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 G4-EC2, Energy G4-DMA, Emissions G4-DMA, G4-EN15, G4-EN16, G4-EN17, G4-EN20 For example, we: • Help the farmers who supply our raw materials use water more efficiently; • Provide investment assistance for biogas digesters in dairy farms; • Optimise recipes and packaging to reduce the carbon footprint of Nestlé products along their value chain; and • Help consumers reduce their energy consumption and emissions when they prepare them, such as with our energy-efficient Nespresso and Nescafé Dolce Gusto machines. As well as reducing GHG emissions, we also help agricultural and production systems become more resilient to the changing climate. This includes the training on sustainable farming methods that we provide to our suppliers through initiatives such as the Nestlé Cocoa Plan, the Nescafé Plan and Nespresso’s AAA Program, and the development and distribution of high-yielding disease- and drought-resistant species of cocoa and coffee. We have made a commitment on no deforestation that aligns with the CGF’s goal to achieve zero net deforestation by 2020. Furthermore, we proactively engage with governments, industry and civil society to make continuous progress, and actively contribute to global dialogue and industry initiatives. Reporting Our commitment Our objective Promote transparency and proactive, long-term engagement in climate policy By 2016 – Provide climate change information in our Annual Report package using the Climate Change Reporting Framework developed by the Climate Disclosure Standards Board. We already provide climate change information in mainstream corporate filings and reports, in conformance with the Climate Disclosure Standards Board (CDSB) Climate Change Reporting Framework requirements. In 2015, we enhanced and updated the reporting of our Scope 3 emissions 9 under the framework, to cover all relevant stages of the life cycle. We have decreased our Scope 3 emissions in a number of areas, due to a change in output, a change in methodology or emissions reduction activities, as follows: • Change in output: purchased goods and services; upstream transportation and distribution; end-of-life treatment of sold products; • Change in methodology: fuel- and energy-related activities; investments; and • Emissions reduction activities: fuel- and energy-related activities; waste generated in operations; business travel; downstream transportation and distribution. Our detailed reporting of Scope 3 emissions can be found on pages 124–137 of our 2015 CDP submission. We use the GHG Protocol, ‘Corporate Value Chain (Scope 3) Accounting and Reporting Standard’ to estimate our GHG emissions in our upstream and downstream operations. We also engage with key suppliers to obtain detailed information on their emission-generating activities, and help them implement less GHG-intensive practices. In line with our broader Scope 3 emissions reporting, we will continue to extend our GHG reduction efforts beyond our direct manufacturing emissions. Reducing GHG emissions Our commitment Our objectives Provide climate change leadership By 2015 – Reduce our direct GHG emissions per tonne of product by 35% versus 2005, resulting in an absolute reduction of GHG emissions. Reduction in direct GHG emissions (Scope 1) 2005–2015 kg CO 2eq per tonne product 120 0% -10% 100 -20% -30% 80 -40% -42.7% 60 -50% -60% 40 -70% -80% 20 -90% 0 -100% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 baseline Target reduction against 2005 baseline % reduction since 2005 9 Scope 3: all the indirect emissions that occur in a company’s value chain, both upstream and downstream. Nestlé in society – Creating Shared Value and meeting our commitments 2015 208
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, G4-EN15, G4-EN16, G4-EN17, G4-EN18, G4-EN20 By 2020 – Reduce GHG emissions (Scopes 1 and 2) per tonne of product in every product category to achieve an overall reduction of 35% in our manufacturing operations versus 2010. Reduction in total GHG emissions (Scopes 1 & 2) 2010–2015 kg CO 2eq per tonne product 160 140 120 100 80 60 40 20 0 2010 baseline 2011 2012 2013 2014 2015 -35% target reduction against 2010 baseline 0% -10% -16.4% -20% -30% -40% -50% -60% -70% -80% -90% -100% We have made the reduction of GHG emissions and climate change adaptation a focus area in The Nestlé Policy on Environmental Sustainability and have committed to reduce our direct GHG emissions per tonne of product by 35% by 2015 compared with 2005, resulting in an absolute reduction of GHG emissions. Having achieved that target, we have now announced a new GHG reduction target for 2020. This covers indirect as well as direct emissions (Scopes 1 and 2), and is consistent with scientific estimates that we should limit global warming to less than 2°C. We have reduced the GHGs emitted in the manufacturing of one kilogramme of products by 16% compared to five years ago. To achieve this, we have implemented numerous solutions, including improving energy efficiency of our factories through Nestlé Continuous Excellence and installing new equipment, switching to cleaner fuels and using renewable energy sources. For example: • Wind power now meets nearly 80% of Nestlé Mexico’s electricity needs, avoiding the emission of about 100 000 tonnes of CO 2 eq annually; • Nestlé’s worldwide operations now include 22 factories that are using spent coffee grounds as a renewable and carbonneutral fuel, and 21 factories using wood chips as a renewable energy source; and • In France, a fourth Nestlé factory is being converted to use wood as a renewable alternative to fossil fuel. With three factories already obtaining between 88% and 94% of their energy needs from wood chips, our Nescafé factory in Dieppe will burn spent coffee grounds and wood chips from early 2016. The use of wood boilers has reduced by more than 40% the direct CO 2 emissions in Nestlé France since 2010. We are phasing out industrial refrigerants with high global warming and ozone-depleting potential, and will further expand the use of natural refrigerants to our industrial refrigeration systems and ice cream chest freezers. % reduction since 2010 As deforestation is a major contributor to increasing global GHG emissions, we want to see zero net deforestation as soon as possible and have committed to supporting efforts towards this ambition in our supply chains by 2020. With food wastage generating significant GHG emissions, we have also committed to achieving zero waste for disposal in our sites by 2020. Direct emissions By investing in renewable sources, improving energy efficiency and switching to cleaner fuels, we reduced total direct GHG emissions by 5.2% last year, to 3.7 million tonnes of CO 2 eq. That represents a 42.7% reduction since 2005; in the same period, production volume has risen by 50.2%. So, by the end of 2015, we have reduced our direct GHG emissions per tonne of product by 42.7% since 2005. This equates to a 14% absolute reduction, meaning we have exceeded our 2015 target. Having met this initial target ahead of schedule, we must now maintain our progress in this area. Direct GHG emissions (million tonnes of CO 2 eq) 2015 3.70 2014 3.91* 2013 4.07* * The 2013 and 2014 figures have been restated due to more complete data. Direct GHG emissions (kg of CO 2 eq/tonne of product) 2015 68 2014 73* 2013 78* * The 2013 and 2014 figures have been restated due to more complete data. Direct GHG emissions versus production volume, 2005–2015 Index 160 140 120 100 80 60 40 20 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Production volume Direct GHG emissions Nestlé in society – Creating Shared Value and meeting our commitments 2015 209
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Nestlé in society Creating Shared Value and meeting our commitments 2015

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