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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 />

Bureau Veritas’ Independent Assurance Statement<br />

Any errors or misstatements identified dur<strong>in</strong>g the engagement<br />

were corrected prior to the CSV Report be<strong>in</strong>g published.<br />

For <strong>our</strong> detailed methodology which expla<strong>in</strong>s the work<br />

undertaken to <strong>in</strong>form <strong>our</strong> op<strong>in</strong>ion, please see ‘Methodology’<br />

below.<br />

To: The Stakeholders of <strong>Nestlé</strong> SA<br />

Introduction <strong>and</strong> objectives of the engagement<br />

Bureau Veritas has been engaged by <strong>Nestlé</strong> SA (<strong>Nestlé</strong>) to<br />

provide <strong>in</strong>dependent assurance over the <strong>Nestlé</strong> <strong>in</strong> <strong>society</strong>:<br />

Creat<strong>in</strong>g <strong>Shared</strong> <strong>Value</strong> <strong>and</strong> Meet<strong>in</strong>g Our Commitments <strong>2015</strong><br />

report (the CSV Report) published onl<strong>in</strong>e <strong>in</strong> PDF on the <strong>Nestlé</strong><br />

website. The aim of this process is to provide reassurance to<br />

<strong>Nestlé</strong>’s stakeholders over the accuracy, reliability <strong>and</strong><br />

objectivity of the reported <strong>in</strong>formation <strong>and</strong> that it covers the<br />

issues material to the bus<strong>in</strong>ess. The CSV Report has been<br />

self-declared to comply with the ‘<strong>in</strong> accordance –<br />

comprehensive’ requirements of the GRI G4 guidel<strong>in</strong>es.<br />

Scope of work<br />

The scope of work <strong>in</strong>cluded a review of CSV activities <strong>and</strong><br />

performance data over the report<strong>in</strong>g period January 1 st to<br />

December 31 st <strong>2015</strong>. Specifically, this <strong>in</strong>cluded:<br />

i) Statements, <strong>in</strong>formation <strong>and</strong> performance data conta<strong>in</strong>ed<br />

with<strong>in</strong> the CSV report;<br />

ii) <strong>Nestlé</strong>’s management approach of material issues; <strong>and</strong><br />

iii) <strong>Nestlé</strong>’s reported data <strong>and</strong> <strong>in</strong>formation as per the<br />

requirements of the Global Report<strong>in</strong>g Initiative (GRI) G4<br />

Susta<strong>in</strong>ability Report<strong>in</strong>g Guidel<strong>in</strong>es.<br />

The assurance process was conducted <strong>in</strong> l<strong>in</strong>e with the<br />

requirements of the AA1000 Assurance St<strong>and</strong>ard (2008)<br />

Type 2 1 assurance. We applied a moderate 2 level of assurance.<br />

Op<strong>in</strong>ion <strong>and</strong> commentary<br />

On the basis of the scope of work, noth<strong>in</strong>g came to <strong>our</strong><br />

attention to suggest that:<br />

• the account of <strong>Nestlé</strong>’s CSV activities <strong>and</strong> performance<br />

dur<strong>in</strong>g <strong>2015</strong> <strong>and</strong> presented <strong>in</strong> the CSV Report is materially<br />

misstated;<br />

• <strong>Nestlé</strong> does not adhere to the pr<strong>in</strong>ciples of <strong>in</strong>clusivity,<br />

materiality <strong>and</strong> responsiveness as per the AA1000<br />

Accountability Pr<strong>in</strong>ciples St<strong>and</strong>ard 2008.<br />

Positive developments<br />

We are pleased to observe progress <strong>in</strong> the follow<strong>in</strong>g areas:<br />

• As <strong>in</strong>vestment <strong>in</strong>to CSV-related projects cont<strong>in</strong>ue to be the<br />

driver for performance improvements <strong>in</strong> a number of CSV<br />

areas, <strong>Nestlé</strong> has made progress with the governance of<br />

such projects by <strong>in</strong>corporat<strong>in</strong>g <strong>in</strong>vestment decisions <strong>in</strong>to its<br />

Capital Expenditure process, particularly <strong>in</strong> the area of<br />

Environmental Susta<strong>in</strong>ability.<br />

• While some of <strong>Nestlé</strong>’s <strong>commitments</strong> came to an end <strong>in</strong><br />

