E workbook 151213 by Peoplematters

Environmental Sustainability Leadership Workshop

Inspiring People for Long-Term Environmental Improvements 1

Contents 1.Agenda

Page Numbers 3

2.The Nestlé Policy on Environmental Sustainability 3.Environmental Sustainability - NGOs & Investors

4-10 11-19

4.Competitor Analysis

20-33

5.What Nestlé is doing in terms of Environmental Sustainability

34-56

6.Food Waste

57-64

7.Innovation & Creativity

65-66

8.Communicating in an Environmental Way

66-80

9.Nestlé Environmental Sustainability Tools

81-93

Agenda Day 1 Introduction/Objectives

The State of ES

The Nestlé Policy on ES

ES World, Governments, UN,NGOs & Investors

Competitor Analysis

What is Nestlé Doing For ES?

Changing Our ES Practices

Innovation & Creativity

Communicating in an Environmental Way

Nestlé ES Tools

Commitment Memo

Next Steps

Day 2

Session 2 The NestlĂŠ Policy on Environmental Sustainability

The Nestlé Corporate Business Principles Consumers

The environment

1.Nutrition, Health & Wellness 2.Quality assurance and product safety 3.Consumer communication

Human rights and labour practices 4.Human rights in our business activities 5.Leadership and personal responsibility 6.Safety and health at work

Suppliers and customers 7.Supplier and customer relations 8.Agriculture and rural development

Environmental sustainability – We commit ourselves to environmentally sustainable business practices. At all stages of the product life cycle we strive to use natural resources efficiently, favour the use of sustainably-managed renewable resources and target zero waste.

10. Water – We are committed to the sustainable use of water and continuous improvement in water management. We recognise that the world faces a growing water challenge and that responsible management of the world’s resources by all water users is an absolute necessity.

Capturing The Essence of Each Principle 9. Environmental sustainability …by being the best at preserving the environment for future generations.

10. Water

…by using water – the world’s most valuable resource responsibly

The Nestlé Policy on Environmental Sustainability “We apply a product life cycle approach involving our partners from farm to consumer and beyond. Specific to our food and beverage business we focus on water preservation, natural resources efficiency, biodiversity conservation, air emissions reduction, climate change adaptation, and zero waste.” Research and Development Sourcing of raw materials Manufacturing Packaging

Product Life Cycle

Distribution Marketing & Consumer Communication Corporate Communication Human Resources Regulation

The Importance and Relevance of Governance The Articles of Association is the constitution of the company and environmental sustainability is embedded within this and satisfies amongst other things shareholder commitments. The Board of Directors (BoD) is the ultimate governing body of the Company. The BoD delegates to the CEO the power to manage the Company in line with its Articles of Association stating that NestlĂŠ shall, in pursuing its purpose, aim for long-term, sustainable value creation. The CEO chairs the Executive Board (EB) and delegates to its member the powers necessary carrying out their responsibilities. The BoD and the EB are assisted by a number of governance bodies covering environmental sustainability, including the BoD Audit Committee as well as, at executive level, the Operations Sustainability Council, R&D Council for Sustainability and Nutrition, Brands & CSV Advisory Team, Issues Round Table and Group Compliance. 8

NEMS (NestlĂŠ Environmental Management System) This policy is implemented through the NEMS (which complies with the international ISO14001 standard) and management is accountable for NEMS implementation within their area of responsibility. Governance - NEMS is based on the continuous improvement management cycle and is depicted in the following spiral:

How Does NCE Relate to the NestlĂŠ Policy on ES The effectiveness of NEMS will rest on the use of the methodologies, models and tools provided by our NCE initiative. Through the application of NCE practices, we improve our efficiency, quality and productivity, which translates into doing more with fewer resources and less waste. In addition, NCE fosters a systemic, employee-involved, continuous improvement culture that will help us further develop more environmentally sustainable business practices in the years to come. To ensure a consistent and coherent implementation worldwide, NestlĂŠ submits all its manufacturing sites to ISO 14001 certification by independent accredited bodies and is expanding this programme to all its units.

Session 3 Environmental Sustainability â&#x20AC;&#x201C; NGO & Investors

NGOs & Others Influence over Consumers Consumers are informed by an increasing number of organisations, institutions and social media: Greenpeace campaigns Local consumer NGOs Rating agencies (Dow Jones Sustainability Index) Sustainability reports Consumer organisations Webpages benchmarking products (Good Guide) Social media groups on Facebook, LinkedIn, Twitter

Examples of Nestlé‘s Engagement with NGOs & Governments FAIRTRADE, World Cocoa Foundation, Fair Labor Association

Rainforest Alliance, Sustainable Agriculture Network (SAN), 4C (Common Code for the Coffee Community)

UTZ Certified, Rainforest Alliance, Fairtrade, 4C Association

Example NGO Partnership #1 - NestlĂŠ Cocoa Plan The cocoa industry is facing great challenges: cocoa production is down and so is the quality. Plants are getting old and sick. Farmers drop the cocoa production to get better income from other sources. In 2009, NestlĂŠ launched the Cocoa Plan, a long-term initiative that helps cocoa farmers to make better use of their land and to improve the quality of life for themselves and their family. Wherever possible we work with farmer organisations such as co-operatives, as we believe these are beneficial to farmers giving them the scale to market their cocoa collectively. We believe that to build on this framework, we use the expertise of or partner with other organisations. These partners can be non-governmental organisations (NGOs), government organisations or private companies depending on the local circumstances. We have partners in the areas of child labour sensitisation, water and sanitation, farmer training, trees and certification. Certification is a good way to reward farmers and their organisations for producing sustainable cocoa. But it also gives consumers added assurance that the cocoa was produced under proper conditions. There are various certification systems under way to recognise cocoa farmers who are operating in accordance with higher quality standards, giving these farms and farmer organisations a form of official certification as well as better prices for their cocoa. UTZ Certified and Fairtrade are two such examples. In addition, we are also involved with industry wide programmes through World Cocoa Foundation (WCF). To work effectively, farmers need to be organised into groups such as cooperatives who can then carry out much of the administration needed for certificate holders. To qualify, farmers also need to have been taught good farming practices. There is therefore still a long way to go before certification becomes widespread. That said, all the work of The NestlĂŠ Cocoa Plan extends far beyond those farms included in certification.

For more information, go to http://www.nestlecocoaplan.com/

Example NGO Partnership #2 - The Nescafé Plan The Nescafé Plan, launched in 2010, contains a set of objectives which will help Nestlé further optimise its coffee supply chain. In addition to the CHF 110 million invested over the past ten years, Nestlé will invest CHF 500 million in coffee projects by 2020. This includes an investment of CHF 350 million for the Nescafé Plan and CHF 150 million for Nespresso. The Rainforest Alliance, an international non-governmental organisation, will support Nestlé together with other partners of the Sustainable Agriculture Network (SAN) and the coffee association, 4C (Common Code for the Coffee Community), in meeting the Nescafé Plan objectives related to farming. Over the next five years, Nestlé will double the amount of Nescafé coffee bought directly from farmers and their associations, eventually purchasing 180,000 tonnes of coffee from around 170,000 farmers every year. With the support of the Rainforest Alliance and the 4C Association, all directly purchased green coffee will meet the internationally-recognized 4C sustainability standards by 2015. In addition, 90,000 tonnes of Nescafé coffee will be sourced according to the Rainforest Alliance and Sustainable Agriculture Network (SAN) principles by 2020. Under the Nescafé Plan, Nestlé will distribute 220 million high-yield plantlets to farmers by 2020. This helps farmers to rejuvenate their plantations, thus multiplying the yield on existing land and increasing farmers’ income. Through partnerships with public and private institutions in a number of countries, including Indonesia, Mexico, the Philippines, Thailand and most recently Colombia, Nestlé has already distributed over 16 million coffee plantlets over the past ten years. Nestlé is also expanding its technical assistance programmes, in which Nestlé agronomists provide advice on farming and post-harvest practices, to over 10,000 coffee farmers a year.

