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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 Rural development Water<br />

Environmental<br />

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

Human rights<br />

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

Our<br />

people<br />

G4-EN19, Transport G4-DMA, G4-EN30<br />

Transport <strong>and</strong> distribution<br />

Every day, we transport more than 140 000 tonnes of products from 1600 warehouses to <strong>our</strong> customers. Travell<strong>in</strong>g<br />

the equivalent of 269 times around the world every day, much of this distribution relies on partnerships with<br />

third-party logistics providers. They help us monitor <strong>our</strong> environmental performance <strong>and</strong> improve the efficiency of<br />

<strong>our</strong> network by reduc<strong>in</strong>g mileage, fuel consumption, greenhouse gas (GHG) emissions, noise <strong>and</strong> congestion. Our<br />

report<strong>in</strong>g spans the transportation of goods from factory to distribution centre to customer, cover<strong>in</strong>g 63% of the<br />

total product volume we distribute. All figures <strong>in</strong> this section are for 2014 – the latest data available – with the<br />

exception of the ISO certified data on page 196.<br />

Reduc<strong>in</strong>g emissions from transport<br />

<strong>and</strong> distribution<br />

Our commitment<br />

Provide climate change leadership<br />

Our objective<br />

By 2020 – Reduce GHG emissions per tonne of product<br />

by 10% <strong>in</strong> <strong>our</strong> distribution operations versus 2014.<br />

Our approach<br />

As outl<strong>in</strong>ed <strong>in</strong> The <strong>Nestlé</strong> Policy on Environmental<br />

Susta<strong>in</strong>ability, <strong>our</strong> approach is to:<br />

• Optimise distribution networks <strong>and</strong> route plann<strong>in</strong>g across<br />

<strong>our</strong> operations;<br />

• Explore opportunities to improve transportation by switch<strong>in</strong>g<br />

modes of transport <strong>and</strong> triall<strong>in</strong>g alternative fuels; <strong>and</strong><br />

• Exp<strong>and</strong> driver tra<strong>in</strong><strong>in</strong>g to address both safety <strong>and</strong><br />

environmental efficiency (see Our people for <strong>in</strong>formation on<br />

road safety).<br />

To further optimise <strong>our</strong> performance, we are focus<strong>in</strong>g on<br />

<strong>in</strong>creas<strong>in</strong>g vehicle utilisation, reduc<strong>in</strong>g empty transport<br />

j<strong>our</strong>neys <strong>and</strong> constantly review<strong>in</strong>g <strong>our</strong> strategic distribution<br />

networks. For <strong>our</strong> own fleet operations, we are work<strong>in</strong>g to<br />

optimise route plann<strong>in</strong>g on an ongo<strong>in</strong>g basis. Mov<strong>in</strong>g from<br />

traditional road transport to rail or short-sea freight, as well as<br />

switch<strong>in</strong>g to natural gas trucks, has the potential to further<br />

reduce <strong>our</strong> environmental impact <strong>in</strong> transportation. And <strong>in</strong> <strong>our</strong><br />

warehouses, we are concentrat<strong>in</strong>g on reduc<strong>in</strong>g energy<br />

consumption <strong>and</strong> switch<strong>in</strong>g to renewable energy.<br />

New technologies are crucial <strong>in</strong> every case, so we <strong>in</strong>vest <strong>in</strong><br />

<strong>in</strong>novations that will provide environmental <strong>and</strong> efficiency<br />

improvements.<br />

We have set <strong>our</strong>selves three new objectives to re<strong>in</strong>force <strong>our</strong><br />

efforts <strong>in</strong> reduc<strong>in</strong>g GHG emissions <strong>in</strong> <strong>our</strong> distribution operations<br />

<strong>and</strong> <strong>in</strong> <strong>our</strong> major warehouses, <strong>and</strong> us<strong>in</strong>g natural refrigerants <strong>in</strong><br />

<strong>our</strong> new refrigerated trucks.<br />

GHG emissions from <strong>our</strong> transport <strong>and</strong> distribution operations<br />

– specifically carbon dioxide (CO 2 ), methane (CH4) <strong>and</strong> nitrous<br />

oxide (N2O) – exceeded 3.1 million tonnes <strong>in</strong> 2014. We work to<br />

cont<strong>in</strong>uously improve <strong>our</strong> general environmental performance<br />

<strong>and</strong>, <strong>in</strong> particular, <strong>our</strong> GHG emissions.<br />

We are work<strong>in</strong>g to cut fuel consumption <strong>and</strong> GHG<br />

emissions by improv<strong>in</strong>g the efficiency of <strong>our</strong> distribution<br />

networks – mak<strong>in</strong>g better use of space <strong>in</strong> <strong>our</strong> vehicles,<br />

avoid<strong>in</strong>g unnecessary miles <strong>and</strong> us<strong>in</strong>g more efficient modes of<br />

transport. Our new objective is to cut GHG emissions per<br />

tonne of product by 10% by 2020, us<strong>in</strong>g 2014 data as <strong>our</strong><br />

basel<strong>in</strong>e, <strong>and</strong> will report on <strong>in</strong>itial progress <strong>in</strong> <strong>our</strong> next report.<br />

Emissions from transport (estimated million tonnes<br />

of CO 2 eq)<br />

2014 3.1<br />

2013 3.1 *<br />

2012 3.2<br />

*<br />

The 2013 figures have been restated due to a ref<strong>in</strong>ed report<strong>in</strong>g approach. The 2014<br />

figures are the latest available at the time of publication.<br />

Optimis<strong>in</strong>g vehicle capacity utilisation<br />

Delivery vehicles that travel empty or with limited loads are<br />

<strong>in</strong>efficient <strong>and</strong> costly, so we are mak<strong>in</strong>g a considerable effort<br />

to optimise vehicle capacity utilisation. Although the maximum<br />

load of a truck or conta<strong>in</strong>er can be limited by the maximum<br />

weight or the maximum available volume, even a 1%<br />

improvement <strong>in</strong> load utilisation would reduce distribution<br />

costs by around CHF 50 million <strong>and</strong> reduce CO 2 emissions by<br />

29 000 tonnes.<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> 193

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