Creating Shared Value and Sustainability Report 2020 Nestlé. Unlocking the power of food to enhance quality of life for everyone, today and for generations to come. Creating Shared Value Individuals and families Communities Planet Creating Shared Value and Sustainability Report 2020 2 A message from our Chairman and CEO Despite the clear challenges of the past year, we Contents Nestlé. Unlocking the power have continued to respond to consumer demands and do our part for the planet by developing 2 Creating Shared Value of food to enhance quality of products that deliver great taste and nutritional value while minimizing their environmental impact. 3 Our journey life for everyone, today and For example, we have significantly invested in plant- 4 Individuals and families based products, launching Garden Gourmet brand’s 5 Communities for generations to come Sensational Burger and Sensational Vuna, our vegan tuna alternative, in Europe. 6 Planet 7 What’s next? 2020 was an extraordinary and challenging Our commitment to supporting youth opportunities 8 Our 2020 commitments year. The COVID-19 pandemic severely has also not wavered. Amid the pandemic, we have scaled up online training to ensure continuity and progress impacted everyone’s lives and created of our internship and apprenticeship programs. 9 For individuals and families We have made significant progress on our journey much instability and uncertainty. 10 Offering tastier and to sustainable packaging too. This included the healthier choices investment of USD 30 million (CHF 26.4 million) in Nestlé responded immediately and with clear the Closed Loop Leadership Fund to lead the shift 16 Inspiring people to priorities, activating and implementing measures from virgin plastics to food-grade recycled plastics lead healthier lives to keep our people safe, and ensuring the supply of in the US. 24 Building, applying and essential foods and beverages to consumers. sharing nutrition knowledge In 2020, we reaffirmed our support for the UN Global We also provided care for our communities, as Compact and were again named a LEAD company 27 For our communities well as financial and in-kind support to business in recognition of our ongoing determination to help partners. For example, we joined forces with the 28 Enhancing rural development achieve the UN Sustainable Development Goals International Federation of the Red Cross and Red and livelihoods (SDGs). We are defining new ambitions that will Crescent Societies to provide urgently needed push us to go further and faster, drive progress on 34 Respecting and help for emergency services and caregivers and to social issues and support a healthy food system. promoting human rights strengthen healthcare systems. Our Always Open 39 Promoting decent for You platform supported the food service industry We have set new commitments to achieve 100% employment and diversity by extending credit terms, suspending rental fees reusable or recyclable packaging by 2025 and to on coffee machines and offering free products when achieve net zero greenhouse gas emissions by 43 For the planet those businesses are able to reopen. 2050, supported by our Net Zero Roadmap with 44 Caring for water tangible, time-bound targets to reduce emissions, It is in times as challenging as these that we can 49 Acting on climate change within and beyond our operations. Our actions truly demonstrate how business can be a force for include working with 500 000 farmers and 150 52 Safeguarding the environment good. This is what Creating Shared Value (CSV) has 000 suppliers to support them in implementing always been about, focusing energy and resources regenerative agricultural practices, planting where we can make the greatest positive impact on 57 Independent assurance hundreds of millions of trees within the next 10 years people and the planet. statement and completing the company’s transition to 100% Last year, the time frame for many of our public renewable electricity by 2025. U. Mark Schneider Paul Bulcke commitments came to an end. We have made Further detail about our report Chief Executive Officer Chairman This report provides a detailed overview of progress that everyone at Nestlé can be proud of, scope, strategy and governance, how Nestlé is making a difference across our having fulfilled the majority of our commitments. KPIs and materiality, as well as three impact areas – individuals and families, We are intensifying our efforts to close the small our GRI and UNGPRF indices can communities and the planet. We know that amazing gaps on the few that remain. be found in the Creating Shared things should and can happen when we Value and Sustainability Report all work together. This belief is at the heart of CSV 2020 Appendix and will drive our business in 2021 and beyond. Creating Shared Value Individuals and families Communities Planet Creating Shared Value and Sustainability Report 2020 3 Our journey A timeline of our achievements over the years: from the birth of Nestlé to the evolution of Creating Shared Value (CSV), and beyond. 