<strong>2015</strong>, <strong>Nestlé</strong> has demonstrated cont<strong>in</strong>ued focus on its<br />

material CSV issues by establish<strong>in</strong>g new <strong>commitments</strong> that<br />

challenge its performance go<strong>in</strong>g forward.<br />

• It is positive to observe that the <strong>Nestlé</strong> Nutrition Institute<br />

(NNI) ma<strong>in</strong>ta<strong>in</strong>s a high degree of <strong>in</strong>dependence <strong>in</strong> its<br />

policies <strong>and</strong> underly<strong>in</strong>g systems from <strong>Nestlé</strong>’s bus<strong>in</strong>ess<br />

priorities <strong>and</strong> focus. As the NNI is mov<strong>in</strong>g towards<br />

publish<strong>in</strong>g more practical material, this is essential <strong>in</strong><br />

ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g its reputation as a credible research body.<br />

• <strong>Nestlé</strong> has rolled out an updated Responsible Market<strong>in</strong>g to<br />

Children policy which aligns with the EU Pledge criteria,<br />

committ<strong>in</strong>g to a consistent global approach that ensures<br />

m<strong>in</strong>imum performance levels across markets.<br />

Key recommendations for 2016<br />

• As per <strong>our</strong> recommendation <strong>in</strong> the 2014 CSV report, <strong>Nestlé</strong><br />

should consider communicat<strong>in</strong>g more <strong>in</strong>formation to<br />

stakeholders on how governance over material issues<br />

extends beyond the corporate entity to the end markets,<br />

<strong>and</strong> also to other entities such as Jo<strong>in</strong>t Ventures <strong>and</strong> newly<br />

acquired bus<strong>in</strong>esses.<br />

• Report<strong>in</strong>g on Responsible S<strong>our</strong>c<strong>in</strong>g <strong>and</strong> Traceability figures<br />

with<strong>in</strong> the CSV report still lags by 1 year. In addition,<br />

reported figures do not cover all of <strong>Nestlé</strong> bus<strong>in</strong>esses 3 , <strong>and</strong><br />

are reliant on estimations <strong>and</strong> manual consolidation of data.<br />

<strong>Nestlé</strong> should therefore consider review<strong>in</strong>g its <strong>in</strong>ternal<br />

report<strong>in</strong>g process <strong>and</strong> tools for responsible s<strong>our</strong>c<strong>in</strong>g to<br />

produce more timely <strong>and</strong> accurate data that aligns with the<br />

CSV report<strong>in</strong>g period. In addition, <strong>Nestlé</strong> should ensure that<br />

report<strong>in</strong>g on the 12 priority categories is consistent; cover<strong>in</strong>g<br />

all bus<strong>in</strong>esses <strong>in</strong>cluded with<strong>in</strong> the scope of report<strong>in</strong>g.<br />

1 Type 2 Assurance: an engagement <strong>in</strong> which the assurance provider gives f<strong>in</strong>d<strong>in</strong>gs <strong>and</strong><br />

conclusions on the pr<strong>in</strong>ciples of Inclusivity, Materiality <strong>and</strong> Responsiveness <strong>and</strong> verifies<br />

the reliability of specified susta<strong>in</strong>ability performance <strong>in</strong>formation (AA1000AS (2008)<br />

St<strong>and</strong>ard). For further <strong>in</strong>formation see www.accountability.org/st<strong>and</strong>ards/aa1000as/<br />

2 All relevant text was supported by <strong>in</strong>terview evidence as a m<strong>in</strong>imum, <strong>and</strong> supported by<br />

corroborat<strong>in</strong>g <strong>in</strong>terview evidence or another s<strong>our</strong>ce wherever possible. A moderate level<br />

of assurance is commensurate with “limited” assurance as def<strong>in</strong>ed <strong>in</strong> the ISAE3000 (2003,<br />

rev2008) assurance st<strong>and</strong>ard.<br />

3 Bus<strong>in</strong>esses not covered by the scope of responsible s<strong>our</strong>c<strong>in</strong>g <strong>and</strong> traceability data <strong>in</strong>clude<br />

<strong>Nestlé</strong> Nutrition, <strong>Nestlé</strong> Sk<strong>in</strong> Health, <strong>and</strong> <strong>Nestlé</strong> Health Science.<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> 295

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