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, Supplier environmental assessment G4-DMA, G4-EN33, Supplier assessment for labor practices G4-DMA,
G4-LA15, G4-HR10, G4-SO9, G4-SO10
Under certain circumstances, we accept Bonsucro certification
as verification of compliance for the production of sugarcane.
We also accept traceable sugar from smallholders and growers
who have in place action plans for meeting our Responsible
Sourcing requirements. In the past year, sugar beet origins have
been included in our Responsible Sourcing programme for the
first time.
Traceability in the supply chain
While working with Proforest to map the supply chain back to
at least the sugar mill, we have prioritised countries into three
phases, starting with the countries where we buy the highest
volumes of sugar and where the potential sustainability risks
are greatest:
• 2012–2013: Brazil, Mexico and India;
• 2014: Australia, Thailand and the EU (sugarcane imports);
and
• 2015: Indonesia, Malaysia, Central America and the
United States.
Following assessments in locations in Phase 1 and 2 countries,
in 2015 we began assessing locations in the Phase 3 countries.
Sugar supply chain traceability results:
• Percentage of volume traceable: 60.9% (2015 target: 60%)
although traceability across sugarcane markets varies
• Percentage of volume Responsibly Sourced: 40.3%
(2015 target: 40%)
Assessments have identified a range of challenges in the
countries from which we source sugar. Together with suppliers
and implementing partners such as Proforest, we are actively
working to address them.
The most widespread and serious challenges involve safe
and healthy working conditions for sugarcane labourers.
Harvest periods see large numbers of temporary migrant
workers living and working in sugarcane-growing areas, who
then move on when the harvest is finished. The nature of this
labour force accounts for many of the social risks within the
supply chain. These include: high water consumption and
limited access to sanitation and potable water; overcrowding
and a lack of personal space and privacy; children not in
education; and limited knowledge about safe working
practices, such as the appropriate use, storage and disposal of
chemicals.
Our ‘no deforestation’ commitment, and support for the
Consumer Goods Forum’s ambition for zero net deforestation
by 2020, are also relevant in the sugar supply chain.
We are developing and sharing tools to enable smallholder
farmers to avoid deforestation and the loss of natural
vegetation, and finding ways to help them minimise water
consumption. The remediation activities are implemented in
conjunction with a network of local delivery partners in
specific countries, who can bring additional local knowledge
to the process.
During the 2014/2015 harvest season, Proforest carried out
22 RSG assessments in Mexico and other countries. As a
result of these and earlier assessments, we have instigated
practical programmes to help farmers implement bestmanagement
practices, specifically in terms of addressing the
root causes of poor working conditions, and particularly where
there is migrant labour. In 2016, we aim to provide technical
support and education to improve labour conditions in supply
bases that rely on manual labour.
Engaging with sugar suppliers
In Mexico, Nestlé has been engaging with Tier 1 supplier Beta
San Miguel (BSM), the country’s second-largest sugar
producer, on the Responsible Sourcing activities since 2012.
BSM reacted enthusiastically and collaboratively throughout
the whole process, providing traceability data, supporting
initial exploratory site assessments, attending supplier
workshops and committing to full site assessments at its six
supplying mills across the country. BSM and Nestlé Mexico
are continuing to work positively together to develop
strategies to improve practices across their supply bases.
Implementing partners Proforest and ABC Mexico have also
been assessing how best to approach the findings identified at
the Mexican mills that were assessed in the last harvest
season. We are supporting a training and capacity-building
programme run by ABC Mexico at five mills, which focuses on
working with the mills’ employees so that they have the ability
to develop policies, implement changes and roll out training
across a range of areas, including: identification and
conservation of forests; identification and protection of HCV
areas; eradication of child labour; safe working conditions; safe
handling of agrochemicals; and safe and hygienic housing.
Our aims in 2016 include implementing a wide range of
continuous improvements, including training on HCV areas,
and extending the Mexico training programme.
Shea
Read our latest Progress Report on Responsible
Sourcing of Sugar.
We purchase about 8000 tonnes of shea fat a year (this figure
is the same as was reported in the 2014 report and has not
been recalculated for 2015) and use it in a number of foods
and beverages, including confectionery.
Traceability in the supply chain
Due to a combination of limited resources, the small volumes
we buy and the complexity of the supply chain, the mapping
of our shea supply chains has not advanced enough for us to
complete any supplier assessments. Therefore, we cannot
claim any of the shea we procured to be traceable or
Responsibly Sourced as yet.
Because of Nestlé’s business needs, we have taken the
decision to remove shea from our list of key categories in
2016, when it will be replaced with cereals. This change will
enable our key categories to reflect more accurately our
purchasing volumes and activities.
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