For more information, go to http://www.nescafe.co.uk/sustainability

Example NGO Partnership #3 - Nespresso Ecolaboration™ Program The Nespresso Ecolaboration™ Program is committed to continuous improvement in coffee sustainability, find out how this can give you peace of mind. At Nespresso, ensuring a future supply of highest quality coffee means protecting the environment and supporting farming communities. The Nespresso Ecolaboration™ Program brings together NGOs, consultants, academics, technical experts and business partners to improve our sustainability performance from cherry to cup. Since 2003, Nespresso has partnered with the Rainforest Alliance and Fairtrade to build the innovative AAA Sustainable Quality™ Program. The programme ensures highest quality coffee cultivation in ways that are environmentally sound and beneficial to farming communities. Through our Vertech™ Network (R&D teams, machine suppliers, designers and sustainability experts) we are designing machines for the future with improved performance. To achieve our goal of reducing CO2 emissions, we are examining new energy supplies and ways of recycling waste materials. For example, our latest machines are equipped with automatic power-save or power-off functions. As part of the Ecolaboration™ Program, Nespresso has made a commitment for 2013: To source 80% of our coffee from the AAA Sustainable Quality™ Program To reduce the carbon footprint of a cup of Nespresso Grand Cru coffee by 20%

For more information, go to http://www.nespresso.com/ecolaboration/ch/en/index.html

Example NGO Partnership #4 - Sustainable Sourcing Of Palm Oil In 2010, Nestlé committed that its products will not be associated with deforestation. Despite Nestlé being only a tiny player in the global palm oil market, deforestation connected with the commodity means the target has become a key priority for Nestlé. Nestlé recognises that in order to achieve no deforestation we must work with all supply chain actors, from plantation owners, processors and suppliers all the way to the consumer. In 2009, we joined the Roundtable on Sustainable Palm Oil (RSPO). In 2010, we partnered with The Forest Trust (TFT) to establish Responsible Sourcing Guidelines for palm oil. Nestlé’s innovative partnership work with TFT to combat deforestation connected to palm oil production was voted a Silver Winner in the Best Green Collaborative Initiative Award category at the 2011 International Green Awards™. We were also a runner up in the Ethical Corporation Responsible Business Award. Nestlé supports the RSPO as the industry-wide group to promote sustainable palm oil production. We use the RSPO as a means to verify compliance of our palm oil purchases against most of the Nestlé Responsible Sourcing Guidelines (all except the additional Nestlé requirements on peatlands and high carbon stock forests which we verify separately). We have committed to purchasing palm oil solely from certified sustainable sources by 2015. We have made strong progress towards that goal. In 2011, 54% of our palm oil volumes s were certified sustainable palm oil. In 2012 we achieved 80% certified sustainable palm oil, out of which 13% segregated RSPO certified palm oil and 68% GreenPalm certificates. Our 2012 palm oil update report will be published in the first quarter of 2013. By the end of 2013, Nestlé will be sourcing 100% CSPO (certified sustainable palm oil), two years ahead of our 2015 public commitment.

For more information, go to http://www.nestle.com/csv/ruraldevelopment/sourcingoverview/combatingdeforestation and http://www.nestle.com/Media/Statements/Pages/Update-on-deforestation-and-palm-oil.aspx

Greenpeace – Thank You Nestlé!

17.5.2010 STAR QUOTE: (after publication of «Nestlé in Society») "It's the time to congratulate Nestlé. The company is a forerunner in CSR. Nestlé has set concrete targets like reducing water usage by 40 % (compared to 2005) » Greenpeace Finland,18 March 2013

Nestlé & Investors – 2013 Ranked number 1 in the 2013 Carbon Disclosure Leadership Index and Carbon Performance Leadership Index Nestlé were the leading food products company in the Dow Jones Sustainability Index with a score of 88%, double the industry average Nestlé number one position in Oxfam’s sustainability scorecard improving ratings from 54% (February) to 61% (September) Nestlé has been named one of the world's “greenest” brands for 2013 in Interbrand's third annual Best Global Green Brands report. Nestlé was ranked 14th place overall out of 50 brands that were selected. Out of a total of € 60 trillion invested in equities in Europe € 7.5 trillion are dedicated to Socially Responsible Investing (SRI) with a growing trend of 57% between 2005 and 2011 (shareholder resolution)

Session 4 Competitor Analysis

Coca-Cola Environmental Sustainability Initiatives “Live positively” environmental campaign launched in 2006

“Water neutrality” by 2020 – to return the same amount of water used in its beverages Recycle 100% of its water through the “Replenish” initiative High profile partnerships e.g. WWF, UNDP, Water Resources Group, Nature Conservancy 100% of its equipment HFC-free by 2015 5% reduction in GHG emissions in developing countries in the last 5 years Renewable packaging – the “PlantBottle”- long-term goal of 100% renewable materials http://www.coca-cola.co.uk/environment + BIC Report August 2012

Coca-Cola ES Initiative: Recyclometer

Did you know? Recycling just one 330ml aluminium can saves enough energy to power a light bulb for two and a half hours. http://www.coca-cola.co.uk/environment

The Coca Cola Recyclometer calculates the positive impact you have each time you recycle. With a few clicks, this handy tool tells you how much energy you save when you recycle cans, plastic bottles, jars, and more, compared with the energy that would be lost by simply throwing those items away.

Danone Environmental Sustainability Initiatives As early as 1972, Antoine Riboud (then CEO) was drawing attention to the environmental impacts of businesses on the planet, defining “Danone’s Dual Project” 30% reduction in carbon emissions between 2008 and 2012 “Danone’s crazy challenge: 30% less CO2 over 4 years” “Dan Footprint” carbon reduction tool launched in 2008 110 “Carbon Masters” across their business units responsible for the reduction targets Reforestation flagship project in Senegal with NGO, Oceanium – planting of 34 million mangrove plants in Senegal to store carbon in 2009 Bioplastic bottle developed in Brazil with bottles made from 95% sugar cane plant http://www.danone.com/en/sustainable-development.htm + BIC Report August 2012

Danone ES Initiative Best Global Green Brand 2013 (Food Sector)

http://www.danone.com/en/sustainable-development.html + BIC Report August 2012

From Danone’s «Down to Earth» blog

Kraft Foods Environmental Sustainability Initiatives Kraft’s environmental sustainability policy “Creating a more delicious world” launched in 2006 Rainforest Alliance’s largest purchaser for coffee and Fairtrade/Rainforest Alliance’s largest purchaser of certified cocoa Kenco coffee 100% certified by Rainforest Alliance  resulted in double digit increase in sales 36 manufacturing plants in 13 countries sending zero waste to landfill (12 in North America and 24 in Europe) New packaging design tool called “Packing Eco-Calculator” Partnerships with RecycleBank and Terracycle for recycling Eliminate all HFCs from their cooling machines by 2020 Reducing GHGs – underground refrigerated storing area in United States 100% certified palm oil by 2015 Using LCA specialist, Quantis, to assess the company’s total global footprint Partnership with Bill & Melinda Gates Foundation to help small scale African growers on a 90 million USD project over 5 years http://www.kraftfoodscompany.com/eu/en/responsibility/sustainability + BIC Report August 2012

Kraft Foods ES Initiative My Kenco: Rewards for eco-consumers Kenco has a Rewards Club for its consumers to thank them for joining them on their ‘eco journey’ so far. This is a place where consumers can collect points for themselves or their business and claim rewards or give the points to charity. Each reward is chosen with the environment in mind, so that consumers can play an even bigger part in Kraft’s commitment to a more “eco-friendly” way of life.

http://www.kraftfoodscompany.com/eu/en/responsibility/sustainability

Mars Environmental Sustainability Initiatives Mars have had five principles (the “Principles in Action), one of which is mutuality. Mars proclaims this to be related to environmental sustainability and dates back to 1947, the time of Forrest Mars Sr Short-term “absolute” goals – 2007 as baseline and 2015 as deadline (GHG and water use by 25% and zero waste to landfill) In longer-term (2040) – zero fossil fuel energy use and zero GHG emissions and similar commitments for waste and water use Before going public with its policy, and with a strong emphasis on science, Mars collaborated with Corporate Citizen Company to identify its global material impact (GHG emissions, land use and water) World’s largest photovoltaic (solar panel) installation at a food production plant in United States Transportation – higher capacity (double-decker trucks in UK), alternative fuel (natural gas), reduced packaging volumes and alternative transportation (from trucks to rail freight) “Waste pyramid” prioritising different ways of reducing waste (from reduction) to landfill disposal 100% of coffee, tea, fish/seafood and palm oil sustainably sourced by 2020 Reduced water use since 2007 by 17% Completed “Cocoa Genome Project” in 2012 http://www.mars.com/global/about-mars/the-five-principles-of-mars + BIC Report August 2012

