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-EC1, Indirect economic impacts G4-DMA, G4-EC7, G4-EC8, Procurement practices G4-DMA, G4-EC9, Supplier assessment for labor practices G4-DMA,
Local communities G4-DMA, G4-SO1, G4-SO2, Supplier assessment for impacts on society G4-DMA
We have identified eight core areas that we believe are
important elements of successful rural development. By
focusing on these issues and using our expertise, either
directly or through our partners, we aim to make a real impact
on the livelihoods of farmers within our supply chains.
The eight core areas
• Farm economics (see below)
• Farmer knowledge and skills (see below)
• Farm workers
• Women’s empowerment
• Water and sanitation
• Nutrition
• Land and land tenure
• Natural resource stewardship
We accept that, in some countries, not all of these eight core
areas may be relevant and additional areas may be more
important. The Rural Development Framework process allows
for adjustments to this list.
Read more in the Water and Nutrition sections.
Our objective
By 2018 – Establish a total of 18 baseline assessments in
the sourcing locations of key importance to our business
that show pronounced social need, to guide us in aligning
our own activities with the priorities of local communities.
Our programme of baseline assessments is ongoing, and we
have introduced a new objective to measure progress. The
countries in which we have completed baseline assessments
are China, Côte d’Ivoire, Ethiopia, Indonesia, Kenya, Mexico, the
Philippines and Vietnam. These have primarily been markets
where we source coffee using the Nescafé Plan, though we
have also applied the Rural Development Framework to
communities supplying us with cocoa and cassava. (See also:
Rural Development Framework Public Summary Report.)
Initially, we planned assessments in 21 sourcing locations,
but have reduced this to 18 to optimise resources.
1. Farm economics
Our objective
By 2020 – Improve farm economics in seven priority
sourcing locations based upon the results of the RDF
baselines. (Farm economics comprises the following four
factors on which Nestlé will focus: productivity, quality,
costs and price premiums).
Ultimately, by improving farm economics, we expect to make
farming attractive. Farm economics is dependent upon a wide
variety of factors: productivity, quality, costs of production and
price premiums (for achieving quality or sustainability
standards). We also recognise the importance of the ‘farm
system’ – that is, that the target crop (the crop Nestlé is
buying) may not be the only crop grown and commercialised.
Price is a significant element of farm economics, though
not one over which a company can have a significant impact.
Supply–demand dynamics and the role of commodity
markets largely determine price movements. Therefore, we
have purposely excluded pricing as a lever upon which we
will concentrate.
Baseline study results
Although farms range in size from 0.5 to 6 hectares, typically
they are one to two hectares in area. Target crops are generally
grown along with other cash and food crops, as well as
livestock. The target crop typically provides around 40% of
income. Income sources are varied and numerous factors
– costs, productivity, quality, waste and prices – affect crop
income, making it difficult to focus on measuring farm income.
Improvements in crop productivity have led to improved
incomes, but there is much more to be done, not just on
productivity but also on the farm system. (See also: Rural
Development Framework Public Summary Report.)
Having completed a number of baseline assessments, we
have been able to define a series of goals and action plans to
take us towards our 2020 objective. We also anticipate
working collaboratively with other companies and
governments to develop an aligned understanding of the
status of countries and communities from which we source
materials. We will also continue to publish our findings, priority
issues and progress in addressing them.
Our mid-term goals include:
• Operating our Farmer Connect and smallholder upstream
sourcing activities to ensure our long-term supply, while
simultaneously contributing to rural development (as per
the UN Sustainable Development Goals);
• Continuing our programme of baseline assessments in
further sourcing locations;
• Ensuring that farmer training support programmes are:
developing agripreneurs; equally accessible to men, women
and young people; and available to farm workers (see
below); and
• Putting in place strategies (activities and targets) in priority
locations to improve food availability and dietary diversity.
2. Farmer knowledge and skills
Our objective
By 2017 – Ensure that farmer training support
programmes are: developing agripreneurs; equally
accessible to men, women and young people; and
available to farm workers.
Farmer knowledge and skills is a key focus area to drive
productivity, trading relations, cost control and management
of farms as small businesses. The provision of training is not
the objective; rather, the objective is the uptake of learning
from training and the application of best practices.
Nestlé in society – Creating Shared Value and meeting our commitments 2015 97