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, Biodiversity G4-DMA, G4-EN12, G4-EN13, G4-EN14, Emissions G4-DMA We are already seeing the consequences of climate change. Food production will come under increased pressure in the future. This is why Europe’s food and drink manufacturers are actively working to try to mitigate and adapt to climate change through actions such as investing in low-carbon technologies, working with farmers and proactively engaging with consumers and partners along the supply chain.” Pascal Gréverath, Assistant Vice-President – Environmental Sustainability, Nestlé; Chair of FoodDrinkEurope’s Environmental Sustainability Committee Protecting and enhancing biodiversity Nestlé depends on biodiversity in many ways, but especially for the raw materials we source from farms, forests and oceans. We are committed to managing our operations in a way that safeguards all natural capital but particularly forests, high conservation value areas, soils and water. Our approach Our commitment Preserve natural capital, including forests Natural capital is the sum total of nature’s resources and services, and it is the basis upon which economic activity is built. We procure a large range of raw materials from farms and forests, and recognise our long-term success depends on the products and services provided by natural capital. We also know agricultural and forestry practices are a major contributor to the loss of natural capital – particularly through the conversion of natural habitats, overuse of chemicals and water, and degradation of soil – so we aim to develop our business in a way that safeguards it. In our Nestlé Commitment on Natural Capital, we explicitly commit to act as a responsible steward of natural capital, focusing on water, deforestation, soil management and biodiversity 10 . We will continue to report on risks and responses; support consumers to make more informed choices; and work collaboratively with stakeholders at community and landscape levels. Assessing our priorities In our approach to natural capital, we understand both our dependency and impact on biodiversity and ecosystem services. Illustrating the scale of this challenge, we have estimated that Nestlé is dependent upon an area of land approximately equivalent to about two-and-a-half times the area of Switzerland for producing the commodities we use. Putting a value on the impact our business has can help us understand and define the best way to reduce those impacts, and make better business decisions. This may be through corporate investment or, for broader impacts we have in common with others, regulatory or governmental intervention. We have also compiled a list of priority issues and dependencies, drawing from a wide range of research from organisations such as the International Union for Conservation of Nature (IUCN), FAO, the Convention on Biological Diversity, UNEP and the WWF. Understanding our dependencies on biodiversity in this way helps us decide where best to focus our activities. We use a number of sources of guidance, both internal and external, to guide our operations and those of our suppliers, some of which are outlined below. • We have produced detailed requirements for water use in agriculture that are used in our RSG to improve water stewardship at the farm level; • We have published a paper on soil health and shared it throughout our direct sourcing network. Soil health plays a vital role in food production and food security. As we purchase nearly 1% of the world’s agricultural output, we are significantly affected by unsustainable agricultural practices that contribute to the degradation of agricultural soils through erosion, loss of organic matter, nutrient depletion, contamination and increased salinity; and • To help prioritise our interventions, we use Global Forest Watch, an online mapping application that provides data about forest degradation and deforestation worldwide. We believe we can have the greatest positive impact in three key areas – sourcing raw materials, improving the performance of our factories and supporting public policy – as outlined over the following pages. 10 Defined by the United Nations Convention on Biological Diversitys ‘the variability among living organisms at ecosystem, species and genetic levels.’ Nestlé in society – Creating Shared Value and meeting our commitments 2015 216
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, Biodiversity G4-DMA, G4-EN11, G4-EN12, G4-EN13, G4-EN14, Emissions G4-DMA Priority issues and dependences for Nestlé Biome 11 Issues Nestlé products and services Nestlé response Forest Ocean Fresh water Grasslands Atmosphere Soil Deforestation Forest degradation Overfishing Acidification Warming Nutrients/dead zones Plastics Water scarcity/overextraction Pollution Loss of high conservation value grasslands Increasing temperature Pollutants Ozone layer depletion Soil loss and degradation Increasing salinity Packaging, paper, timber pallets, palm oil, soya. Fish and seafood. Every stage of our value chain. Agriculture, grazing (milk, meat). Stable climate, reliable precipitation, temperature. All agricultural crops. • Comprehensive commitment to manage forests well and eliminate deforestation through programmes across relevant commodities. • Responsible Sourcing Guideline (RSG) on seafood; • Plastic recycling schemes and membership of industry platform; and • Good practices on fertiliser application for commodities. • Commitments and key performance indicators on water across supply chains, factories and public policy. • Application of the high conservation value approach to responsible land management and sourcing; and • Restoration through silvopastoral programmes at dairy farm level. • Emission-reduction initiatives in factories and use of natural refrigeration units; • Tackling deforestation/highcarbon soils; and • Facilitating dairy farmer investment in biogas digesters. • Part of our RSG on palm oil, soya and sugar; • UTZ certification of cocoa; and • Nescafé Better Farming Practices. 11 The world’s major communities, classified according to the predominant vegetation and characterised by adaptations of organisms to that particular environment. Nestlé in society – Creating Shared Value and meeting our commitments 2015 217
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Nestlé in society Creating Shared Value and meeting our commitments 2015

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