Mars ES Initiative: Key Targets to 2040

http://www.mars.com/global/about-mars/the-five-principles-of-mars +BIC Report August 2012

Pepsico Environmental Sustainability Initiatives “Positive water balance” – for every one litre used, one litre restored, replenished or saved (target reached in 2009) and now striving for “positive water impact”, especially in water-stress geographies By 2015 (with 2006 as the baseline), water use reduced by 20% and increase in efficient electricity use by 25% “ReCon” tool (for resource conservation) – an energy and water use mapping tool in their factories Factory in Arizona has more than 18,000 solar panels producing more than 10,000,000 KWhs of electric power annually (enough to power 860 homes) Pioneer in “water footprint” – working with NGOs, companies and academics on a robust methodology Reduction in fuel use by 50% by 2020 (against a 2008 baseline) Committed to buying 100% certified palm oil by 2015 Currently testing first 100% plant-based bottle (using corn husks, pine bark or orange peels) Global initiative called “PackTrackPlus” to track its product packaging footprint Recycling of used packaging – the “Dream Machine” (an “on-the-go” recycling point with a reward system (4000 already installed in the US) http://www.pepsico.com/Purpose/Environmental-Sustainability.html +BIC Report August 2012

Pepsico: ES Initiative - iCropâ&#x201E;˘ Smartphone App

http://www.pepsico.co.uk/assets/1363.mp4

Pepsico: Smartphone app helps potato farmers predict crop yield and save water i-cropâ&#x201E;˘ is a revolutionary crop management system, developed by PepsiCo UK in partnership with Cambridge University. This new web-based, 'precision farming' technology is designed to help farmers produce more by using less water. It does this by bringing together data drawn from soil moisture probes in the fields and the local weather station. Growers access the information online and can then make informed decisions about when to irrigate crops and how much water to use. This more precise approach to farming will reduce under- and over-watering as well as reducing carbon emissions by using less energy.

http://www.pepsico.com/Purpose/Environmental-Sustainability.html

Unilever Environmental Sustainability Initiatives Launched in 2010, the Sustainable Living Plan’s overarching goal: to double sales while reducing the company’s environmental footprint by 2020, by decoupling growth from environmental impact For the whole life cycle of products, sustainable sourcing of all agricultural raw materials by 2020 and GHG emissions, water and waste reduced by 50% by 2020 The Sustainable Living Plan has 3 pillars corresponding to 8 topics, each of them declined into a series of time-bound quantitative targets

Innovative introduction of the “Open Innovation Platform” and the “Sustainable Living Lab”, a 24-hour brainstorming session open to everyone and looking for innovative ideas on sustainability topics

http://www.unilever.com/sustainable-living/uslp/ + BIC Report August 2012

Unilever ES Initiative: Purchasing Renewable Algal Oil

On the road to reduce its environmental footprint, Unilever has agreed to buy nearly three million gallons of algae-derived oil from Solazyme for use in its personal care products. The deal will contribute greatly to the Company’s goal to use only sustainable agricultural raw materials by 2020. Unilever has turned to GreenPalm certificates, committing to source all of its palm oil sustainably this way by 2015. “This is the first oil that was jointly developed that’s going to a product sale,” Jonathan S. Wolfson, Solazyme’s CEO, told the New York Times. “We’ve laid out the path for years, and now we’re closing the first big loop about where a big chunk of this oil goes coming out of one of these plants.” Solazyme's renewable products can replace or enhance oils currently derived from petroleum, plants and animal fats—with commercialization efforts that will lend well to industries including chemicals and fuels, nutrition, and skin and personal care. http://www.unilever.com/sustainable-living/uslp/

Session 5 What NestlĂŠ is Doing for Environmental Sustainability

What NestlĂŠ is Doing for Environmental Sustainability India ELIMINATING FOOD WASTE & LONG-TERM WATER MANAGEMENT

For further information on this initiative, go to http://www.nestle.com/csv/environment/wasterecovery

What Nestlé is Doing for Environmental Sustainability France NESCAFÉ LIFE CYCLE ASSESSMENT COMMUNICATION TOOL The reason for change We continuously enhance the environmental information we provide to consumers about our products, based on scientific evidence. This increased transparency not only helps consumers decide what to purchase, but also enables them to reduce their environmental impact when preparing and using our products, including minimising energy and water use. In addition, in 2011, Nestlé France and Nestlé Waters participated in a national initiative, led by the French Ministry of Ecology and Sustainable Development and in compliance with the government’s Grenelle laws, to communicate with French consumers about greenhouse gas emissions, water and biodiversity, particularly in relation to products such as Vittel, Nescafé and Nespresso. Description of the Environmental Sustainability initiative The interactive Nescafé Life Cycle Assessment (LCA) Communication Tool in France invites consumers to click on the different stages of the Nescafé life cycle to learn about the level and nature of impacts at each product phase. Users can also look at greenhouse gas emissions, water use or biodiversity impacts across the full product life cycle. Results The results of the above initiative are available through the Proxiproduit mobile phone application. Nestlé France is actively promoting the pilot results of this initiative through internal communication, such as the Company intranet and employee emails, and consumer-facing channels, including websites and magazines. The project will continue to test and evaluate different methodologies for the environmental assessment of consumer goods along their life cycles, as well as various approaches to consumer communication to ensure that they have informative and accurate environmental information.

For further information on this initiative, go to http://www.nestle.com/csv/Environment/lifecycleapproach/Communicatingenvironmentalinformation

What Nestlé is Doing for Environmental Sustainability France IMPROVING THE ENVIRONMENTAL PERFORMANCE OF HERTA Herta is a leading brand in the French charcuterie market; 80% of French consumers buy our ham, frankfurters, lardons, dough bases and snacks. Over a million products are sold every day. The Herta commitment to quality includes ongoing nutrition and sustainability improvements. A product level life cycle assessment of ham revealed the highest environmental impact areas – agriculture and animal breeding, factory production, and packaging – and helped the team maintain or set improvement plans. For example:  As part of carefully selecting its suppliers, audits by external, independent professionals are done to verify standards. For each charcuterie product the Herta brand ensures its origin and responsible animal welfare practices.  New incentives encourage farmers to improve the environmental impact of their farming practices.  All Herta factories are certified against ISO 14 001:2004.  At Saint-Pol-sur-Ternoise, a wood boiler – supplied with sustainably managed grown wood – will reduce CO 2 emissions by 80%. Packaging optimisation has delivered improved environmental impact while maintaining product quality, safety and convenience, and minimising food waste. Specific achievements include:  20% reduction in pie pastry packaging 2010–2011.  2011, Herta became the first charcuterie brand in France to launch packaging containing recycled materials (60% of Le Bon Paris Ham and 100% of Tendre Noix Ham packs contained some recycled materials). The Le Bon Paris –25% de sel packs contained 20% recycled content equalling more than 25 million packs and 550 tonnes of recycled content. In 2012, efforts extended across 60 million packs.  Signed a partnership with Eco-Emballages to support more work on recyclable packaging. The ‘Herta s’engage’ website gives consumers a high level of transparency and engagement through vehicles such as videos and educational material (e.g. sticker book helping kids learn about nutrition and the environment). As a result of HERTA’s customer engagement and a multi-pronged approach to quality, the Herta brand is recognised as an industry leader in France.

