soil, trees and water. five commodities linked to practices to at least 30 million acres. have been assessed against our We work collaboratively to protect deforestation risks. Responsible Sourcing Standard the health of these habitats, requirements and are compliant, or Protecting the oceans improvement plans to preserve natural focusing on shared water resources, Improving water quality We understand how vital the capital are ongoing. eliminating deforestation from our In the US, Nestlé Purina is working oceans are, both for the resources In progress 63% of the volume of supply chain, improving soil with farmers and other partners to they provide and their role in our 14 priority categories of raw management, protecting the Assessing impacts materials are responsibly sourced. create wetlands and woodlands regulating global temperatures. oceans and preserving biodiversity. along the Wabash River in Indiana In 2018, our largest shareholder, on biodiversity and Illinois, allowing nutrients and Norges Bank, issued Ocean Biodiversity is challenging to What we are doing sediment to be removed before Sustainability, a detailed document measure. Compared with water re-enters the river. To date, highlighting the importance of GHG emissions, there is no Stopping deforestation we have engaged with 13 farmers oceans and its expectations of simple metric, so many We made a ‘no deforestation’ and our funding has enabled companies in managing the projects do not take outcomes commitment in 2010 stating that 150 acres of floodplain to be oceans sustainably. Nestlé firmly on biodiversity into account. none of our products or packaging restored, as well as a super gauge subscribes to the expectations Nestlé has been leading a would be associated with installed in 2018 to provide water set out in this document. project with NGOs, national deforestation by 2020. To quality data. governments and accelerate this commitment in international organizations to palm oil, we have partnered with Restoring depleted soil 77% of our global address this. We’ve developed Airbus and TFT to implement Nestlé Purina is also working with supply chain is a methodology to evaluate the Starling, a satellite-based service, The Nature Conservancy to help effect of biodiversity initiatives to monitor 100% of our global palm fund the ReThink Soil initiative in the deforestation free for and provide a valuable tool for oil supply chains from 2019. The US Midwest, aimed at improving our commodities with decision makers. program will be extended to cover soil management and restoring the greatest risk Read the full story

Creating Shared Value progress report 2018 54 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Reporting and governance Our governance systems and approach to business ethics are fundamental to our business. We provide detailed information on the topics below as well as our comprehensive reporting processes online.

Our performance in leading indices Doing business right Putting our values at the Advocating for change We are not driven by awards and recognition, Ethical principles are fundamental to heart of what we do Our advocacy priorities are guided by but we’re proud to have our sustainability efforts and achievements acknowledged by world- how we operate. This means zero Building our business on clear our purpose to enhance quality of life leading ratings and rankings agencies: tolerance for fraud, bribery and principles and sound governance and contribute to a healthier future. corruption, protection of personal data maintains trust in the Nestlé brand and and open disclosure of tax payments. reduces risk in the value chain. Nestlé has been consistently listed in the FTSE4Good responsible Ethical business Governance and policies Public policy and advocacy investment index since 2011.

Ranked first out of 22 global food and beverage manufacturers in the 2018 Prioritizing key issues Talking to the right people Collaborating for major Access to Nutrition Index™ (ATNI). To ensure our sustainability efforts We always seek the advice of the best change keep up with a changing world, we Ranked second in the Food Products experts and advocates to make Collaboration is an essential element industry of the 2018 Dow Jones conduct a materiality analysis every Creating Shared Value as robust as it in our bid to tackle global issues Sustainability Index (DJSI), scored 100 two years. can be. like rising obesity, child labor and for Health and Nutrition performance, climate change. and hold the leadership scores in the Environmental and Social Dimensions.

Materiality Stakeholder engagement Partnerships and collective action Retained our place in CDP’s Climate A list.

Awarding good work Bringing new ideas to life Working toward the The Nestlé CSV Prize is awarded every Through the CSV Prize and our open UN SDGs two years to help expand initiatives that platform HENRi@Nestlé, we aim to Creating Shared Value is closely address nutrition, water and rural nurture the ideas that will determine aligned with the UN’s 17 Sustainable development. the future. Development Goals.

Creating Shared Value forum Supporting innovation Contributing to the Global Goals

Creating Shared Value progress report 2018 55 Creating Shared Value Individuals and families Communities Planet Reporting and governance

About this report Our 2018 Creating Shared Value progress report provides our shareholders and stakeholders with a summary of our 2018 performance against our commitments. We provide further detailed information online.

