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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<br />

Rural development<br />

Water<br />

Environmental<br />

susta<strong>in</strong>ability<br />

Human rights<br />

<strong>and</strong> compliance<br />

Our<br />

people<br />

G4-49, G4-50, G4-57, G4-58, Environmental grievance mechanisms G4-DMA, Labor practices grievance mechanisms G4-DMA, G4-LA16, Non-discrim<strong>in</strong>ation G4-DMA,<br />

Human rights grievance mechanisms G4-DMA, Anti-corruption G4-DMA, Compliance G4-DMA (Society), Grievance mechanisms for impacts on <strong>society</strong> G4-DMA,<br />

G4-SO11, G4-PR4, G4-PR7, Compliance G4-DMA (Product responsibility)<br />

In <strong>2015</strong>, we received 1400 messages through the <strong>Nestlé</strong><br />

Integrity Report<strong>in</strong>g System, cover<strong>in</strong>g issues such as leadership<br />

style, lab<strong>our</strong> practices, discrim<strong>in</strong>ation <strong>and</strong> harassment (see<br />

table below). Of all the substantiated <strong>and</strong> unsubstantiated<br />

cases presented through this system, 1137 (81%) were closed,<br />

of which more than 26% were substantiated, result<strong>in</strong>g <strong>in</strong> 35<br />

employees leav<strong>in</strong>g the company, <strong>and</strong> 70 written warn<strong>in</strong>gs <strong>and</strong><br />

other measures be<strong>in</strong>g issued, <strong>in</strong>clud<strong>in</strong>g <strong>in</strong>ternal process<br />

improvement <strong>and</strong> re<strong>in</strong>forcement <strong>and</strong> the establishment of<br />

performance improvement plans.<br />

Area of compla<strong>in</strong>t (%)<br />

37<br />

8<br />

We have developed <strong>and</strong> provided tra<strong>in</strong><strong>in</strong>g material on the<br />

<strong>in</strong>vestigation of non-compliance reports to market compliance<br />

officers across different countries. Us<strong>in</strong>g this communication as a<br />

spr<strong>in</strong>gboard, we have deployed several direct countermeasures,<br />

<strong>in</strong>clud<strong>in</strong>g enhanc<strong>in</strong>g awareness of the Integrated Report<strong>in</strong>g<br />

System, <strong>in</strong>vestigation guidance, monitor<strong>in</strong>g how compla<strong>in</strong>ts are<br />

managed <strong>and</strong> remediation measures.<br />

Our objectives<br />

21<br />

34<br />

Leadership style 478<br />

Lab<strong>our</strong> practices 300<br />

Discrim<strong>in</strong>ation <strong>and</strong><br />

harassment 110<br />

Other 512<br />

By <strong>2015</strong> – Scale up <strong>our</strong> communication about the<br />

external grievance system ‘Tell us’ to 5000 suppliers <strong>and</strong><br />

to 1000 downstream bus<strong>in</strong>ess partners (i.e. distributors)<br />

of <strong>Nestlé</strong> Nutrition products, as well as <strong>in</strong> first phase<br />

countries identified by the company.<br />

By 2016 – Cont<strong>in</strong>ue to scale up the communication about<br />

‘Tell us’ to suppliers <strong>and</strong> downstream bus<strong>in</strong>ess partners as<br />

well as to second phase countries (additional 20 countries).<br />

Tell us – <strong>our</strong> external compliance report<strong>in</strong>g system<br />

In <strong>2015</strong>, we further developed <strong>our</strong> Tell us communication<br />

channel. This is specifically designed to give all external<br />

stakeholders the opportunity to report any possible noncompliance<br />

<strong>in</strong>cidents aga<strong>in</strong>st the <strong>Nestlé</strong> Corporate Bus<strong>in</strong>ess<br />