For further information on this initiative, go to http://www.croquonslavie.fr/corner-marque/herta/engagements/engagements.aspx

What Nestlé is Doing for Environmental Sustainability Colombia SILVOPASTURAL SYSTEM – ONE INTEGRATED PASTURE SYSTEM The reason for change Caquetá is a poor region of Colombia near the Amazon basin, and Nestlé has had a relationship with the dairy community there for around 35 years. The Caquetá region has suffered from erosion. Soil erosion removes nutrients from soil affecting agricultural production. Description of the Environmental Sustainability initiative One of the measures to help the region includes the implementation of silvopastoral systems. “Silvopasture” is a system that enhances biodiversity and reduces soil erosion by combining pasture land with other trees and shrubs. This results in improved milk quality and quantity, and therefore greater profits. This type of agroforestry focuses on the production of livestock and tree products in one integrated pasture system. A cartography (the study and practise of making maps) of land catchments to be reforested was realised. The objective was an identification of the optimum areas where Alisos (species of tree) and Jacaranda (species of flowering plant) could be planted. Farmers are trained on silvopastoral dairy farming and attend different farmer training days where they receive technical assistance on nursery of plants, sowing methodologies and protection of plantlets. Results • Improvement on the management of the 234 acres involved, reducing erosion. • Increase of employment adding an average of 2 hires by farm. • Income of the farmers has risen by 38% on average. • Milk production per cow has increased from 4.8 litres to 6.2 litres per day, and from 1.8 to 7 litres per hectare. • The average number of cows per hectare has increased from 0.6 to 1.0 . • In 10 pilot farms, the average milk production per farm has increased from 180 litres per day to 249 litres per day, an increase of 38% .

Source: http://www.nestle.com/csv/creatingsharedvaluecasestudies/allcasestudies/silvopasture-dairy-farming-colombia

What Nestlé is Doing for Environmental Sustainability Switzerland HENNIEZ – ECO-BROYE PROJECT (PRESERVING WATER QUALITY) The reason for change Since acquiring the Henniez brand in 2007, Nestlé Waters’ ECO-Broye programme has fostered local partnerships to help preserve natural resources and maintain farmer income in this region of Switzerland. The initiatives, which will be extended by the stakeholders themselves, involve farmers establishing "ecological corridors" across 1500 hectares of farmland to preserve and stimulate local biodiversity; organic filtration in a tributary of the River Broye to improve surface water quality; and a biogas digester to turn organic farm waste into clean energy, to be controlled by Nestlé Waters. Description of the Environmental Sustainability initiative The project contains a roadmap with a five-step implementation plan. 1.A field assessment of land use systems in place within the defined 400 hectares to protect and identify, amongst others, the major threats in terms of ground water pollution. 2.A screening of different stakeholders (e.g. farmers) to elaborate a communication strategy of long term protection goals. 3.Engagement with stakeholders to test their willingness/ability to change for more sustainable land. 4.Experimentation and implementation of the new proposed practices and validation by external experts from Agronomy and Environmental Sciences. 5. Follow up of new implemented practices using suitable key performance indicators to measure improvements and sustainability.

PRESERVING NATURAL RESOURCES: Michel Marcuard, a Nestle Waters Water Resource Champion, carries out sampling at the filtration area serving the Nestle Waters plant in Henniez, Switzerland.

Results Between 2010-2030, the implementation plan will result in new farming practices, new initiatives aimed at facilitating local use of natural resources e.g. natural filtration. This initiative is a great example of respecting the full water cycle of the sources and sustainable management as an opportunity for local economic development. The results are based on our experience of France Agrivair (Nestlé Waters established the agricultural advisory firm Agrivair in 1992, based in Vittel, France to assist local farmers in "greening" their agricultural practices) and Creating Shared Value with local stakeholders. For further information on this initiative, contact Cedric Egger, Nestlé Waters

What NestlĂŠ is Doing for Environmental Sustainability Germany THE LIGHTHOUSE PROJECT: DC SINGEN AND DC WEIDING The reason for change In line with its strategic goals to use the most efficient technologies and apply best practices in order to further optimise energy and water consumption, minimise waste generation, utilise sustainably-managed renewable energy sources, recover value from by-products and control and eliminate emissions, including greenhouse gases the Maggi factory in Singen investigated warehouse energy improvements. The investigations resulted in the installation of photovoltaic panel technology as part of wider sustainable energy plans for both the Singen and Weiding distribution centres. Description of the Environmental Sustainability initiative Solar panel electricity systems, also known as solar photovoltaics (PV), capture the sun's energy using photovoltaic cells. These cells don't need direct sunlight to work â&#x20AC;&#x201C; they can still generate some electricity on a cloudy day. The cells convert the sunlight into electricity, which can be used to run household appliances and lighting. In 2011, photovoltaic panels, which generate electricity from solar energy, were installed on the roofs of the Singen (4020 panels) and Weiding (2970 panels) warehouses in Germany. Results At both sites, around 50% more energy was produced in 2012 than consumed onsite. In Singen, there is an energy sharing scheme, which captures excess heat energy. The energy captured is enough to produce 30 tonnes of steam an hour which is then used in the Maggi factory. At the cross docking station in Burstadt, one can see the biggest solar energy installation on one roof in the world. Recent plans relate to the improvement of thermal insulation, heat generation and lighting design, all of which will lead to further reductions in energy consumption.

For further information on this initiative, go to http://www.nestle.com/csv/Environment/transportdistribution/Keyinitiatives

What Nestlé is Doing for Environmental Sustainability USA PURINA – TOGETHER WE CAN The reason for change PURINA USA saw an opportunity to be the first pet food manufacturer to help educate pet owners on the benefits of can recycling and to strengthen its brand position as an environmentally and socially responsible leader. Given their size and leadership positions within the category, FANCY FEAST and FRISKIES wet cat food drove the project and launched the “Together We Can” campaign. As consumers, retailers and other stakeholders are increasingly looking to companies to improve their environmental impact FANCY FEAST and FRISKIES, two leading US brands in the wet cat food category with a value share of approximately 70% between them, were chosen to raise pet owners’ awareness of the benefits of aluminium can recycling and to contribute to increased can recycling levels. Description of the Environmental Sustainability initiative Packaging improvements were established and activated, under the ‘banner’ of Recycle. The packaging can be recycled, reused, composted or incinerated with energy recovery and Sustain. FANCY FEAST and FRISKIES joined forces to educate cat owners about the recyclability of cat food cans in a mission to help increase the total number of pet food cans recycled each year. In support of the effort, the brands created the "Together We Can" campaign to get cat owners involved. 100 artists/cat owners came together to create original pieces of art out of parts and components of cat food cans, recycling them for a new use. Select items were auctioned off to benefit Keep America Beautiful. Results • Nearly 90 million total impressions driven by over TV and radio placements and 68 online placements • $16 million in sales attributable to this effort • Strong retailer display support and positive program feedback • Over 100 recycled can artwork submissions • Achieved its 10,000 pledges* target early on with nearly 18,000 pledges received by the end of the campaign *”Pledge to make a difference and to recycle your cat food cans”.

For further information on this initiative, contact Mark Brodeur, Purina USA

What Nestlé is Doing for Environmental Sustainability United Kingdom RESPONSIBLE PRODUCTION: NESCAFÉ COMPACT REFILLS & ASSOCIATED INITIATIVES The reason for change In order to demonstrate their commitment to Responsible Production, Nestlé UK launched a new compact 150g NESCAFÉ refill pack. It still contains 150g of the same great tasting coffee from the previous NESCAFÉ refill and at the same time has an improved environmental impact and demonstrates the UK’s commitment to the NESCAFÉ® Plan. Description of the Environmental Sustainability initiative As this new refill is so compact and therefore takes up less space, we can fit twice as many of the new 150g refill packs onto a pallet than the previous ones. In order to improve our environmental impact within our production processes in the UK, reduction of energy consumption and waste is important. With regards to packaging, improvements to NESCAFÉ glass jars were reduced in weight and optimisation of design. Finally, preserving water and biodiversity were on the list of improvement initiatives. Results  The new refill means that we will need 50% fewer lorries to transport the same amount of coffee.  At two coffee factories, 20% of the sites’ energy needs are provided by using spent coffee grounds as fuel which reduces the need to use fossil fuels and also means the grounds no longer go to landfill. At the Dalston factory, where the NESCAFÉ Café Menu range is produced, the factory now sends zero waste to landfill by introducing waste segregation systems.  Our NESCAFÉ glass jars are recyclable. The lid can also be recycled through various local council locations.  By optimising its design, we have reduced the weight of our NESCAFÉ Original 100g glass jar, cutting annual glass consumption by approximately 470 tonnes.  To release clean water from the production of our NESCAFÉ Café Menu range at our Dalston factory, we invested £845,000 in an advanced treatment plant. The by-product from this process is recycled as fertiliser by local farmers.