Reporting period, scope We use boundaries based on Reporting frameworks Our human rights reporting has been Where to find more information and boundaries operational control as this better Global Reporting Initiative evaluated as per Tier 1 assurance reflects the reality of our operations. indicators of the UN Guiding This document forms an integral This report covers our global This report has been prepared in Principles Assurance Framework. part of Nestlé’s UN Global Compact operations for the calendar year accordance with the GRI Standards: (UNGC) Communication on Progress, Data scope and methodologies We address our responses to the ending December 31, 2018. It Comprehensive option of the 2016 together with: framework in our Creating Shared contains data for wholly owned Unless otherwise noted, the Global Reporting Initiative’s (GRI) Our reports are available online Value progress report. companies and subsidiaries, but performance data included in this 2018 Review – Annual Nestlé Standards, and the Food Our purpose Good Food, Good Life Nestlé. Enhancing quality of life and contributing to a healthier future.

Annual Review 2018 We are dedicated to report corresponds to companies advancing nutrition, health, excludes joint ventures and and wellness in a way that is sustainable and responsible. Processing Sector Supplement, Through our portfolio of products and services, we offer people and their pets, tastier, healthier and convenient choices for all life stages and all times Audience of the day. suppliers, unless specifically that are fully consolidated in our and externally assured by Bureau stated. ‘Markets’ refers to our financial statements. Veritas. See the full GRI Content We maintain ongoing dialogue with

Front cover Contents Accompanying reports

Milo: Energy with purpose 2 Letter to our shareholders Corporate Governance Report 2018 Milo is an integral part of Nestlé’s Compensation Report 2018 efforts to promote healthier lifestyles 6 Pursuing our value-creating Financial Statements 2018 by encouraging sports and healthy strategy eating habits amongst kids. 10 Innovating for a changing world Each year the brand supports grassroots programs, working with 14 Connecting through our brands different partners to make a positive Online a wide range of stakeholders difference in the lives of more than 30 Creating Shared Value 22 million children. business and/or activities at a Nestlé. 42 Financial review You can find more information about the Nestlé Group at Enhancing quality of life 57 Corporate Governance and www.nestle.com Index. The GRI index is a nonprofit Compliance Find out more about Creating Shared and contributing 65 Shareholder information Value at www.nestle.com/csv to a healthier future. national level, while ‘Zone’ refers to Our safety and health data covers organization that promotes interested in this report. They _AR_2018_cover_EN.indd 1-4 19.02.19 13:47 geographic groups of markets. 308 000 employees, while economic sustainability and leads include investors, nongovernmental 2018 Annual 2018 Creating Shared Review Value report our environmental data refers in the field of nonfinancial reporting. organizations, think tanks, This report is focused on progress to factories and warehouses, foundations, organizations, ESG to date against our commitments with the exception of some UN Global Compact services, consumers and suppliers. Go to www.nestle.com/CSV, where you and objectives, which are based on recent acquisitions. ‘Communication on Progress’ can also find more detailed governance the most material issues. These Currency conversion information, performance data, case Every year, Nestlé submits its CoP studies, and additional audio and were updated during our most Our climate change disclosures to demonstrate its commitment to All amounts cited in this report video content. recent materiality assessment in conform with the Climate the Global Compact and the Ten have been converted to Swiss Our Human Rights Index and 2018. The process reviewed Disclosure Standards Board Principles on human rights, labor, francs (CHF) using the exchange GRI Content Index are available as financial, operational and framework requirements. We also separate PDFs. environment and anti-corruption. rates reported in the consolidated follow the standards of the reputational impacts throughout financial statements of the Nestlé Our Corporate Business Principles are the Greenhouse Gas (GHG) Protocol to our value chain, as well as UN Guiding Principles Group 2018. basis of our company’s culture and are establish our GHG inventory. available as a PDF. assessing the issues that most Reporting Framework influence the decision making of Contact us our stakeholders. The results have See our response to the CDP The UNGP Reporting Framework We hope you find this report informed the contents of this Investor Information Request for offers comprehensive guidance for engaging and informative, and progress report and our CSV web comprehensive details of our companies to report on salient continue to welcome your input pages, in line with the GRI 2016 climate change disclosures and human rights issues. This is in line Explore our full GRI Content Index and views: creatingsharedvalue@ Standards materiality principle performance. with their responsibilities, as set nestle.com See the awards and recognition (see Reporting frameworks). out in the UN Guiding Principles on Business and Human Rights. we’ve received

Creating Shared Value progress report 2018 56 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Independent assurance statement We engaged a third-party organization, Bureau Veritas, to provide independent assurance for this 2018 progress report. This process aims to provide assurance to Nestlé’s stakeholders over the accuracy, reliability and objectivity of the reported information, and to confirm that it covers our most material issues.