Pr<strong>in</strong>ciples or laws, both <strong>in</strong>ternal <strong>and</strong> external. Although Tell us<br />

is run by <strong>Nestlé</strong>, it is controlled externally <strong>and</strong> allows<br />

stakeholders to report non-compliances confidentially or to<br />

seek advice on <strong>our</strong> practices.<br />

Follow<strong>in</strong>g its launch <strong>in</strong> 2014, we cont<strong>in</strong>ued to roll out the<br />

system throughout the year. Its availability has now been<br />

communicated to 5000 suppliers, to more than 1000 of <strong>our</strong><br />

downstream bus<strong>in</strong>ess partners, such as distributors, <strong>and</strong><br />

through <strong>Nestlé</strong> Nutrition, thus meet<strong>in</strong>g <strong>our</strong> objective.<br />

The system has been given good feedback by external<br />

stakeholders. We have applied the experience ga<strong>in</strong>ed from the<br />

first year of the system’s operation to cont<strong>in</strong>ue to ref<strong>in</strong>e the<br />

processes <strong>and</strong> platform, <strong>and</strong> to build on <strong>our</strong> expertise <strong>in</strong><br />

manag<strong>in</strong>g it. We have scaled up <strong>our</strong> communication about Tell<br />

us to further promote report<strong>in</strong>g of potential non-compliance<br />

<strong>in</strong>cidents by external stakeholders <strong>in</strong> the 12 phase one<br />

countries: Ch<strong>in</strong>a, Colombia, Egypt, Indonesia, Mexico, Nigeria,<br />

Pakistan, the Philipp<strong>in</strong>es, Russia, Saudi Arabia, Sri Lanka <strong>and</strong><br />

Vietnam. Communications about Tell us have been deployed<br />

on those local <strong>Nestlé</strong> websites.<br />

By the end of <strong>2015</strong>, over 5000 <strong>Nestlé</strong> suppliers had been<br />

appraised <strong>and</strong> <strong>in</strong>formed about Tell us through the<br />

implementation of the revised Supplier Code, <strong>and</strong> the<br />

<strong>in</strong>formation is also available on <strong>our</strong> website.<br />

External stakeholders are able to use Tell us through an<br />

onl<strong>in</strong>e form or by call<strong>in</strong>g a toll-free phone number. By the end<br />

of <strong>2015</strong>, we had received 372 messages. All comments<br />

received have been, or are be<strong>in</strong>g, addressed. There was one<br />

unsubstantiated claim of private-to-private bribery (that is,<br />

where some form of personal advantage has been requested<br />

or offered between an employee <strong>and</strong> a supplier or customer<br />

with a view to ga<strong>in</strong><strong>in</strong>g or ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g bus<strong>in</strong>ess). We also found<br />

that a number of messengers used the system to seek advice<br />

on topics of commitment to <strong>society</strong>.<br />

Of the supplier concerns, subsequent <strong>in</strong>vestigations<br />

resulted <strong>in</strong> one employee leav<strong>in</strong>g the company, one written<br />

warn<strong>in</strong>g be<strong>in</strong>g issued <strong>and</strong> other measures be<strong>in</strong>g taken,<br />

<strong>in</strong>clud<strong>in</strong>g <strong>in</strong>ternal process improvements <strong>and</strong> a re<strong>in</strong>forcement<br />

communication to suppliers.<br />

‘Tell us’ compla<strong>in</strong>ts received <strong>in</strong> <strong>2015</strong><br />

Subjects of messages received<br />

Number of<br />

messages received<br />

Private-to-private bribery 1<br />

Conflict of <strong>in</strong>terest (grouped with fraud) 18<br />

Environmental suggestions 3<br />

Seek<strong>in</strong>g advice 7<br />

Breast-milk market<strong>in</strong>g concerns 10<br />

Supplier concerns 9<br />

Lab<strong>our</strong> practices <strong>and</strong> leadership style 37<br />

General enquiries (<strong>in</strong>clud<strong>in</strong>g consumer<br />

compla<strong>in</strong>ts, customer concerns, safety,<br />

quality, etc.)<br />

287<br />

Total 372<br />

Tell us by region<br />

Quantity<br />

EMENA 36<br />

AMS 156<br />

AOA 126<br />

Undisclosed 54<br />

Total 372<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> 245

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