Nestlé in society Creating Shared Value and meeting our commitments 2015

Nestlé in society:
Creating Shared Value
Nutrition, health
and wellness
Rural development
Water
Environmental
sustainability
Human rights
and compliance
Our
people
G4-EC7, Procurement practices G4-DMA, FP2, G4-EN12, Supplier environmental assessment G4-DMA, G4-EN33, Supplier assessment for labor practices G4-DMA,
G4-LA15, G4-HR10, G4-SO9, G4-SO10
Engaging with suppliers to address deforestation
As a major buyer of a wide range of commodities, we are
rarely in a position to focus our procurement resources
on those suppliers who already meet our requirements.
Our approach, therefore, is to assist existing suppliers to
reach our standards.
We realise that, for some suppliers, this may take
several years to achieve. Moreover, in our experience,
certain suppliers are unwilling to engage with us and our
partners. If we are unable to convince them to do so, then
we reluctantly take the decision to gradually reduce the
amount we purchase from them, instead focusing our
procurement on those suppliers who are making progress.
Ultimately, we may stop sourcing from a supplier
completely, but this is very much a last resort as, in doing
so, we lose any ability to engage and influence them.
Should this happen, we do still provide an opportunity for
future discussion and for suppliers to re-enter our supply
chain if they take steps to meet our requirements. There
are numerous cases of companies that, following
campaigns by NGOs, have made commitments to no
deforestation and demonstrated genuine efforts to
change. Nestlé is ready to support such companies.
Soya
Three countries – the United States, Brazil and Argentina –
account for approximately 80% of the world’s soya bean
production. We procured around 400 000 tonnes for selected
business in 2015, much of which came from these locations.
The vast majority of the soya products we procure are used
in pet food, so Nestlé Purina PetCare leads our Responsible
Sourcing activities in this area, together with our delivery
partner Proforest.
Verification and certification
To demonstrate that the soya we procure is sourced
responsibly, our partner Proforest undertakes site assessments
against our requirements. In 2015, site assessments were
carried out in Argentina, Brazil and the United States. In the
countries where site assessments have been completed, the
focus has now moved to working with suppliers to develop
and implement their action plans, and to provide training, for
example on HCV areas.
We accept certification against approved sustainability
schemes and initiatives that are consistent with our
requirements. For example, we consider the use of credits
from the Roundtable on Responsible Soy (RTRS) – a multistakeholder
initiative that aims to facilitate a global dialogue on
economically viable, socially equitable and environmentally
sound soya production – to be an interim solution until
assessments can be deployed more widely.
We also accept traceable soya from smallholders and
growers who can show they have an action plan and timeline
in place for meeting our requirements. In 2016, we aim to pilot
smallholder programmes in soya supply bases.
Traceability in the supply chain
Initially focusing on our supply chains in Brazil and Argentina,
owing to the volumes bought and the sustainability risks
involved, we have begun to engage with our US soya suppliers
as well, a process that continued throughout 2015.
Soya supply chain traceability results (not a global figure
– volume is for select businesses only)
Sugar
400 000 tonnes
55.5%
42.9%
Total volume:
400000 tonnes
Percentage of volume
traceable: 55.5%
(2015 target: 50%) to mill
and supply base (although
the complexity of supply
chains varies considerably)
Percentage of volume
Responsibly Sourced:
42.9% (2015 target:
35%)
Read our latest Progress Report on Responsible
Sourcing of Soya.
The majority of Nestlé’s sugar procurement comes from Brazil,
Mexico and India, although we also source supplies from a
number of other countries, including Australia, Thailand,
Indonesia and Malaysia. The sugar is used in many of our
foods and beverages, such as confectionery and ice cream.
Verification and certification
Our RSG and category-specific requirements – mainly for
sugarcane but also for sugar beet – were developed with the
support of Proforest, and reviewed by other NGOs.
They reinforce our commitments on issues in agricultural
supply chains, such as water stewardship and deforestation.
They also state that we will ensure that our sugar is sourced
from mills where the operations, as well as the farms and
plantations that supply them, comply with local laws and
regulations at the very least. This includes:
• No use of forced or child labour;
• Workers’ pay and conditions that meet at least legal or
mandatory industry standards;
• Respecting freedom of association and collective
bargaining, unless prevented by law;
• The provision of safe and healthy workplaces; and
• Mitigating the impacts on water by implementing water
management plans, and additional measures in waterstressed
areas.
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