For further information on this initiative, go to http://www.nescafe.co.uk/responsible_production_en_co_uk.axcms

What Nestlé is Doing for Environmental Sustainability United Kingdom BEYOND THE LABEL – NEW DIGITAL LABELLING SCHEME FOR CONSUMERS The reason for change Consumers everywhere are increasingly using mobile devices to research and make purchase decisions, and share their views. Consumers have high expectations for manufacturers to be transparent and make information easily available. As part of building trust in Nestlé corporate and product brands, Nestlé is expanding the use of the Nestlé Nutritional Compass to include a QR code to give consumers a gateway to useful, fact-based information “Beyond the Label”. Description of the Environmental Sustainability initiative Anyone who buys a multi-pack of two-finger Kit Kat chocolate bars in the UK and Ireland will be able to find out more about what they are made of, how they fit into a balanced diet and lifestyle, and how they were produced, just by scanning the packaging with a smartphone. The Kit Kat multi-packs will carry a Quick Response (QR) code that will take consumers to digital sites where they can find more detailed information about the product than would normally be available on a pack. Nestlé plans to roll out the QR codes across its product portfolio in both emerging and developed markets to help people make more informed choices about what to purchase or consume. A QR code is a type of barcode which consists of small black blocks arranged in a square pattern against a white background. When it is scanned with a smartphone it opens a mobile application or a website. Results Seven years ago Nestlé became the first company to introduce a ‘nutritional compass’ on its packaging, designed to be an informative guide to help consumers choose between products. The new QR code initiative is a natural extension of the company’s commitment to communicate the importance of responsible nutrition, moderation and variety in food habits. The majority of codes will appear on packs on a space within the Nestlé nutritional compass, which is already present on 97% of the company's products worldwide.

For further information on this initiative, go to http://www.nestle.com/media/newsandfeatures/global-qr-codes or if you have a smartphone, scan the QR code on this page.

What Nestlé is Doing for Environmental Sustainability Ivory Coast THE COCOA PLAN: IMPROVING COCOA QUALITY & YIELDS FOR IVORIAN FARMERS The reason for change The Cocoa Plan’s vision is to help to professionalise cocoa farming, so that cocoa farmers run profitable farms, respect the environment, have a good quality of life and their children benefit from education. The Cocoa Plan is Nestlé’s way of helping to tackle key issues facing cocoa farmers, their families and communities to create a better future for cocoa farming. Description of the Environmental Sustainability initiative The Cocoa Plan provides farmer training and assistance on more efficient, sustainable farming methods, such as the effective pruning of trees, fermentation and drying of beans. It also provides plant expertise - improving the quantity and quality of yields by providing 12 million stronger, more productive plantlets over the next 10 years. Nestlé Research and Development (R&D) Centre in Tours, France, works with the new R&D Centre in Abidjan, Côte d’Ivoire where more than 40% of the world’s cocoa originates, as well as other research institutes to produce large quantities of first- class cocoa plants that are stronger, less vulnerable to disease and potentially yield twice or even more than average trees in cocoa farms today. Results The R&D Centre in Abidjan will provide farmers with 1 million high-potential cocoa trees each year from 2012. The Centre’s programmes will focus on improving the quality and quantity of locally sourced raw materials, developing products that meet the nutritional needs and tastes of West African consumers, and helping to increase both agricultural productivity and food safety. We are also training plant scientists in accelerated propagation techniques in other cocoa-producing countries. Over the past 15 years, Nestlé has provided 17 million coffee and cocoa tree plantlets to producer countries, and over the next decade, we will provide at least 38 million more. These develop into high-yield, disease-tolerant trees providing farmers with a foundation for increased farm productivity and potential income. Studies show Nestlé-produced trees can achieve an increase in productivity of 50%–200%.

For further information on this initiative, contact Darrell High, Cocoa Manager, Confectionery SBU or Kamrigne Laossi, Research Specialist, Research & Development

What Nestlé is Doing for Environmental Sustainability Nicaragua CATIE PROJECT – BIODIGESTOR SYSTEMS The reason for change Nestlé’s Agriculture and Cattle farming services in Matagalpa factory in Nicaragua is engaged with the agricultural research institute CATIE to test two new biodigestor systems. A biodigestor is a anaerobic (oxygen free) tank which digest organic material biologically. It produces methane which can be used a s a source of energy. These systems have been tested in two small farms. The benefits of such a solution are improvements manure management, production of energy for the household through biogas and production of organic fertilizer. Description of the Environmental Sustainability initiative The use of a biodigestor allows making the most of organic waste and reducing damages due to greenhouse gases such as methane and carbon dioxide which play a role in climate change. This environmental initiative is promoted to all 600 farmers supplying fresh milk to the Matagalpa factory. Suppliers have reduced their energy costs and usage of chemical fertilizers, avoiding methane gas emissions to go into the atmosphere. Also there are additional benefits to the community as insects and plagues originated by the manure are controlled. Results The two farms are regularly used for field days and training in order to promote the roll out of this new technology. Within these field days, Nestlé is promoting clean energy production and uses also these opportunities to facilitate exchanges and visits between producers. The biodegestors have also resulted in: •Reduction of flies and reduction of foul smell •Substitution of wood to biogas thus avoiding deforestation As a step forward, Nestlé will support the project to implement biodigestors to 30 milk producers and to continuously promote the utilisation of these biodigestors among the milk farmers supplying Matagalpa factory.

For further information on this initiative, contact William Haar, Head of Agricultural Services

What Nestlé is Doing for Environmental Sustainability Guatemala WATER EFFICIENCY DURING COFFEE POST-HARVESTING The reason for change Over the last six years, we have worked with the Rainforest Alliance to develop the Nespresso AAA Sustainable Quality™ Program of integrated coffee farm management practices. The farmers who join the programme are encouraged to adopt best practice in sustainability: to care about the environment, to protect water sources and to prevent soil erosion from their land. Through its AAA Sustainable Quality™ Program Nespresso is working to protect coffee ecosystems by promoting sustainable agricultural best practices in ecosystem conservation, wildlife protection and water conservation. For example, the Nespresso AAA Sustainable Quality™ Coffee Program helps farmers find the right balance in managing water, soil and biodiversity while increasing productivity and coffee quality. Description of the Environmental Sustainability initiative As part of AAA Sustainable Quality™ Program and in order to optimise water usage in coffee processing, Nestlé R&D Tours and Nespresso, decided to start an initiative aimed at evaluating the effect of water volume reduction during Arabica coffee post harvesting on cup quality. The objectives of this study was to evaluate potential water savings in different wet processing methods and determining their impact on cup quality. Two coffee growing areas of Guatemala were selected. The project extended on a two year period (2010-2011) during which measurements on the quantity and quality of water used at different stages of wet processing were made. Results The study generated 3 types of coffee qualities (high, medium and low) using the parameters of taste, smell and sight associated to the different process alternatives (mainly duration and mode of fermentation). The results indicated that: • Some processing treatments significantly reduce the volume of clean water consumed • Under good management practices, clean water volume reduction is not affecting the cup quality. There is even a trend to better cup quality when re-circulated water is used.

For further information on this initiative, contact Pierre Broun, Head of R&D Tours, France

What Nestlé is Doing for Environmental Sustainability Panama BENEFITS OF CHANGING IRRIGATION SYSTEMS IN TOMATO PRODUCTION IN THE DRY ARCH OF PANAMA (SAIN) The reason for change With a crop cycle that requires 100 days of irrigation, water runoff can lead to soil erosion. For more than 50 years, the industrial tomato producers of Nestlé in the Province of Los Santos (Peninsula de Azuero) used gravity irrigation to water their lands. This is a system that uses approximately 150 cubic metres of water per hectare for every day of irrigation. This province is known for having long and dry summers. Description of the Environmental Sustainability initiative The introduction of the drip irrigation systems has increased crop yield and quality while at the same time reducing costs from water, energy, labour, chemical inputs and water runoff. They improve the plants by delivering water and nutrients directly to the plant roots. This avoids unnecessary wetting of plant leaves. With the drip irrigation system, growers are able to introduce innovative productivity schemes in order to optimise the utilisation of natural resources such as water. This also reduces the impact of ploughing, preserving the environment and increasing their yearly income using the same land but with better environmental farming practices. Results • The change to drip irrigation came from each producer individually and started gradually since 2000. Since 2008, 99% of Nestlé tomato suppliers have implemented drip irrigation. • The use of drip irrigation has achieved big water savings from 150 cubic metres/hectare/day to 47 cubic metres/hectare/day. • The savings signify a reduction in the total use of water (for all producers) of 2.8 million cubic metres of water every year. • Tomato yield has increased from 30 to 38 tonnes per hectare increasing the producer’s return on investment.

