Nestlé in society Creating Shared Value and meeting our commitments 2015

Nestlé in society:
Creating Shared Value
Nutrition, health
and wellness
Rural development
Water
Environmental
sustainability
Human rights
and compliance
Our
people
G4-15, Customer health and safety G4-DMA, Marketing communications G4-DMA, G4-PR6, G4-PR7, Compliance G4-DMA (Product responsibility)
Compliance with the Nestlé Policy, national regulations for
implementing the WHO Code and the FTSE4Good BMS
marketing criteria are verified by three key mechanisms, as
outlined below:
Internal audits
In 2015, our practices were audited by corporate auditors
based at Nestlé headquarters (as part of the Nestlé Group
Audit and by auditors in 40 countries. Our annual compliance
reports are made available online.
External audits by Bureau Veritas
Bureau Veritas, a global leader in Testing, Inspection and
Certification (TIC), is commissioned by Nestlé to audit our
BMS marketing practices in two to three countries per year.
In 2015, Bureau Veritas conducted independent audits in Peru,
Pakistan and Egypt. The Bureau Veritas Assurance Statements
of these audits are published and made available online.
FTSE4Good Index verification process
The FTSE4Good Index Series is designed to measure the
performance of companies demonstrating strong
Environmental, Social and Governance (ESG) practices and is
published by FTSE Russell – a member of the London Stock
Exchange Group. It is one of the very few mechanisms to have
developed clear criteria to assess the marketing practices of
BMS manufacturers. Infant formula manufacturers included in
the index must undergo external and independent verification
of their practices in two countries every 18 months. In
addition, every six months they must report on the progress
made on the findings of the verifications to an expert
committee.
Since 2011, Nestlé has been the only infant formula
manufacturer included on the index. It is our hope that other
companies will seek inclusion by joining the effort to ensure
industry-wide progress on the responsible marketing of BMS.
We believe that the public and private sectors, as well as civil
society, have a role in encouraging other companies to seek
inclusion.
Maintaining our inclusion on the FTSE4Good Index is a key
objective. The lessons from the FTSE4Good verifications help
us strengthen our marketing practices of BMS.
These audits are complemented by the availability of
internal and external grievance mechanisms, which enable
Nestlé employees and external stakeholders to report any
allegation of non-compliance.
We invite all interested parties to consult the public reports
of these verifications, which are evidence of our commitment
to transparency and continuous improvement.
In 2015, 36 contraventions of the Nestlé Policy were
revealed through audits 1 .
Training our employees
We require our employees working in infant nutrition to fully
understand the importance of promoting and protecting
breastfeeding, as well as complying with the Nestlé Policy
(see Compliance). In 2015, 100% of our staff involved in the
marketing of infant formula were trained on the importance of
the WHO Code.
Our employees are tested regularly on their knowledge of
national legislation pertaining to the responsible marketing of
BMS and on the Nestlé Policy on the WHO Code. The results
are taken into account when evaluating individual
performance. Disciplinary actions, including termination of
employment, are applied to employees who commit deliberate
or serious violations of our policies.
Read more about our training programmes.
Training distributors and third-party suppliers,
and informing retailers
Ensuring that all of the marketing of our BMS complies with
national regulations and our Nestlé Policy presents numerous
challenges, such as reaching out to millions of distribution
points, which are often small outlets with whom we have no
direct commercial relationship. We do our utmost to make
sure that all third parties with whom we have a contractual
relationship comply with our Nestlé Policy on the WHO Code.
Our work in this area includes:
• A clause in all formal agreements and contracts with third
parties stating that, in higher-risk countries, sales of Nestlé
BMS products should comply with local legislation
regarding the marketing of BMS, or the Nestlé Policy when
it is stricter;
• Developing guidelines on compliance with the Nestlé Policy
and issuing them to distributors and retailers;
• Encouraging our distributors and customers to share our
guidelines with their clients;
• Training our distributors on the Nestlé Policy; and
• Informing retailers of our requirements related to
compliance with the Nestlé Policy and national regulations.
Although we do our utmost to ensure that third-party retailers
follow our policy, our sphere of control is restricted as we must
also respect local anti-trust and commercial laws. This limits
our influence over how BMS are sold by independent parties
with whom we do not have a commercial relationship.
Good governance
We have an extensive range of governance mechanisms to
help ensure all our operations comply with:
• National regulations on implementing the WHO Code;
• Our own Nestlé Policy on the WHO Code; and
• The FTSE4Good BMS criteria.
These mechanisms rely on the three practices set out set out
on following page.
1 Based on Internal Audits conducted by corporate auditors and External Audits conducted
by Bureau Veritas. Final number of contraventions could change as the findings of
verifications which took place at the end of 2015 are still being assessed.
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