Nestle In Society Summary Report 2017 - Nestlé Global

Enabling healthierand happier livesInspired by our founder, HenriNestlé, and with nutrition at ourcore, we work closely with partnersto offer foods and beverages thatenable healthier and happier lives.We have set commitments andobjectives to make our portfolioeven healthier and tastier, inspireconsumers to lead healthierlives, and develop and share ourunderstanding of the connectionbetween nutrition and health.Added value for investorsThe market for healthier foods andbeverages is growing. Products with anutrition, health and wellness dimensionperform better. Through our broadportfolio, covering needs from babiesto old age, and our constant investmentin product innovation we are well placedto seize this opportunity.Nestlé foods and beverages with anabove average NHW benefit achieve1.8x higher growth rates than otherproducts and are 1.5x more profitable.This is clearly an opportunity forincreased financial impact. Furthermore,our health and wellness work helps usstay ahead of regulations, possiblyavoiding major costs of non‑compliance.8Uncle Tobys, Australia’s leading brand of oats, haslaunched Nature’s Mix, a no‑added sugar range thatis naturally sweetened with dried fruit and nuts.Offering tastier and healthier choicesNutrition is the area of greatest intersectionbetween Nestlé’s business and society, wherewe can help tackle the global public healthissues of over‑ and undernutrition. It is importantthat consumers have tasty, convenient optionscontaining the nutrients they need, so that theycan maintain a healthy diet.We are launching more nutritious foodsand beverages, simplifying ingredient listsand removing artificial colours, while addingmicronutrients where they are deficient in thelocal population.A scientific breakthrough will allow us toreduce the total amount of sugar in confectioneryby up to 40% without compromising on taste.The first products will be launched in 2018.We have also reinforced our commitment tofurther reduce sodium by an average of 10%by the end of 2020, in support of the WHOrecommended intake levels.7%174 billionreduction in sugar contentof KitKat, which weachieved by using moremilk and cocoaservings of fortifiedfoods and beveragesin 66 countries withhigher vulnerability tomicronutrient malnutritionNestlé in society

Every year, over 22 million children benefit fromNestlé Milo’s programmes promoting physical activity.A new partnership with FC Barcelona signed in 2017will inspire millions more children to participatein sport.In 2016, we announced a new way to structure sugarparticles that allows us to reduce the sugar in someof our confectionery products. We scaled up ourtechnology in 2017 and 2018 will see our first launches.Inspiring people to lead healthier livesWe are committed to improving access tonutrition to help reduce non‑communicablediseases. We work with partners to promotebalanced diets, healthy cooking and hydration,and regular physical activity. We encouragepeople to lead healthier lives by providingnutritional information and portion guidance,and through responsible marketing.Nestlé for Healthier Kids celebratedInternational Chefs’ Day by conducting cookeryworkshops with Nestlé Professional chefs andchildren from over 50 countries. In Thailand, Milolaunched a low‑sugar ready‑to‑drink beverage,and the Milo sports programme reached over onemillion children in 1000 schools.Building, sharing and applyingnutrition knowledgeOur scientists examine the link between nutritionand health across generations. From maternaland children’s health to healthy ageing, we adopta holistic approach. It focuses on nutrition andphysical activity and their combined impact onmetabolic health. We use our findings to improveour own foods and beverages.Our Feeding Infants and Toddlers Study (FITS)and Kids Nutrition and Health Study (KNHS)continued to research the eating habits of infantsand children. FITS in the US, for example, foundthat 30% of older infants and toddlers eat veryfew or no vegetables each day. In 2017, as a resultof our research, we launched Gerber GrabbersStrong Veggies Squeezable Puree, a nutritioussnack providing one serving of vegetable (the firstingredient) and three‑quarters of a serving of fruit.89.4%81of our foods and beveragesdisplay Guideline DailyAmount labels on the frontof packcountries participating inNestlé for Healthier KidsNestlé in society1.724 billion313Swiss francs invested inresearch and developmentOur scientists sharednutrition knowledge bypublishing 313 researchpapers9