For further information on this initiative, contact Aurelio Lamboglia, Nestlé Panama

What Nestlé is Doing for Environmental Sustainability Mexico RENEWABLE ENERGY – WIND POWER & SOLAR POWER The reason for change We aim to use the most efficient technologies and apply best practices in order to further optimise energy and water consumption, minimise waste generation, utilise sustainably-managed renewable energy sources, recover value from by-products and control and eliminate emissions, including greenhouse gases. In 2009 the Mexican government decided to promote the generation of electricity using renewable energy investment allowing private companies to take advantage of the strong wind of the “Itsmo de Tehuantepec” in Mexico and facilitate the use of the distribution network of national power to transport and deliver this energy to companies that hire this service. Description of the Environmental Sustainability initiative Following a power purchase agreement with Mexican wind-turbine company CISA-GAMESA, 85% of the total electricity consumed by our factories in Mexico is now supplied by wind power. Results We estimate that this will reduce air emissions, including greenhouse gases, by more than 124,000 tonnes of CO2 equivalent annually. This is equivalent to taking 39,000 small cars off the road annually. Nestlé is the first food company in Mexico to obtain nearly all the electrical energy needed for its manufacturing operations from a renewable source.

For further information on this initiative, contact Miguel Mendoza, Technical Director, Nestlé Mexico

What Nestlé is Doing for Environmental Sustainability Mexico

ACHIEVING A ZERO FRESH WATER CONSUMPTION FACTORY The reason for change Lagos de Moreno factory is located in an area of water scarcity and it is projected that the water scarcity will worsen over time. Moreover, the available water from natural sources contains high levels of Fluorides which are out of the limits of the Mexican Regulations. The factory’s water consumption in 2011 was 686.000m³, ranking it the 58th water consumer amongst all Nestlé factories.

Description of the Environmental Sustainability initiative Lagos de Moreno Dairy Factory receives approximately 1’200m³ of fresh milk per day, where most of it is converted into powder milk (Nido and GUM’s systems). Approximately 73% of the total volume of the fresh milk is water, which is removed in the evaporators during the conversion process. The purpose of this project is to to transform a Milk Powder Factory into a factory that does not consume any freshwater during normal production periods.

Image of the building that will house the equipment to treat the water removed from the fresh milk

The total cost of the project is estimated at CHF 8.6 million. This project will decrease the factory’s dependence on ground water, it will alleviate some of the drain on the local resources and it will improve the water availability in the community, showing our commitment to water conservation in a water-scarce area and providing security against future water shortages in the area. The project will save an estimated 546,000 cubic metres of water, the equivalent of more than 200 Olympic swimming pools of water, by the end of 2014. Results This objective will be achieved through 2 different phases:  Phase 1 Cow Water Treatment – Conversion of the water removed during the fresh milk evaporation process (cow water) into potable water. This water can be used in all of the factory processes that require potable water. This phase along with various saving initiatives to be implemented in the Factory during 2012 and 2013, will give an expected annual water savings of 546,000m³.  Phase 2 Waste Water Treatment Plant Upgrade – Filtration of waste water for use in areas with low water quality requirements (i.e. cooling towers or gardening). This phase will give an expected annual water savings of 140,000 m³.

For further information on this initiative, contact Mayra Lopez, MEXICO

What Nestlé is Doing for Environmental Sustainability South Africa DRIVING RESOURCE CONSERVATION AND SAVING PRECIOUS WATER The reason for change Towards the end of 2010, the Western Cape region experienced its worst drought in 132 years. In the Mossel Bay area the level of the local dam (Wolvedans Dam) dropped to 20% at the height of the drought in November 2010. In response Nestlé introduced a multi-pronged approach which included engineering interventions and awareness campaigns. The programme, which will run until 2015, is part of our work with organisations including the South African Government, the Water Resources Group (WRG) and several multi-national companies to help close the water gap by 2030, ensuring the availability of water in the future. Description of the Environmental Sustainability initiative At its Mossel Bay factory, Nestlé produces milk powders and canned liquid milk products for which, in 2009, the average monthly water consumption at the factory was approximately 23,700 kilolitres, which is equivalent to 14.8 kilolitres of water consumed per ton of product produced. Nestlé, responding to the drought and need for enhanced water conservation, accelerated water use reduction projects and initiatives at the Mossel Bay factory. Results The water saving project at the Nestlé factory, reduced its water consumption by approximately 50% in 2010 compared to 2009 values. The reduced water usage at the factory has meant more water is available for Mossel Bay, and generally reduced water withdrawal from the Wolvedans Dam. Nestlé is continuing its drive to conserve water in its factory by employing further water-saving plans as follows: • Phase II (2011–2012): Engaging milk farmers that supply Nestlé (particularly those in the Wolvedans catchment) to optimise the use of water in dairy farming through sustainable agriculture initiatives • Phase III (2012–2015): Engineering interventions to make the factory a zero-water intake factory. Expected savings to be about 15-20%, which will also result in 15% electricity savings.

For further information on this initiative, contact Hoven Meyer, Regional Agriculturist

What Nestlé is Doing for Environmental Sustainability Malaysia PROJECT RiLEAF The reason for change The Kinabatangan is the longest river in Sabah flowing from East to West. It has been the site of tremendous landscape change, from large scale logging in the 1960’s to the heart of oil palm production from the 1980’s onwards. As a result of its mega-biodiversity, it has also become the focal point for conservation interests. Project RiLeaf is a reforestation initiative by Nestlé to create a landscape where people, nature and agriculture (oil palm), are united by their common source of vitality - water - and to demonstrate that mutual co-existence is possible for all stakeholders. Description of the Environmental Sustainability initiative The primary focus of Project RiLeaf was on the reforestation of the Lower Kinabatangan area. Operations are strung along a 110km zone of the area, aiming to achieve forest connectivity, as well as minimise water pollution, and that the river has a better chance to repair itself. Reforestation is done by actively involving local community within the area to supply forest tree seedlings and provide services for their plantings as well, and actual works have already started since mid-2011. RiLeaf’s objective was to plant more than 100,000 forest seedlings over the next 12 months. Results While it is too early to gauge the improvements to the ecosystem, the local community has seen immediate benefits, earning $67,000 through the production and replanting of the seedlings since the start of the project. The number of trees planted up to September 2012 amounted to 100,000. Project RiLeaf seeks to reduce the environmental impact of oil palm plantings through minimisation of chemical fertilizers by using good agricultural practices, and involves technical trials and piloting field test plots focusing on good agricultural practice.

For further information on this initiative, visit http://www.nestle.com/csv/CreatingSharedValueCaseStudies/AllCaseStudies/Pages/Malaysia-Project-RiLeaf.aspx

What Nestlé is Doing for Environmental Sustainability Spain NESTLÉ FACTORY REDUCES WATER USE BY ALMOST TWO-THIRDS IN LESS THAN 12 MONTHS The reason for change At the beginning of last year, Nestlé’s factory in La Penilla, which makes chocolate, confectionery, milk and infant formula, was using 72 cubic metres of water per tonne of product. At the beginning, it was challenging to change the habits of the operators, who were used to working in a specific way,” explained Ramon Montserrat, Head of Engineering and Packaging Services for the Iberian Region. We convinced them by explaining the project and why we care about saving water.”

