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 Energy G4-DMA, G4-EN3, G4-EN4, G4-EN5, G4-EN6, G4-EN7, G4-EN19, Compliance G4-DMA (Environmental), Overall G4-DMA Manufacturing Manufacturing comprises all the processes that are necessary to transform perishable raw materials into safe, nutritious, value-added food products for consumers. We use the Nestlé Environmental Management System (NEMS) to implement The Nestlé Policy on Environmental Sustainability. NEMS is based on a continual improvement management cycle and its effectiveness rests on the use of the methodologies provided by our Nestlé Continuous Excellence (NCE) initiative. Through the application of NCE practices, we are improving our efficiency, quality and environmental performance throughout our manufacturing operations. This translates into doing more with fewer resources and less waste to help preserve natural resources. Our commitment Improve resource efficiency in our operations Our approach We’ve continued to decouple environmental impacts from growth – improving our environmental impacts while increasing our volume of production. Although we have doubled our manufacturing production over the last 10 years, we’ve steadily decreased our water use, direct GHG emissions and waste for disposal 6 . Resource consumption and waste generation versus production volume, 2005–2015 Index 160 140 120 100 80 60 Achieving and maintaining operational excellence is fundamental to improving our resource efficiency. Through the 3Cs of the NCE initiative (outlined below), we continue to improve our resource efficiency, quality and productivity. Its main goal is to engage employees in: • Excelling in compliance, both legal and internal; • Delighting our consumers, through sharing our sustainability aims and achievements in brand communications; and • Driving competitive advantage, by progressing towards zero waste, and improving water and energy efficiency. Going for Zero is our manufacturing operations’ contribution to the NCE initiative. It describes our Manufacturing Excellence ambition to ‘go for zero’ in each of five dimensions: safety, quality, cost, delivery and environment. Our LCAs inform us of the proportion of energy that is used during the manufacturing of our products. It is at this stage of the value chain that we can do the most to directly manage and improve our energy performance, and we take every opportunity to do so. As stated in The Nestlé Policy on Environmental Sustainability, we aim to use the most efficient technologies and apply best practices to further optimise energy and water consumption; minimise waste generation; use sustainably managed renewable energy sources; recover value from byproducts; and control and eliminate emissions, including GHGs. 40 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Production volume Total water withdrawal Direct GHG emissions Total on-site energy consumption Total water discharge Total waste for disposal 6 Operational figures include joint ventures; financial figures do not. Nestlé in society – Creating Shared Value and meeting our commitments 2015 182
Nestlé in society: Creating Shared Value Nutrition, health and wellness Rural development Water Environmental sustainability Human rights and compliance Our people Energy G4-DMA, G4-EN3, G4-EN4, G4-EN5, G4-EN6, G4-EN7, G4-EN19, G4-EN21, Overall G4-DMA Reducing our energy consumption Our objective By 2015 – Reduce energy consumption per tonne of product in every product category to achieve an overall reduction of 25% versus 2005. Since 2005, our total on-site energy consumption has increased by 6.6% while the total production volume increased by 50.2% over the same period. Our objective was to achieve an overall reduction of 25% per tonne of product by 2015, compared with a 2005 baseline and, globally, we’ve exceeded our target by reducing total energy consumption, per tonne of product, by 29% since 2005. This is the result of efforts by our engineers and environmental sustainability managers, working together to reduce and recover energy in line with the NCE initiative. Changes in our product mix, and acquisitions and divestments have also contributed. Total on-site energy consumption (petajoules) 2015 93.8 2014 96.8* 2013 98.6* * The 2013 and 2014 figures were restated due to more complete data. Total direct energy consumption (petajoules) 2015 63.8 2014 66.5* 2013 68.0* * The 2013 and 2014 figures were restated due to more complete data. Total indirect energy consumption (petajoules) 2015 80.7 2014 81.1 2013 81.5 We’ve conducted improvements in all our product categories except petcare; this is due to significant changes in our pet litter business, including the recent internalisation of certain manufacturing processes that were previously conducted externally. However, despite the increase in energy consumption observed during manufacturing, these same changes have led to substantial environmental benefits when evaluated across the life cycle, as revealed by the LCAs we conducted. Further reducing our energy consumption is a challenge, largely due to the evolution of our product portfolio over time towards more value-added products, which in turn allows our consumers to save energy. Energy consumption per product category (GJ/tonne) 2005 2015 Variation Powdered and liquid beverages 17.08 7.2 -58% Water 0.39 0.2 -44% Milk products and ice cream 4.93 3.3 -33% Nutrition and healthcare 10.70 7.2 -32% Prepared dishes and cooking aids 3.93 3.3 -16% Confectionery 5.89 4.6 -23% Petcare 1.81 1.9 +3.1% Group average 2.42 1.7 -29% Environmental Target Setting programme Our Environmental Target Setting (ETS) programme aims to improve the environmental performance of our factories, based on a thorough assessment of baseline energy and water consumption. To help our factory teams improve their own environmental performance and meet our commitments, we have developed a web-based tool, Do It Yourself. This enables each factory to identify energy- and water-saving opportunities from successful solutions already adopted around the Group. In line with our commitment to improve resource efficiency, our projects prioritise the introduction of new, energy-efficient technologies. • Our Canlubang factory in the Philippines ran an ETS in June 2015, identifying 29 projects that would generate annual savings exceeding 70 000 GJ of energy (17% reduction) and 152 827 m 3 of water (23% reduction), avoid 6415 tonnes of CO 2 and save CHF 1.6 million per year. The factory will prioritise seven schemes that will pay for themselves within a year, such as recovering heat from boilers, and another four that require no capital expenditure; • Similarly, our Purina factory in Portogruaro, Italy, conducted an ETS in February 2015, developing an action plan to save 22 155 GJ of energy and 4349 m 3 of water (roughly a 10% reduction in both), avoid 1402 tonnes of CO 2 and save CHF 528 000 a year. The 17 agreed projects include replacing leaking steam traps, and installing insulation and heat recovery systems; • The Nespresso Production Centre in Orbe uses water from the local river for cooling during some production processes. A more efficient management system was put in place, resulting in a 150 000 m 3 reduction in our yearly consumption of river water – the equivalent of 50 Olympic swimming pools; and • The optimisation of operational parameters at the Nespresso Production Centre in Avenches allowed us to reduce the site’s electricity consumption by 1400 000 kWh, which is equivalent to the yearly electricity consumption of about 200 families. Nestlé in society – Creating Shared Value and meeting our commitments 2015 183
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Nestlé in society Creating Shared Value and meeting our commitments 2015

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