Help develop thriving,resilient communitiesIn addition to our own employees,we work with hundreds of partners,thousands of suppliers and millionsof farmers around the world. Ourcollective aim is to help developthriving and resilient communitiesas part of a secure, long‑termsupply chain. Our programmesand commitments are designed tosupport rural development, promoteand respect human rights, andensure fair employment and diversity.Added value for investorsConsumers increasingly want to knowwhere their foods and beveragescome from and that human rights arerespected during their production.Our responsible sourcing activities,such as our Nespresso AAA Program,Nescafé Plan and Nestlé Cocoa Plan,help us to ensure the resilience of oursupply chain and offer commercialdifferentiation to the consumer.10As part of Nestlé’s Cocoa Plan, we have developedthe Child Labour Monitoring and Remediation System.Detailed in our first Tackling Child Labour report,it is the most comprehensive programme yet to helpchildren working in cocoa production, accordingto the organisation STOP THE TRAFFIK.Enhancing rural development and livelihoodsWe have over four million farmers in our supplychain and we work directly with approximately700 000 of them. To help secure a long‑term supplyof high‑quality raw materials for our foods andbeverages, we need to understand where and howour ingredients are produced, support the farmerswho supply us and drive rural development. Weinclude in this process our commitment to continueto improve animal welfare and, in 2017, we set newgoals in this regard.Our agripreneurship programme supports thenext generation of farmers by providing essentialskills training. We offer training to improveagricultural practices, develop alternative incomestreams and improve dietary diversity.Through our partnership with the InternationalFederation of the Red Cross and Red CrescentSocieties (IFRC), we support access to water,sanitation and hygiene, and women’s empowermentin selected areas where we source our products.57%2025of the volume of our12 priority categories ofraw materials and paper areresponsibly sourcedOur aim is to source all oureggs from cage‑free hensfor all our food productsglobally by 2025Nestlé in society

Responsible sourcing in pet food: in partnershipwith the Thai Government and a supplier, we havedeveloped a showcase vessel. It is used in trainings toaddress labour rights abuses in the seafood industry.Nestlé with other partnering companies haveoffered young people over 95 000 jobs and trainingopportunities since 2014.Respecting and promoting human rightsin our business activitiesHuman rights abuses have no place in our supplychain, which is why we promote human rightsat global and local levels across our businessoperations and value chain. We continually strive tomeet the highest ethical standards, and insist thatour partners and suppliers uphold the same highcriteria. This requires commitment and work overtime. We will always be open and transparent aboutour efforts to address issues, from forced labour andgender inequality to corruption.Through our responsible sourcing activities,we take concrete actions, based on our 11 salienthuman rights issues identified in 2015. As part ofthis effort, in 2017 we published our Labour Rightsin Agricultural Supply Chains: A Roadmap. It hasenabled us to identify and prioritise 11 countriesthat present known higher levels of labour risks andfrom which we source our 12 priority commodities.Through this process, we can better target ourremediation efforts on labour rights.Promoting fair employment and diversityFair employment, diversity and inclusion areintegral to Nestlé’s culture. We aim to providea safe, rewarding workplace that inspiresemployees to fulfil their potential. We providepeople with equal development opportunities andtreat each other with dignity and respect.We place a particular focus on the challenge ofyouth unemployment. In 2017, we announced theextension of our Nestlé needs YOUth initiative toour entire value chain. Its aim is to help 10 millionyoung people around the world have access toeconomic opportunities by 2030. By doing so,we support the development of the communitieswhere we live and work, while ensuring ourtalent pipeline. This brings diversity and new skillsto the organisation and supports local innovationand entrepreneurship.1396 599human rights impactassessments completedin countries where wehave significant businessoperationsemployees trained inhuman rights since 2011Nestlé in society30 15797%jobs and 11 710 traineeshipsor apprenticeships providedto young peopleunder 30 in 2017of our markets havea health and wellnessprogramme in place11