Description of the Environmental Sustainability initiative A team of engineers, environmental sustainability experts and the factory manager at La Penilla helped to analyse how the site could reduce its water usage. The amount of water flowing through the condensers of the milk evaporators, for example, was regulated in a more efficient way to achieve the required vacuum on the equipment. The factory also installed three new cooling towers with a more efficient closed refrigeration loop system, which recycles water, leading to an additional 25% less water being used in the first half of 2013. The factory also installed three new cooling towers with a more efficient closed refrigeration loop system, which recycles water, leading to an additional 25% less water being used in the first half of 2013. Results Now, after introducing changes such as a water efficiency programme, and investing one million euros (CHF 1.2 million) it has reduced this by 60% without increasing energy consumption or greenhouse gas emissions. These modifications has led to a reduction of more than 1,000,000 cubic metres of water per year, the equivalent of 400 Olympic swimming pools. The amount of water that the factory needs to operate, and therefore the amount of water withdrawn from the nearby River Pisueña, is now significantly lower. The increased water efficiency has also made business sense by reducing water costs.“

For further information on this initiative, contact Rina Lopez, Spain

What Nestlé is Doing for Environmental Sustainability Chile

NESTLÉ JOINS RECYCLING NETWORK TO COMBAT WASTE The reason for change Nestlé, Walmart Chile, Coca-Cola Chile, PepsiCo, and Unilever have signed a partnership to reduce waste and support a new recycling network in Chile. The companies have backed the Collective Recycling Project, which aims to recycle about 1,200 metric tons of waste per year through the installation of five recycling centres in the capital of Santiago.

Description of the Environmental Sustainability initiative The centres, managed by Triciclos, an organization that specializes in recycling and sustainable consumption, can each recycle about 20 different types of materials such as glass, PET plastic, aluminium, paper, cardboard and clothes. In turn, the companies will receive energy recovery data on each type of waste. Triciclos are providing consumers with an easy and efficient way to recycle their household waste. Each centre can recycle about 20 different types of materials such as glass, PET plastic, aluminium, paper, cardboard and clothes - avoiding further waste to landfill. In turn, companies will be provided with useful energy recovery data on each type of waste. Anticipated Results Nestlé can use this information to redesign its product packaging to reduce waste and improve the environmental performance of its products. The company’s latest environmental sustainability pledge is part of its commitment to eliminate waste at every level of its operations.

What Nestlé is Doing for Environmental Sustainability United Kingdom

NESTLÉ PLANTS WILDFLOWER MEADOWS TO PROMOTE BIODIVERSITY The reason for change Nestlé has pledged to plant wildflower meadows within the grounds of all its factories in the United Kingdom by 2015 to encourage the development of natural habitats while creating more green space for local communities. The company expects the new meadows at its 13 sites across the country to attract a variety of wildlife, including different species of butterflies - numbers of which are currently in decline in the UK . Nestlé is also working with a group of dairy farmers who supply its factory in Girvan, Scotland, to plant wildflowers on their land. This will bring the total area of meadows that will be created by the project to 75 acres, equivalent to about 250 football pitches.

Description of the Environmental Sustainability initiative Nestlé employees, their families and local schools have begun planting meadows with experts from local branches of Natural England, the Wildlife Trust and Butterfly Conservation. There are now already meadows at five Nestlé factories in the UK: in Girvan, Scotland; Fawdon, Northumberland; Buxton, Derbyshire; Tutbury, South Derbyshire; and Dalston, Cumbria. Nestlé has also developed a soon to be launched new mobile app that employees can use to record butterfly sightings. Data from the app will be made available to local nature and wildlife organisations, to support the monitoring of butterfly numbers across the UK. Anticipated Results “Pollinators such as butterflies, bees and birds are integral to the food supply chain,” said Inder Poonaji, Head of Environmental Sustainability at Nestlé UK . “By helping to restore natural habitats in this way we hope to see an increase in local biodiversity. “Our long-term goal is to work with more organisations, businesses and other stakeholders across our supply chain to make this a national project.” Nestlé’s wildflower meadow project is just one example of its global commitment to developing its business in a way that safeguards natural resources, biodiversity and ecosystem services.

For further information on this initiative, contact Iner Poonaji, Head of Environmental Sustainability, Nestlé UK

What Nestlé is Doing for Environmental Sustainability United Kingdom

ACHIEVING ZERO WASTE TO LANDFILL The reason for change Our ambition is to continually reduce the environmental impact of our products, and driving down waste is one way we are working towards this goal. In the UK, our goal is to achieve zero waste to landfill from each of our factories by 2015 and the full recovery of unavoidable byproducts.

Description of the Environmental Sustainability initiative

By the end of 2012, half of our 14 UK factories had been externally verified as sending zero waste to landfill, starting with Girvan, in Scotland, and Dalston, in Cumbria, which both achieved this status in 2010, five years ahead of target. In other factories, waste has already been significantly reduced, bringing with it reductions in energy consumption and transportation requirements. At our Tutbury factory, the zero waste approach includes dedicating an area to each of the factory’s 16 waste streams so that the materials can be carefully observed and segregated. As well as training and engaging employees and contractors in the waste strategy, we have invested in balers to compact materials and therefore reduce the transport footprint. At our Fawdon factory, near Newcastle, new techniques and innovations are tested before being implemented elsewhere. We piloted an on-site anaerobic digestion system, which turns liquid and solid waste into energy and we plan to have a full size digester installed in 2013. This will enable us to make better use of waste, reduce what we discharge to the sewer and cut the factory’s electricity consumption by 8.9%, resulting in a 3% reduction in total energy. In 2011, we donated 1,095,200 meals worth of food to FareShare, from our surplus, which the charity then redistributed to homeless, disadvantaged or vulnerable people across the UK. In the process, this saved 460 tonnes of fit-for-consumption food going to landfill.

Actual and Anticipated Results  We are now taking fewer resources and energy from nature, protecting the environment  Less waste, means a cleaner environment for everyone  Donating fit-for-consumption food to FareShare from our surplus helps feed to homeless, disadvantaged and vulnerable people across the UK  In reducing our waste we have improved efficiency and lowered costs  All staff have been trained in our waste strategy – skills that will bring business benefits for many years to come  Using recovered materials has helped lower costs, as well as reducing our resource and energy consumption  Our goal is to achieve zero waste to landfill from each of our factories by 2015 and the full recovery of unavoidable by-products in the UK.

For further information on this initiative, contact Iner Poonaji, Head of Environmental Sustainability, Nestlé UK

What Nestlé is Doing for Environmental Sustainability United States

NESTLÉ’S PIZZA DIVISION IN WISCONSIN REDUCES WATER USAGE AND COSTS WITH GE’S ADVANCED WATER TREATMENT TECHNOLOGY The reason for change Industrial cooling water must meet tight specifications, but Little Chute’s city water is challenging because of its hardness and alkalinity. Standard chemical treatments were unable to treat it adequately because high concentrations produced scaling in the cooling towers, which decreased cooling efficiency and required additional maintenance. Also, an older control system made consistent control of the cooling operation difficult, and it couldn’t be integrated with plant data systems. Nestlé USA’s Pizza Division factory in Little Chute, Wisconsin produces some of the best-selling frozen pizza brands in the U.S. It also produces outstanding results when it comes to water efficiency and related operational savings. The factory has reduced its water usage by 7.4 million gallons per year by increasing the performance and efficiency of its cooling towers with help from General Electric’s advanced water-treatment chemical technology.

Description of the Environmental Sustainability initiative As a result of these improvements, the facility has earned GE’s Return on Environment Award. The award recognizes a company for significantly surpassing and improving environmental and operational goals while balancing industrial demands. GE provided its advanced GenGard water-treatment chemistry with stress tolerant polymer (STP) and state-of-the-art TrueSense controls for the plant’s four main ammonia condensers. These products provide precise control of cooling water and enable more cycles where the water-treatment chemicals are in the high concentrations needed for optimum results.

Actual and Anticipated Results As a result, the cooling water at Little Chute is reused to a much greater degree than before, saving 7.4 million gallons of water and reducing sewer discharges by the same amount. This translates into nearly $50,000 in cost savings from avoided water purchase costs and discharge fees. “One of our sustainability goals here at Nestlé is to continuously improve water efficiency across our operations and reduce water withdrawals,” said Louis Miller, utilities supervisor at Nestlé Pizza Division Little Chute. “Improving the efficiency of the cooling towers is a big step towards achieving that goal.” Nestlé USA’s commitment shows that, increasingly, what’s good for the environment also can be good for business. They’ve proven that being environmentally conscious can improve operating efficiency, conserve scarce natural resources and lead to improved capacity and healthier profit margins. Nestlé’s leadership has set an example for others to aspire to and follow.

