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Nestlé in society Creating Shared Value and meeting our commitments 2015

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<strong>Nestlé</strong> <strong>in</strong> <strong>society</strong>:<br />

Creat<strong>in</strong>g <strong>Shared</strong> <strong>Value</strong><br />

Nutrition, health<br />

<strong>and</strong> wellness<br />

Rural development<br />

Water<br />

Environmental<br />

susta<strong>in</strong>ability<br />

Human rights<br />

<strong>and</strong> compliance<br />

Our<br />

people<br />

G4-EC7, Procurement practices G4-DMA, Supplier environmental assessment G4-DMA, G4-EN33, Supplier assessment for labor practices G4-DMA, G4-LA15, Child labor G4-DMA,<br />

Indigenous rights G4-DMA, G4-HR8, G4-HR9, Supplier human rights assessment G4-DMA, G4-HR10, G4-HR11, G4-SO2, Supplier assessment for impacts on <strong>society</strong> G4-DMA, G4-SO9, G4-SO10<br />

Our partner Proforest has carried out a number of<br />

assessments for sugar <strong>and</strong> soya that have identified ways of<br />

help<strong>in</strong>g farmers implement best practices <strong>and</strong> take remedial<br />

actions to correct issues.<br />

Forced lab<strong>our</strong>, safety <strong>and</strong> other social issues also occur <strong>in</strong><br />

palm oil production, <strong>and</strong> there are further lab<strong>our</strong> concerns <strong>in</strong><br />

the fish <strong>and</strong> seafood supply cha<strong>in</strong>. We are fully committed to<br />

ensur<strong>in</strong>g that <strong>our</strong> products are not associated with forced<br />

lab<strong>our</strong> through <strong>our</strong> m<strong>and</strong>atory <strong>Nestlé</strong> Supplier Code <strong>and</strong> RSG,<br />

which requires all of <strong>our</strong> suppliers to respect human rights <strong>and</strong><br />

to comply with all applicable lab<strong>our</strong> laws. In the case of fish<br />

<strong>and</strong> seafood, we are, for example, engag<strong>in</strong>g with <strong>our</strong> suppliers<br />

<strong>in</strong> Thail<strong>and</strong> to identify any potential unlawful lab<strong>our</strong> practices<br />

<strong>and</strong> pursue appropriate actions to elim<strong>in</strong>ate such practices<br />

from <strong>our</strong> supply cha<strong>in</strong>, as well as work<strong>in</strong>g alongside the Thai<br />

Government <strong>and</strong> the ILO.<br />

Read more about <strong>Nestlé</strong>’s position on this issue <strong>in</strong> the<br />

<strong>Nestlé</strong> Commitment on Lab<strong>our</strong> Rights <strong>in</strong> Agricultural<br />

Supply Cha<strong>in</strong>s.<br />

Child lab<strong>our</strong><br />

Child lab<strong>our</strong> has been identified as an issue <strong>in</strong> <strong>our</strong> hazelnut,<br />

vanilla <strong>and</strong> cocoa supply cha<strong>in</strong>s. We are committed to<br />

elim<strong>in</strong>at<strong>in</strong>g child lab<strong>our</strong> from all <strong>our</strong> supply cha<strong>in</strong>s. Read more<br />

about how <strong>Nestlé</strong> is tackl<strong>in</strong>g this issue <strong>in</strong> Human rights <strong>and</strong><br />

compliance.<br />

Gender <strong>in</strong>equality<br />

Gender <strong>in</strong>equality <strong>and</strong> discrim<strong>in</strong>ation rema<strong>in</strong> widespread, <strong>and</strong><br />

the contribution – both direct <strong>and</strong> <strong>in</strong>direct – of women <strong>in</strong> the<br />

supply cha<strong>in</strong> often goes unrecognised, unrewarded <strong>and</strong><br />

unrecorded. In <strong>our</strong> cocoa supply cha<strong>in</strong>, for example, they<br />

perform many tasks, from plant<strong>in</strong>g seedl<strong>in</strong>gs <strong>and</strong> collect<strong>in</strong>g<br />

cocoa pods to transport<strong>in</strong>g, ferment<strong>in</strong>g <strong>and</strong> dry<strong>in</strong>g the cocoa,<br />

but men often take responsibility for sell<strong>in</strong>g the cocoa, <strong>and</strong> the<br />

distribution of any f<strong>in</strong>ancial compensation. And even when<br />

they comb<strong>in</strong>e this <strong>in</strong>come with additional activities, such as<br />

grow<strong>in</strong>g other food crops, most women struggle to earn<br />

enough to ma<strong>in</strong>ta<strong>in</strong> an acceptable st<strong>and</strong>ard of liv<strong>in</strong>g.<br />

Other barriers fac<strong>in</strong>g women <strong>in</strong>clude communities<br />

recognis<strong>in</strong>g male-only l<strong>and</strong> ownership, the near-absence of<br />

women <strong>in</strong> leadership or managerial roles <strong>in</strong> cocoa cooperatives,<br />

