Nestlé in society Creating Shared Value and meeting our commitments 2015

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Nestlé in society: Creating Shared Value Nutrition, health and wellness Rural development Water Environmental sustainability Human rights and compliance Our people Materials G4-DMA, Energy G4-DMA, Biodiversity G4-DMA, Emissions G4-DMA, Effluents and waste G4-DMA, Products and services G4-DMA, Compliance G4-DMA (Environmental), Transport G4-DMA, Overall G4-DMA, Supplier environmental assessment G4-DMA, Environmental grievance mechanisms G4-DMA Our role in environmental sustainability As an essential prerequisite for Creating Shared Value, we have to not only comply with all applicable legal requirements and the Nestlé Corporate Business Principles but also ensure that the principle of sustainability is embedded in all of our activities, brands and products. This is particularly important in an environment where water is increasingly scarce, natural resources are constrained and biodiversity is declining. All of these elements are vital for feeding a growing world population and for the development of Nestlé. Moreover, climate change may exacerbate our planet’s environmental challenges. As stated in The Nestlé Policy on Environmental Sustainability, we are committed to environmentally sustainable business practices at all stages of the product life cycle. This means making the right choices to protect the future, by using sustainably managed and renewable resources where we can, improving resource efficiency in our operations and continuing to work towards our target of zero waste. We also seek to provide climate change leadership, preserve natural capital, and provide meaningful and accurate environmental information. To help us assess and optimise the environmental performance of our products and their packaging, we apply a product life-cycle approach, involving our partners, from farm to consumer and beyond. The year in brief Challenges Actions Achievements The global scale of the challenge is such that climate change leadership requires broad-based commitment and collaborative effort. Nestlé supports a number of multistakeholder initiatives, including the Paris Pledge for Action, welcoming the adoption of a new, universal climate agreement at COP 21 in Paris, Caring for Climate, and the American Business Act on Climate pledge. 1st Nestlé’s position in the CDP’s prestigious Climate A List, with a score of 100 out of 100 in the Climate Disclosure Leadership Index. Per the UNEP, an estimated 11.2 billion metric tonnes of solid waste are currently being collected around the world every year, and the decay of the organic portion is contributing around 5% of global greenhouse gas emissions (GHG). Our Zero Waste for Disposal Guideline helps all Nestlé sites prevent, reuse and recover waste for disposal and by-products. 105 Number of Nestlé sites that achieved zero waste for disposal. We need to continually optimise our packaging designs if we are to save material and avoid food wastage. We use ecodesign tools to assess the overall environmental performance of products and packaging throughout its life cycle. 6 174 Projects assessed using our ecodesign tools Consumer engagement is a challenge as environmental sustainability is a complex topic to explain to non-specialists. Going beyond the label, we are rolling out QR codes across our product portfolio, linking consumers to mobile-friendly websites that provide additional, user-friendly content on environmental issues. 119 Countries where fact-based environmental information is accessible to consumers. Nestlé in society – Creating Shared Value and meeting our commitments 2015 168
Nestlé in society: Creating Shared Value Nutrition, health and wellness Rural development Water Environmental sustainability Human rights and compliance Our people Materials G4-DMA, Energy G4-DMA, Biodiversity G4-DMA, Emissions G4-DMA, Effluents and waste G4-DMA, Products and services G4-DMA, Compliance G4-DMA (Environmental), Transport G4-DMA, Overall G4-DMA, Supplier environmental assessment G4-DMA, Environmental grievance mechanisms G4-DMA Material issues Nestlé uses a formal materiality process to identify the most important issues for our stakeholders and our business. The results are communicated in a materiality matrix. Our material issues are also considered and mapped with regard to their degree of importance in different parts of the Nestlé value chain. In the value chain, ‘Agriculture’ includes smallholder farmers with whom we do not have direct relationships and ‘Tier 1 suppliers’ refers to those suppliers in direct commercial relationships with Nestlé. The Nestlé value chain Agriculture Tier 1 suppliers Nestlé Retail/ business channels Consumers Each material issue is made up of a number of sub-issues, which are highlighted during the research process. They are used as a lens to help define the scope of analysis. In this section, we have provided a synthesis of the findings related to environmental sustainability. Four material issues – and a number of specific sub-issues – that fall under the banner of environmental sustainability were rated as being of concern to our stakeholders and of strategic importance to our business. They spanned climate change; natural capital, including biodiversity, deforestation and soil fertility; resource efficiency and waste, including energy consumption, land use, littering and the environmental impacts associated with our manufacturing operations and packaging; and food waste. Mitigating climate change is a primary concern of our stakeholders and, for many, managing the impacts on agriculture is a particular focus. Our stakeholders are advancing concerted multi-stakeholder efforts to protect natural capital, reduce resource consumption and enable solutions linked to the circular economy. MATERIALITY ISSUE VALUE CHAIN KEY: Moderate Significant Major Agriculture Tier 1 suppliers Nestlé Retail/ business channels Consumers Resource efficiency and waste Improving the direct and indirect use of resources, reducing waste and optimising opportunities for recovery, reuse or recycling of by-products, and disposing of waste appropriately. Sub-issues defined Resource efficiency and waste combines packaging, manufacturing and transport and distribution that were distinct issues in the 2013 matrix. • Consumer behaviour: informing consumers about the environmental performance of products to raise awareness and foster more resource-efficient behaviours. • Energy consumption: direct and indirect energy use; composition of energy supply and efficiency measures. • Land use: managing the arrangements, activities and inputs undertaken to produce, change or maintain land. • Littering: reducing pollution of the environment from packaging and waste products discarded without consent in land and water. • Manufacturing environmental impacts: improving the environmental performance (e.g. air and water pollution) of the production process. • Packaging: optimising packaging design and materials, considering product and packaging performance across the life cycle. • Transport and distribution: improving the environmental impacts of transport and distribution. Nestlé in society – Creating Shared Value and meeting our commitments 2015 169
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Nestlé in society Creating Shared Value and meeting our commitments 2015

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