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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-EC2, Energy G4-DMA, Biodiversity G4-DMA, G4-EN12, G4-EN13, G4-EN14, Emissions G4-DMA<br />

We are already see<strong>in</strong>g the consequences of climate<br />

change. Food production will come under <strong>in</strong>creased<br />

pressure <strong>in</strong> the future. This is why Europe’s food <strong>and</strong><br />

dr<strong>in</strong>k manufacturers are actively work<strong>in</strong>g to try to<br />

mitigate <strong>and</strong> adapt to climate change through actions<br />

such as <strong>in</strong>vest<strong>in</strong>g <strong>in</strong> low-carbon technologies,<br />

work<strong>in</strong>g with farmers <strong>and</strong> proactively engag<strong>in</strong>g with<br />

consumers <strong>and</strong> partners along the supply cha<strong>in</strong>.”<br />

Pascal Gréverath, Assistant Vice-President –<br />

Environmental Susta<strong>in</strong>ability, <strong>Nestlé</strong>; Chair of<br />

FoodDr<strong>in</strong>kEurope’s Environmental<br />

Susta<strong>in</strong>ability Committee<br />

Protect<strong>in</strong>g <strong>and</strong> enhanc<strong>in</strong>g biodiversity<br />

<strong>Nestlé</strong> depends on biodiversity <strong>in</strong> many ways, but especially<br />

for the raw materials we s<strong>our</strong>ce from farms, forests <strong>and</strong><br />

oceans. We are committed to manag<strong>in</strong>g <strong>our</strong> operations <strong>in</strong> a<br />

way that safeguards all natural capital but particularly forests,<br />

high conservation value areas, soils <strong>and</strong> water.<br />

Our approach<br />

Our commitment<br />

Preserve natural capital, <strong>in</strong>clud<strong>in</strong>g forests<br />

Natural capital is the sum total of nature’s res<strong>our</strong>ces <strong>and</strong><br />

services, <strong>and</strong> it is the basis upon which economic activity is<br />

built. We procure a large range of raw materials from farms<br />

<strong>and</strong> forests, <strong>and</strong> recognise <strong>our</strong> long-term success depends on<br />

the products <strong>and</strong> services provided by natural capital.<br />

We also know agricultural <strong>and</strong> forestry practices are a major<br />

contributor to the loss of natural capital – particularly through<br />

the conversion of natural habitats, overuse of chemicals <strong>and</strong><br />

water, <strong>and</strong> degradation of soil – so we aim to develop <strong>our</strong><br />

bus<strong>in</strong>ess <strong>in</strong> a way that safeguards it.<br />

In <strong>our</strong> <strong>Nestlé</strong> Commitment on Natural Capital, we explicitly<br />

commit to act as a responsible steward of natural capital,<br />

focus<strong>in</strong>g on water, deforestation, soil management <strong>and</strong><br />

biodiversity 10 . We will cont<strong>in</strong>ue to report on risks <strong>and</strong><br />

responses; support consumers to make more <strong>in</strong>formed<br />

choices; <strong>and</strong> work collaboratively with stakeholders at<br />

community <strong>and</strong> l<strong>and</strong>scape levels.<br />

Assess<strong>in</strong>g <strong>our</strong> priorities<br />

In <strong>our</strong> approach to natural capital, we underst<strong>and</strong> both <strong>our</strong><br />

dependency <strong>and</strong> impact on biodiversity <strong>and</strong> ecosystem<br />

services. Illustrat<strong>in</strong>g the scale of this challenge, we have<br />

estimated that <strong>Nestlé</strong> is dependent upon an area of l<strong>and</strong><br />

approximately equivalent to about two-<strong>and</strong>-a-half times the<br />

area of Switzerl<strong>and</strong> for produc<strong>in</strong>g the commodities we use.<br />

Putt<strong>in</strong>g a value on the impact <strong>our</strong> bus<strong>in</strong>ess has can help us<br />

underst<strong>and</strong> <strong>and</strong> def<strong>in</strong>e the best way to reduce those impacts,<br />

<strong>and</strong> make better bus<strong>in</strong>ess decisions. This may be through<br />

corporate <strong>in</strong>vestment or, for broader impacts we have <strong>in</strong><br />

common with others, regulatory or governmental <strong>in</strong>tervention.<br />

We have also compiled a list of priority issues <strong>and</strong><br />

dependencies, draw<strong>in</strong>g from a wide range of research from<br />

organisations such as the International Union for Conservation<br />

of Nature (IUCN), FAO, the Convention on Biological Diversity,<br />

UNEP <strong>and</strong> the WWF. Underst<strong>and</strong><strong>in</strong>g <strong>our</strong> dependencies on<br />

biodiversity <strong>in</strong> this way helps us decide where best to focus<br />

<strong>our</strong> activities.<br />

We use a number of s<strong>our</strong>ces of guidance, both <strong>in</strong>ternal <strong>and</strong><br />

external, to guide <strong>our</strong> operations <strong>and</strong> those of <strong>our</strong> suppliers,<br />

some of which are outl<strong>in</strong>ed below.<br />

• We have produced detailed requirements for water use <strong>in</strong><br />

agriculture that are used <strong>in</strong> <strong>our</strong> RSG to improve water<br />

stewardship at the farm level;<br />

• We have published a paper on soil health <strong>and</strong> shared it<br />

throughout <strong>our</strong> direct s<strong>our</strong>c<strong>in</strong>g network. Soil health plays a<br />

vital role <strong>in</strong> food production <strong>and</strong> food security. As we<br />

purchase nearly 1% of the world’s agricultural output, we<br />

are significantly affected by unsusta<strong>in</strong>able agricultural<br />

practices that contribute to the degradation of agricultural<br />

soils through erosion, loss of organic matter, nutrient<br />

depletion, contam<strong>in</strong>ation <strong>and</strong> <strong>in</strong>creased sal<strong>in</strong>ity; <strong>and</strong><br />

• To help prioritise <strong>our</strong> <strong>in</strong>terventions, we use Global Forest<br />

Watch, an onl<strong>in</strong>e mapp<strong>in</strong>g application that provides data<br />

about forest degradation <strong>and</strong> deforestation worldwide.<br />

We believe we can have the greatest positive impact <strong>in</strong> three<br />

key areas – s<strong>our</strong>c<strong>in</strong>g raw materials, improv<strong>in</strong>g the performance<br />

of <strong>our</strong> factories <strong>and</strong> support<strong>in</strong>g public policy – as outl<strong>in</strong>ed over<br />

the follow<strong>in</strong>g pages.<br />

10 Def<strong>in</strong>ed by the United Nations Convention on Biological Diversitys ‘the variability among<br />

liv<strong>in</strong>g organisms at ecosystem, species <strong>and</strong> genetic levels.’<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> 216

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