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-EC2, Energy G4-DMA, Emissions G4-DMA
Providing climate change leadership
With the highest carbon dioxide levels in years, the resulting changes in climate may threaten global food security
in general, and our business in particular. The long-term supply of safe, high-quality ingredients for our products
may be affected as crop yields fall and production areas shift. And the ability to manufacture or distribute food
products may be hampered by extreme weather events such as floods and storms. That’s why climate change is a
material issue for Nestlé, and why our response to climate change across the value chain is a holistic one.
Our approach
The food and drink sector relies on a secure and sustainable
supply of raw materials. Changes in climate and weather
patterns can impact the sector significantly, affecting food
security and price stability. The scale of the challenge is such
that climate change initiatives require broad-based
commitment and multi-stakeholder effort.
Climate change is deeply integrated into our company-wide
risk management processes, and we are committed to
providing climate change leadership while continuously
making efforts to improve the environmental performance of
our operations.
Our commitment goes beyond reducing the air emissions of
our operations, and those associated with the production and
distribution of our products. It includes climate change
adaptation, responsible water stewardship, as water availability
and security is where climate change will become apparent
first; it also encompasses striving for zero waste; using energy
and resources efficiently; switching to cleaner fuels; investing
in and utilising sustainably managed renewable energy
sources; and optimising distribution networks.
We commit to set science-based GHG emissions
reduction targets and to focus on climate change
adaptation because this is fully aligned with our own
explicit commitments, which reflect our respect for
the society in which we operate, respect for the
environment and respect for future generations.”
Paul Bulcke, Chief Executive Officer, Nestlé
Mapping milk loss and waste
in Pakistan
To further understand and reduce the waste occurring in our
supply chain, we initiated a milk waste mapping exercise in
Pakistan, applying the WRI Food Loss & Waste Protocol (see
above). The Pakistani dairy sector was chosen because of its
complexity, the high volumes involved and because it provided
an opportunity to test the efficiency of our dairy hub model.
Working with external consultants, we mapped the value
chain from farms to consumers. In total, Nestlé processes 480
kilotonnes of milk a year, sourced mainly from traditional small
farms but also some larger operations. Before reaching our
factories, the milk transits through village milk collection and
chilling centres; after processing, 90% of it is sold through
traditional trade channels.
For each stage of the value chain, we analysed all potential
causes of wastage. Losses were quantified (either through
interview or direct observation) and extrapolated across the
supply chain. Milk reused elsewhere in the supply chain (for
example, as animal feed) was counted as a loss.
Results were impressive. The total milk loss in our supply
chain was estimated to be only 1.4%, significantly lower than
other estimates (approximately 15% to 19% of the milk sold by
Pakistani farmers is wasted en route to market, according to an
Asian Development Bank report of 2004). This is due to the
cooling, storage and transport systems we have in place.
In addition, sharing best practice between farmers
contributes to increased milk production and less milk being
rejected by chilling centres, while improved management at
the retail stage could further reduce product losses.
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