Summary Assurance Statement from Bureau Veritas UK Ltd Bureau Veritas UK Ltd. (Bureau Veritas) has provided independent assurance to Nestlé SA (Nestlé) over the 2018 Nestlé in society: Creating Shared Value progress report (‘the CSV Report’) published on the Nestlé website (https://www. nestle.com/csv). The assurance process was conducted in line with the requirements of the AA1000 Assurance Standard (2008) Type 2 at moderate level of assurance. The scope of Bureau Veritas’ work was limited to Nestlé’s head office based activities where Nestlé consolidates and reconciles data provided by its markets/countries of operation. The assurance was provided over all data and text included in the CSV Report and included an evaluation of the CSV Report’s alignment to GRI Standards and the RE100 criteria. It also included a review of Nestlé’s human rights reporting against the ‘Tier 1’ Assurance Indicators of the UN Guiding Principles Reporting Framework. Bureau Veritas’ full assurance statement includes certain exclusions, observations of good practices, recommendations for improvement, and a detailed assurance methodology and scope of work.

The full assurance statement with Bureau Veritas’ independent opinion can be found at : https://www.nestle.com/csv/performance/ downloads.

London, March 2019

Creating Shared Value progress report 2018 57 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Our key performance indicators Nestlé’s key performance indicators (KPIs) provide a focus for measuring and reporting Creating Shared Value, sustainability and compliance. The performance summary below forms part of our Communication on Progress for the United Nations Global Compact Principles. Unless otherwise stated, performance indicators are for the calendar year ending December 31, 2018.

To provide transparency for our stakeholders, we have indicated the The references in the GRI column relate to the applicable indicator from the 2016 GRI correlation between our KPIs, our commitments and Global Reporting Standards. We report against these standards in line with our material issues, which are Initiative (GRI) indicators in the table below. identified through our stakeholder engagement process and shape our public commitments.

Nestlé in society and Creating Shared Value key performance indicators GRI Standards 2018 2017 Page

Economic Total Group sales (CHF million) (a) 91 439 89 791 AR p1 Net profit (CHF million) (b) 201-1, FP4 10 135 7183 AR p43 Nutrition Products meeting or exceeding Nestlé Nutritional Foundation profiling criteria (as % of total sales) (c) 201-1 82.5 82.1 8 Percentage of total sales volume of consumer products which have been changed for nutrition and health FP7 9.1 8 considerations Products analyzed and improved or confirmed via 60/40+ program (sales, CHF million) (d) 416-1 32 823 35 086 Products containing Branded Active Benefits (sales, CHF million) (e) Discontinued 6110 Products featuring Nestlé Nutritional Compass® labeling (% of sales worldwide) (f) 417-1 95.6 97.3 14 Products with guideline daily amounts (GDA) labeling on front of pack (% of sales) (g) 417-1 87.3 89.4 14 Products with specific Portion Guidance (sales, CHF million) (h) 417-1 Discontinued 40 100 Popularly Positioned Product SKUs (h) Discontinued 4746 Popularly Positioned Products (sales, CHF million) (h) Discontinued 12 200 Nestlé television advertising to children under 12 in compliance with policies on responsible marketing (%) 417-3 Discontinued 97.4 Total number of countries where the Nestlé Policy and Instructions for Implementation of the WHO International 417-3 28 26 18 Code of Marketing of Breast-milk Substitutes practices were audited Infant formula marketing staff in higher-risk countries trained on the WHO Code (% of staff) (i) 103-2 98.5 100 Rural development Farmers trained through capacity-building programs 203-1 440 000 431 000 Direct procurement markets covered by SAIN programs (%) (j) Discontinued 95 Percentage of purchased volume fully compliant with the Nestlé Supplier Code (k) FP1 61 57 28

Creating Shared Value progress report 2018 58 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Nestlé in society and Creating Shared Value key performance indicators GRI Standards 2018 2017 Page

Water (l) Total water withdrawal (million m3) 303-1 127 132 Total water withdrawal (m3 per tonne of product) 303-1 2.33 2.36 Environmental sustainability Production volume Total production volume (million tonnes) 102-7 54.3 55.6 Materials Raw materials used (million tonnes) 301-1 24 24.4 Materials for packaging purposes (million tonnes) 301-1 4.7 4.9 51 Packaging source optimization (kilotonnes saved) 301-1 15] 22.56 Energy Total on-site energy consumption (petajoules) 302-1 88.3 92.9 Total on-site energy consumption (gigajoules per tonne of product) 302-1 1.63 1.63 Total on-site energy consumption from renewable sources (% total) 302-1 21.9 19.2 Total direct energy consumption (petajoules) 302-1 60.2 62.0 Total direct energy consumption from renewable sources (% total direct) 302-1 12.4 11.9 Total indirect energy consumption (petajoules) 302-1 67.8 73.3 Biodiversity Total size of manufacturing sites located in protected areas (hectares) 304-1 18.8 18.8 Emissions, effluents and waste