Steward resourcesfor future generationsWe are working, with partners andstakeholders, towards our ambition tostrive for zero environmental impactin our operations. We have set clearcommitments and objectives to usesustainably-managed and renewableresources, operate more efficiently,aim for zero waste for disposal andimprove water management. We alsocontinue to participate actively ininitiatives that reduce food loss andwaste, and that preserve our forests,oceans and biodiversity.Added value for investorsBy offering consumers more sustainablefoods and beverages, we provide themwith more reasons to choose ourbrands, generating additional revenue.We bring savings through improvedoperational efficiency, better resourcemanagement and less waste. Investingin climate change adaptation andmitigation, as well as responsible waterstewardship, helps secure a moresustainable supply of resources forour business.12The Nestlé Pakistan water plan was unveiled inOctober 2017, in collaboration with Lahore Universityof Management Sciences and WWF. It promoteswater resources conservation, introduces sustainableagricultural techniques, and provides access to cleanand safe water.Caring for waterWater is a shared and precious resource that weneed to manage sustainably. We unequivocallybelieve access to water is a basic human right.Everyone, everywhere in the world, has the rightto clean, safe water for drinking and sanitation.Caring for water is a key part of achieving ourambition to strive for zero environmental impactin our operations. Water is essential for ourbusiness. The ingredients we source need waterto grow. We need water to run our factories andconsumers use water to enjoy many of our foodsand beverages.Our initiatives continue to look for ways tofurther reduce withdrawals per tonne and reusewater in our operations. We also work with otherson water stewardship initiatives, and increaseaccess to safe water, sanitation and hygiene.38.1%20reduction in our waterwithdrawals per tonne ofproduct since 2007Nestlé Waters announcedthat it will strengthenits collaboration withthe Alliance for WaterStewardship (AWS) tocertify 20 factories by 2020Nestlé in society

Our Nescafé Dolce Gusto factory in Montes Claros,Brazil, achieved a triple‑zero milestone: zero waterwithdrawal, zero waste for disposal and zero netGHG emissions.Nespresso continues to extend its global recyclingscheme and invested CHF 25 million in 2017.Acting on climate changeClimate change is a major global challenge,with shifting weather patterns threatening foodsecurity and changes in consumption puttingpressure on natural resources. Our size and scalemeans we can show real leadership on climatechange, and find ways to further reduce theemissions of greenhouse gases (GHGs) and usemore renewable energy. We have set ambitioustargets to reduce GHGs, in line with the ParisAgreement on climate change.We have doubled the amount of renewableenergy we procure compared to 2016. Morethan 100 sites are now powered with renewableelectricity, including from spent coffee groundsor wood chips. These are just some of the manyinitiatives that have helped us earn a place in theannual CDP Climate A List and become No.1 inthe food products industry in the 2017 Dow JonesSustainability Index.Safeguarding the environmentThe basic ingredients of all of our food productscome from plants and animals, forests, farms, andoceans. Protecting the natural environment wherethose ingredients grow and live is essential.We aim to develop our business while improvingour environmental performance, to ensure that amore sustainable supply of natural resources andraw ingredients goes into making our products.We continue to play our part in helping to reducefood loss and waste. In our sites, we reduce, reuseand recycle with the ultimate goal of achieving zerowaste for disposal. On an agricultural level, our teamof over 1000 agronomists and other support staffprovides training to help our farmers improve theirmethods, reduce losses and keep their land healthyand productive.25.7%33.2%of our electricity nowcomes from renewablesources. In markets suchas Germany, UK & Irelandand Brazil, we procure100% from solar, wind andhydropower sourcesreduction in our GHGemissions (scope 1 and 2)per tonne of productsince 2007Nestlé in society253100%factories achievedzero waste for disposalin 2017Nestlé Waters joined theNatur’ALL Bottle Alliancein striving to create a fullyrecyclable plastic bottlemade from 100% bio‑basedmaterial13