2010 2016 2020 The Nestlé Cocoa Plan and Nescafé Plan The 2030 CSV ambitions The ambitious Nestlé 1867 2002 are both launched. They are designed are refined and targets set Net Zero Roadmap is Nestlé is founded by Partnership with the to develop sustainable cocoa and for the next five years launched, following Henri Nestlé, who International Federation coffee supply chains, improve social the announcement of develops farine lactée to of Red Cross and Red conditions in farming communities Nestlé’s 2050 climate tackle high infant mortality Crescent Societies signed and ensure profitability commitment in 2019 to collaborate on HIV prevention, WASH in cocoa supply chains, and 2018 disaster relief, including joint Nestlé for Healthier COVID-19 relief in 2020 Kids is launched globally, reaching 1997 29 million children Nestlé sets in the first year of its Nutrition, launch to improve Health and how they eat, drink Wellness and live vision 2011 2019 Nestlé is the first Nestlé inaugurates the food company to Institute of Packaging work with the Fair Sciences to advance 1982 2006 Labor Association the development of Nestlé is one of the first companies The CSV approach is formally to tackle child labor safe, functional and to develop policies based on the adopted, followed by the first risk in the cocoa sustainable packaging WHO International Code of Marketing CSV Forum in 2009, beginning supply chain of Breast-milk Substitutes. In 2011, regular engagement between 2017 Nestlé becomes the first breast-milk stakeholders and our leadership Nestlé needs YOUth, which substitute company to be included in aimed to support 10 million the FTSE4Good Index young people in their search for All pictures taken before the COVID-19 pandemic employment, is launched globally Creating Shared Value Individuals and families Communities Planet Creating Shared Value and Sustainability Report 2020 4 Individuals and families Nestlé for Fighting Healthier micronutrient Kids deficiencies 80 million children 196 billion+ have received nutrition education and over 4000 nutritious foods servings and beverages have been of micronutrient fortified foods launched since 2016 with and beverages provided in emerging support from our flagshipNestlé countries with high vulnerability of for Healthier Kids initiative. deficiencies during 2020. i Read more on page 20 i Read more on page 15 Supporting Engaging informed children choices in cooking 98.3% of product 350 million packaging based on net sales parents in over 35 markets now displays the Nestlé Nutritional reached through the 2020 Compass, providing at-a-glance #cooktogether campaign. information to help consumers Read more on page 20 make informed choices for a i healthy, balanced diet. i Read more on page 17 All pictures taken before the COVID-19 pandemic Creating Shared Value Individuals and families Communities Planet Creating Shared Value and Sustainability Report 2020 5 Communities Cutting Growing deforestation livelihoods 90% of our main forest-risk commodities 235 million that we buy (palm oil, pulp and paper, soya, quality plantlets distributed to meat and sugar) have been assessed as coffee growers to support higher deforestation-free, as of December 2020. yields and incomes, exceeding Over the past ten years, we have been using our original target by 15 million a combination of tools, including supply chain by 2020. mapping, risk assessments, certification, i Read more on page 32 satellite monitoring and on-the-ground verification, to ensure they are not linked to deforestation. i Read more on page 31 Tackling Nestlé child labor needs 127 550 children protected against the risk of YOUth child labor since 2012 through support such as income- generating activities, bridging 10 million young classes, school kits, school people have been supported renovation and building. by the Global Alliance for YOUth that Nestlé founded in 2014. i Read more on page 33 We also expanded Nestlé needs YOUth initiative across our operations to help empower millions more young people to begin careers or access training. i Read more on page 40 All pictures taken before the COVID-19 pandemic Creating Shared Value Individuals and families Communities Planet Creating Shared Value and Sustainability Report 2020 6 Planet Caring for water 1.4 million beneficiaries in the areas surrounding our facilities have increased access to WASH projects. We have worked with local stakeholders and organizations to achieve of our packaging by weight is this over the course of 88% reusable or recyclable. 15 markets now have our commitment. Closing stakeholder alliances dedicated to addressing i Read more on page 48 waste management and marine littering. the loop i Read more on page 53 Providing Achieving climate zero waste 95% of our factories have now leadership reached zero waste for disposal status. All our factories have waste 37% reduction in greenhouse gas diversion processes in place and we emissions per tonne of product since will continue to work toward achieving 2010.