Direct GHG emissions (million tonnes CO2eq) 305-1, 305-2 3.3 3.5

Direct GHG emissions (kg CO2eq per tonne of product) 305-1, 305-2 62 64

Indirect GHG emissions (million tonnes CO2eq) 305-1, 305-2 2.5 2.7

Indirect GHG emissions (kg CO2eq per tonne of product) 305-1, 305-2 47 48 Total water discharge (million m3) 306-1 75 74.2 Total water discharge (m3 per tonne of product) 306-1 1.39 1.34 Average quality of water discharged (mg COD/l) 306-1 41 83.8 By-products (kg per tonne of product) 306-2 30.5 29.9 Waste for disposal (kg per tonne of product) 306-2 0.6 1.1 Environmental sustainability governance Manufacturing sites certified against ISO 14001 (% of total manufacturing sites) 103-2 96 97

Creating Shared Value progress report 2018 59 Creating Shared Value Individuals and families Communities Planet Reporting and governance

Nestlé in society and Creating Shared Value key performance indicators GRI Standards 2018 2017 Page

Human rights and compliance Total number of significant product recalls or incidents of noncompliance 416-2 6 12 Total number of FTSE4Good countries of concern, and number in which human rights impact assessments 103-2 12 12 have been carried out on Nestlé operations Number of employees trained on human rights 412-1 101 613 96 599 32 Our people Total workforce (number of employees) (m) 102-8 308 000 322 887 56 Total rate of new employee hires (%) (m) 401-1 11.1 10.7 Total rate of employee turnover (%) (m) 401-1 15.7 13 CARE gaps identified related to Business Integrity (n) 102-17 67 10 Of which: Minor 102-17 32 10 Major 102-17 0 0 Critical 102-17 0 0 Observation 102-17 35 Lost-time injuries and illnesses rate (per million hours worked) (employees, on-site contractors and on-site 403-2 Discontinued 1.66 members of public) (o) Total recordable injuries and illnesses rate (per million hours worked) (employees, on-site contractors and 403-2 Discontinued 2.87 on-site members of public) (p) Total number of fatalities (employees, on-site contractors and on-site members of public) (m) 403-2 3 2 Average hours of training per year per employee (q) 404-1 4.49 31.93 Leadership positions held by women (%) (r) 405-1 43.2 37.5 38 Local Management Committee members native to country in developing countries (%) (m) 202-2 83.01 78.0 a) Does not include joint ventures. g) Includes all F&B and Nestlé Waters except plain water. It excludes joint n) CARE, our global external audit program, is conducted by three audit b) Includes Nestlé’s share in net result of joint ventures. ventures, Nestlé Nutrition, Wyeth Nutrition, Nestlé Health Science and companies and verifies that all employees and sites we own or operate specific category/country exemptions. comply with local legislation, our Corporate Business Principles and c) Total Nestlé (F&B except CPW, NHSc, Pharma, Nespresso, CPW and Code of Business Conduct. The audits take place every three years. businesses not in GLOBE reporting) excluding non-edible products h) Tracking discontinued in 2018. New metrics to be defined in 2019. (78.4% in 2016 with comparable baseline). i) We follow the FTSE4Good breast-milk substitute marketing criteria, o) Nestlé is not monitoring lost time anymore as we are more proactive to look at recordables. d) In the 60/40+ program, Nestlé products tested with consumers must be which classify countries as ‘higher-risk’ if they have mortality rates for preferred over the competitor’s. Assessment results are valid for a under-fives of more than 10 per 1000, or more than 2% acute p) Nestlé is separating injuries from illnesses as we see mixing them is maximum of three years if all parameters remain equal. malnutrition among under-fives. All other countries are ‘lower-risk.’ misleading information, since the maturity in reporting illnesses is still under development. e) As of 2018, the KPI on sales of Products containing Branded Active j) Program discontinued. Benefits (BABs) is no longer reported. While we continue to implement k) In 2016, scope extended to include service and indirect materials with q) Training hours are based only on information recorded in the Learning BABs where relevant, moving forward they will be included under total target of 50%. Management System (LMS). The numbers will be higher if manually recorded training hours were considered. Training hours per employee health claims made and will no longer be tracked as a separate l) Includes joint ventures. external measure. covers 100% employees in the system. m) Covers Nestlé employees registered in HR system (approximately 84% r) Nestlé has changed the definition of this KPI and moved from a f) PetCare, Gerber Life, Nestlé Health Care Nutrition, Wyeth Nutrition, of all employees). other Nestlé Health Science businesses and non-Nestlé-branded definition driven of the job catalogue to a definition based on grades. products in Nestlé Waters are out of scope. Unfortunately, we are not able to calculate backwards and hence not able to provide adjusted figures for 2017.

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