<strong>and</strong> a lack of health <strong>and</strong> safety awareness <strong>and</strong><br />

access to tra<strong>in</strong><strong>in</strong>g <strong>and</strong> protective equipment. Our Action Plan<br />

on Women <strong>in</strong> the Cocoa Supply Cha<strong>in</strong> sets out to address<br />

these issues.<br />

Deforestation<br />

Deforestation is a major environmental issue that has long<br />

been associated with the palm oil, pulp <strong>and</strong> paper, <strong>and</strong> soya<br />

supply cha<strong>in</strong>s <strong>in</strong> particular, <strong>and</strong> also affects sugar production.<br />

Poor forest management <strong>and</strong> the loss of High Conservation<br />

<strong>Value</strong> (HCV) areas still rema<strong>in</strong> a challenge. Ris<strong>in</strong>g consumer<br />

dem<strong>and</strong> means tropical ra<strong>in</strong>forests <strong>and</strong> associated peatl<strong>and</strong>s<br />

have been cleared to make way for plantations, which<br />

contribute to greenhouse gas emissions, soil erosion, water<br />

pollution <strong>and</strong> a loss of biodiversity; work<strong>in</strong>g conditions <strong>and</strong><br />

l<strong>and</strong> conflicts over tenure rights are also an issue. Many NGOs<br />

actively campaign aga<strong>in</strong>st unsusta<strong>in</strong>able practices.<br />

In 2010, <strong>Nestlé</strong> made a ‘no deforestation’ commitment,<br />

stat<strong>in</strong>g that all of its products, globally, will not be associated<br />

with deforestation by 2020 (<strong>Nestlé</strong> also supports the<br />

Consumer Goods Forum’s ambition for zero net deforestation<br />

by 2020). This commitment was the first of its k<strong>in</strong>d by a food<br />

company, <strong>and</strong> covers all the raw materials we use to make <strong>our</strong><br />

foods <strong>and</strong> beverages, as well as <strong>our</strong> packag<strong>in</strong>g, mak<strong>in</strong>g<br />

traceability <strong>and</strong> transparency crucial. A significant number of<br />

traders <strong>and</strong> manufacturers have s<strong>in</strong>ce followed <strong>our</strong> lead <strong>and</strong><br />

developed susta<strong>in</strong>able palm oil policies <strong>and</strong> ‘no deforestation’<br />

<strong>commitments</strong> of their own. With<strong>in</strong> the soya supply cha<strong>in</strong>, we<br />

work with Proforest to identify, categorise <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong> highrisk<br />

zones. In the Cerrado area of Brazil, for example, we only<br />

s<strong>our</strong>ce products from l<strong>and</strong> that has not been converted from<br />

HCV areas to other l<strong>and</strong> use.<br />

We are also develop<strong>in</strong>g <strong>and</strong> shar<strong>in</strong>g tools to enable<br />

smallholder farmers to avoid deforestation <strong>and</strong> the loss of<br />

natural vegetation, <strong>and</strong> f<strong>in</strong>d<strong>in</strong>g ways to help them m<strong>in</strong>imise<br />

water consumption. In the sugar supply cha<strong>in</strong>, for <strong>in</strong>stance,<br />

remediation activities are implemented <strong>in</strong> conjunction with a<br />

network of local delivery partners <strong>in</strong> specific countries, who<br />

can br<strong>in</strong>g additional local knowledge to the process.<br />

L<strong>and</strong> acquisition: respect<strong>in</strong>g the rights of local <strong>and</strong><br />

<strong>in</strong>digenous peoples<br />

L<strong>and</strong> tenure is one of the eight key areas that are <strong>in</strong>cluded <strong>in</strong><br />

<strong>our</strong> Rural Development Framework <strong>and</strong> we are gather<strong>in</strong>g data<br />

<strong>and</strong> <strong>in</strong>sights on the status of farmers’ property rights.<br />

Secure rights to l<strong>and</strong> <strong>and</strong> natural res<strong>our</strong>ces are essential to<br />

rural development. They help to reduce uncerta<strong>in</strong>ties <strong>and</strong><br />

facilitate long-term <strong>in</strong>vestment; <strong>in</strong> contrast, <strong>in</strong>secure l<strong>and</strong><br />

rights lead to poverty, l<strong>and</strong> degradation <strong>and</strong> forest conversion.<br />

Our efforts to improve l<strong>and</strong> rights were recognised when we<br />

were awarded the <strong>in</strong>dustry-lead<strong>in</strong>g score for this category <strong>in</strong><br />

Oxfam’s <strong>2015</strong> Beh<strong>in</strong>d the Br<strong>and</strong> rank<strong>in</strong>gs.<br />

<strong>Nestlé</strong> does not directly acquire or lease agricultural l<strong>and</strong>,<br />

though we do acquire l<strong>and</strong> for factory sites <strong>and</strong> a small number<br />

of demonstration farms. However, we do buy <strong>in</strong>gredients such<br />

as palm oil, soya <strong>and</strong> sugar, which are some of the common<br />

raw materials driv<strong>in</strong>g l<strong>and</strong> acquisition <strong>and</strong> ‘l<strong>and</strong> grabb<strong>in</strong>g’.<br />

<strong>Nestlé</strong> <strong>in</strong> <strong>society</strong> – Creat<strong>in</strong>g <strong>Shared</strong> <strong>Value</strong> <strong>and</strong> meet<strong>in</strong>g <strong>our</strong> <strong>commitments</strong> <strong>2015</strong> 113

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