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 G4-2, Indigenous rights G4-DMA, Assessment G4-DMA, G4-HR11 Human rights We keep our responsibility to respect human rights at the forefront of our business by continually reviewing and assessing the human rights risks of our business activities. We strive to prevent and address any negative impacts that we may have on the rights of those whom we employ, do business with or interact with along our value chain. Through carefully determining a balance between compliance and continuous improvement on the one hand, and transparency and confidentiality on the other, we adapt our approach to the local circumstances where we operate. Human rights reporting: for an integrated approach Thanks to our five years’ experience of rolling out our Human Rights Due Diligence Programme (HRDDP) across our business activities in various countries, we now have a better understanding of what our human rights priorities are. We are determined to manage these salient human rights issues – those human rights at risk of the most severe negative impacts through the company’s activities and business relationships. We achieve this through our HRDDP and a dedicated action plan for each issue identified as salient. Some of them are rooted in economic, social and cultural realities that take time to change, especially when they are located far up our supply chain. In such cases, we are committed to using the leverage that we have through the industry, our suppliers and other stakeholders to address these issues and align them with international human rights standards. This year, for the first time, together with Shift we are using the UNGP Reporting Framework to report on the progress we have made – and the challenges that we face – in this area. The last few years have seen the emergence of a multitude of new projects and initiatives in the area of business and human rights, many of them focusing on transparency and reporting. The California Transparency in Supply Chains Act (2010), the EU non-financial reporting and diversity information directive (2014) and the UK Modern Slavery Act (2015) are just a few examples that illustrate how this trend has materialised at national and regional levels. To meet growing expectations for more transparency and clarity from regulators, investors, civil society organisations and others, we have opted for an integrated approach to human rights reporting that is based – for the first time – on the UNGP Reporting Framework. Instead of releasing a stand-alone report on human rights, we have opted to include reporting against the UNGP Reporting Framework as part of our annual CSV report. The Corporate Human Rights Benchmark initiative that is being developed by the Institute for Human Rights and Business, the Business & Human Rights Resource Centre and a group of investors, has also helped us frame the way in which we will be reporting our human rights in the future. This chapter, therefore, describes our overall approach to human rights, including the governance structure in place (UNGP Reporting Framework Part A) and the focus of reporting (UNGP Reporting Framework Part B), while details about how we manage specific salient human rights issues are provided in the relevant sections of this report (UNGP Reporting Framework Part C). This integrated approach fits perfectly with the way we have approached human rights at Nestlé since 2010. Integrating human rights into our existing policies, procedures and management systems has always been our objective. We firmly believe that this is the only way to embed human rights considerations into our daily business activities across the company wherever we operate. Our entire HRDDP has been structured with this principle in mind and will continue to serve this purpose in the future. Nestlé in society – Creating Shared Value and meeting our commitments 2015 226
Nestlé in society: Creating Shared Value Nutrition, health and wellness Rural development Water Environmental sustainability Human rights and compliance Our people Freedom of association and collective bargaining G4-DMA, G4-HR11 Our commitment Assess and address human rights impacts in our operations and supply chain Focusing on salient human rights issues Our objective By 2016 – Develop action plans and targets for each human rights risk identified as salient (Freedom of association and collective bargaining; Working time; Workers’ accommodation and access to basic services; Safety and health; Living wage; Data protection and privacy; Child labour; Forced labour; Land acquisition; Access to water and sanitation; Access to grievance mechanisms). Scope The 11 salient human rights issues that we have identified span our value chain. They reflect the scope of our business activities and the potential impacts we have on the people we employ, do business with or otherwise interact with throughout our entire value chain. Based on these 11 salient issues, we have identified six groups of rights holders who are particularly at risk: • Our own employees; • On-site contractors; • Suppliers and, in particular, their employees; • Farmers and farm workers; • Local communities; and • Consumers. As reflected in the table on page 228, several rights holders can be at risk for each salient issue. This means that, in total, there are 40 risks to rights holders that we think are important for our company, because of the potential negative human rights impacts associated with them. In addition, during the process of identifying salient issues, discrimination was identified by external stakeholders as an issue that cuts across issues and should be integrated into the action plans that we will develop on each salient issue in 2016. For now, no specific geographical areas have been identified as priorities for each issue. This work will be done as part of the development of action plans to assess where resources should go first, based on the levels of risks to rights holders. Integrating human rights into the mainstream With transparency ever more essential in today’s business environment and with stakeholders increasingly wanting to know how companies operate, businesses need to demonstrate clearly how they deliver their commitment to respecting human rights. The UNGP, which Nestlé was one of the first companies to adopt, provide specific indicators and guidance that helps companies report more comprehensively on their overall human rights approach, performance and challenges. Complementing the Global Reporting Initiative’s (GRI’s) G4 reporting standards, which Nestlé also use, the UNGP Reporting Framework makes companies look beyond the traditional corporate risk management and materiality approaches by identifying salient human rights issues that are the most severe to rights holders. The Reporting Framework is both a reporting and a management tool. By using it this year for the first time we have been able to: • Improve the way we report on human rights, in particular in areas like policy commitments and governance (see our Human Rights Due Diligence Programme); • Further align our reporting efforts with international standards, and in particular with the UNGP; and • Identify salient human rights issues that have now become priorities for the company and will lead to dedicated action plans being developed by the relevant functions, and implemented in country operations (see our new corporate commitment on this). Based on our experience, the UNGP Reporting Framework can help companies to position human rights as integral to their activities, integrating them in the mainstream of what they do and how they operate on a daily basis. By further embedding human rights into our activities in this way, Nestlé is ensuring that they form an essential part of the way we do business. Defining salient human rights issues A company’s salient human rights issues are those human rights that are at risk of the most severe negative impact through its activities on business relationships. Nestlé in society – Creating Shared Value and meeting our commitments 2015 227
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Nestlé in society Creating Shared Value and meeting our commitments 2015

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