Our 2020 commitmentsOur impact areas – individuals and families, ourcommunities and the planet – are interconnected,and our efforts in each of these areas aresupported through our 41 public commitments.These hold us publicly accountable for ourperformance and we report our progress againstthem every year.All our public commitments are directlyaligned with our corporate purpose, our2030 ambitions and the UN SDGs. The majorityof these commitments are supported by specificobjectives for 2020.The table below shows our current progressagainst our 2020 commitments, including thoseachieved by the end of 2017, as indicated by atick. Our full online report provides more detailedinformation and updates on progess.Our performance in leading indicesAlthough we are not driven by awards andrecognition, we remain proud to have oursustainability efforts and achievementsacknowledged by world‑leading rating andranking agencies:First breast-milk substitutemanufacturer to be includedin the FTSE4Good Index,and we have retained our placefor six years.Second out of 22 global foodand beverage manufacturers inthe 2016 Access to NutritionIndex (ATNI).First in the foods productssector of the 2017 Dow JonesSustainability Index (DJSI) withan overall score of 89 out of 100.14For individualsand familiesOffering tastier and healthier choicesLaunch more nutritious foods and beverages, especiallyfor mothers‑to‑be, new mothers and childrenFurther decrease sugars, sodium and saturated fatIncrease vegetables, fibre‑rich grains, pulses,nuts and seeds in our foods and beveragesSimplify our ingredient list and remove artificial coloursAddress undernutrition through micronutrient fortificationInspiring people to lead healthier livesApply and explain nutrition information on packs,at point of sale and onlineOffer guidance on portions for our productsMarket to children only choices that help them achievea nutritious dietEmpower parents, caregivers and teachers to fosterhealthy behaviours in childrenLeverage our marketing efforts to promotehealthy cooking, eating and lifestylesSupport breastfeeding and protect it by continuingto implement an industry‑leading policy to marketbreast‑milk substitutes responsiblyInspire people to choose water to lead healthier livesPartner for promoting healthy food environmentsTopped the list of globalcompanies in 2017 CDP climatechange, earning a place in CDP’sClimate A list.Building, sharing and applying nutrition knowledgeRanked top scorer within thepackaged food industry at Ceres’Feeding Ourselves Thirsty ananalysis comparing the waterrisk management performanceof 42 global companies.Build biomedical science leading to health‑promotingproducts, personalised nutrition and digital solutionsBuild and share nutrition knowledge from the first1000 days through to healthy ageingNestlé in society

For ourcommunitiesFor the planetRural development and enhancing rural livelihoodsCaring for waterRoll‑out rural development baseline assessmentsto understand the needs of farmersWork to achieve water efficiency and sustainabilityacross our operationsImprove farm economics among the farmerswho supply usAdvocate for effective water policies and stewardshipImprove food availability and dietary diversity amongthe farmers who supply usTreat the water we discharge effectivelyImplement responsible sourcing in our supply chainand promote animal welfareEngage with suppliers, especially those in agricultureContinuously improve our green coffee supply chainRaise awareness on water conservation, and improveaccess to water and sanitation across our value chainRoll out the Nestlé Cocoa Plan with cocoa farmersActing on climate changeRespecting and promoting human rightsProvide climate change leadershipAssess and address human rights impacts acrossour business activitiesPromote transparency and proactive,long‑term engagement in climate policyImprove workers’ livelihoods and protect childrenin our agricultural supply chainSafeguarding the environmentEnhance a culture of integrity across the organisationAssess and optimise the environmental impactof our productsPromoting decent employment and diversityRoll‑out our Nestlé needs YOUth initiativeacross all our operationsProvide training on Corporate Business Principles,Nutrition and Environmental SustainabilityEnhance gender balance in our workforce and empowerwomen across the entire value chainImprove the environmental performanceof our packagingReduce food loss and wasteProvide meaningful and accurateenvironmental information and dialoguePreserve natural capital, including forestsAdvocate for healthy workplaces and healthier employeesProvide effective grievance mechanisms to employeesand stakeholdersCommitments achievedby the end of 2017Nestlé in society15

Nestlé in society 5 New York, 18 September 2017 – Nestlé Chairman, Paul Bulcke, receives the Concordia Leadershi