Continual improvement of the environmental performance of our activities

+52.8%

-5.8% -21.3% -23.6% -28.6% -44.9%

Continual improvement of the environmental performance of our activities

From 2002 to 2012 per tonne of manufactured product Water withdrawal:

-53%

Water discharges:

-64%

Energy consumption:

-38%

Direct greenhouse gases:

-50%

From 1991 to 2012 Packaging material

-593,000 tonnes 57

Food Waste

Waste across the food value chain • Developing world: 630 million Tonnes 40% in post-harvest & processing • Developed world: 670 million Tonnes 40% in retail & by consumer Minimise Food Loss

•Yields •Variety •Damage •Spoilage resistance

•Production •Yields

•Damage •Spoilage •Shelf life

•Portions •Portions •Methods •Versatility •Yields •Re-value •Bioavailability

Limits to Resources Optimise Resources

•Water •Agriproducts •Methods •Transport

•Water •Energy •Technolog y

• Packaging •Distance •Density material • Kg/kg •Weight

•Energy •Water

•Re-use •Re-value •Recycle

Avoiding food wastage provides a tremendous opportunity across the value chain 252 US billion of potential savings Increase resource productivity Savings in water, energy, land, and avoidance of GHG emissions. Reducing food waste at later stages of the chain can save 3 time energy of cutting waste at post-harvesting stage. McKinsey: Resource Revolution: Meeting the world’s energy, materials, food, and water needs (2011)

NestlĂŠ is avoiding food waste along the food chain R&D

Shelf stable products

Appropriate Packaging: prevents spoilage, breakage, contamination R&D Programme contributing to 0 waste.

Agriculture & Postharvest

Provision of cooling systems in India

Food waste in Responsible Sourcing Guidelines (soy and sugar)

Manufacture & Distribution

Improved manufacturing practices result in food waste reduction

NCE Zero Waste Approach

Portion size Guideline Bad goods reduction Programme

Capacity Planning Programme to better manage inventories

2013 Project looking into waste up-stream supply chain, storage and farming. 22 factories with zero waste to landfill or incineration

Consumer

Improve Demand Planning

Pets for People & Fare Share donation programmes

Project Zeus helped reduce food waste in hospitals

Nido scoop and detailed preparation instructions. It provides advice about storage, so as not to waste any.

Environmental Sustainability at the Centreâ&#x20AC;&#x2122; initiative

Offering consumers the right portion sizes, preparation guidelines and storage guidance We help consumers manage their food shopping by offering them the right portion sizes for their needs. We provide preparation instructions on our packaging, which is crucial to prevent food wastage, and via websites such as 'Maggi Kochstudio' in Germany.

Running specific campaigns to encourage employees to reduce food waste in canteens At our headquarters in Switzerland we succeeded in reducing food waste by one third in six months by encouraging employees to take an appropriate portion of food from the self-service buffet and by allowing them to buy leftovers and take them home.

Session 5 Innovation & Creativity

Disney Creativity & Innovation Strategy “Dream, believe, dare, do!” CRITIC Identifies any potential barriers and/or challenges

Critic

Questions whether everything has been thought of.

Dreamer

DREAMER Maximises creativity

Realist

REALIST Organises ideas, reflects and applies

Session 6 Communicating in an Environmental Way

Glossary of Common Environmental Terms Term: Definition: Guidance:

Carbon footprint of a product Sum of greenhouse gas emissions and removals in a product system, expressed as CO2 equivalent and based on a life cycle assessment Nestlé uses the term “carbon footprint” when referring to the name of the International Standard ISO 14067 Carbon footprint of products. For other uses, Nestlé speaks about greenhouse gas (GHG) emissions; (carbon dioxide is one gas of many GHG gases). Nestlé is not in favour of carbon footprint/GHG emissions data on-pack or elsewhere as the sole environmental indicator. We perform assessment and communication of multiple environmental impacts (see Nestlé Position Statement on environmental labelling and GI-14.044-1 for LCA (Life Cycle Assessment methodology). Focussing on a single environmental indicator may be misleading if other significant impacts (e.g. freshwater consumption) are neglected. Term: Definition: sequestered, Guidance: e.g. Term: Definition: Guidance:

Carbon neutral The status of having a zero net carbon footprint by balancing carbon dioxide equivalent (CO2e) emissions with an equivalent amount avoided or offset. This term can be vague and inconsistently used. An unqualified carbon neutral claim shall not be made. Substantiation must be provided. Also no product claim / statement should be made based on a single environmental indicator as it can be misleading - especially if other significant impacts (e.g. freshwater consumption) are neglected. “we use coffee grounds in our factories as a carbon neutral energy source.” Eco Abbreviation for ecological or “connected with the environment” and often used to infer an environmental benefit, e.g. eco-pack, eco-friendly, ecokettle. This term is also used for economic benefit. See Brands and Creating Shared Value Communications Standard for guidance on its application. Check with local guidance body (e.g. France : Autorité de Régulation Professionnelle de la Publicité (ARPP).

Term: Definition:

Environmental claim Statement, symbol or graphic that indicates an environmental aspect of a product, a component or packaging. Note: An environmental claim may be made on product or packaging labels, through product literature, technical bulletins, advertising, publicity, telemarketing, as well as through digital or electronic media such as the Internet. Guidance: Key requirements for any claim or statement: clarity of scope (do not use broad, generalised, overstated claims), provide substantiation, use language consumers can understand and do not use misleading visuals suggesting greater environmental benefit or 3rd party endorsement where none exists. See Nestlé Brands & CSV Communication Standard for details and use environmental and social claim approval form.

Source: Nestlé Sustainability Glossary and Usage Guidance.

Glossary of Common Environmental Terms Term: Environmental footprint Definition: A loosely defined term to describe “the effect that a person, company, activity, etc. has on the environment, for example the amount of natural resources that they use and the amount of harmful gases that they produce. The status of having a zero net carbon footprint by balancing carbon dioxide equivalent (CO2e) emissions with an equivalent amount sequestered, avoided or offset. This term can be vague and inconsistently used. Guidance: In reporting and external communication, Nestlé refers more formally to environmental impact or environmental performance of the company or a product. Term: Definition: products. Guidance: increasing

Environmental impact Any change to the environment, whether adverse or beneficial, wholly or partially resulting from an organisation’s environmental activities or “Impact” can be both positive or negative. We improve our environmental impact by reducing adverse impacts (e.g. water pollution) and beneficial impacts (e.g. reforestation).

Term: Environmentally friendly Definition: A colloquial term that infers that the product or process is “not harmful to the environment”. Guidance: Do not use in product-related environmental claims or statements. ISO 14021:1999 Standard on environment labelling (and most national voluntary standards such as USA FTC Green Guides) views phrases such as “environmentally-friendly”, “environmentally safe”, “environmentally sound”, “environmentally responsible, “earth friendly”, “green” and “nature’s friend” as vague and not easily defined. An alternative is to indicate “improved environmental impact/performance” supported with substantiation. Term: Definition:

Environmentally sustainable State in which current needs can be met without compromising the environmental resources available for future generations to meet their future needs. Guidance: Self-declared, unqualified product claims of achieving sustainability (e.g. “this product is environmentally sustainable”) shall not be made. Additionally, many consumers are unfamiliar with the term sustainable; use with caution. Any comparison (e.g. “our new packaging is more environmentally sustainable than the previous version”) requires evidence of the total environmental benefit. If stated as part of an ambition, commitment or objective (e.g. “we are working to make our packaging more environmentally sustainable”) provide specific improvement actions. Refer to the Nestlé Policy on Environmental Sustainability

Source: Nestlé Sustainability Glossary and Usage Guidance.

Glossary of Common Environmental Terms Term: Green Definition: Shorthand colloquial language to infer that a product or process has improved environmental impact. Guidance: Do not use in product-related environmental claims or statements. ISO 14021:1999 Standard on environment labelling (and most national voluntary standards such as USA FTC Green Guides) views phrases such as “environmentally friendly”, “environmentally safe”, “environmentally sound”, “environmentally responsible, “earth friendly”, “green” and “nature’s friend” as vague and not easily defined. For example, rather than say “green packaging”, say “improved packaging” or “optimised packaging with improved environmental impact” - supported with substantiation. Use when citing names such as “UNEP Green Economy” or “United States Green Building Council.” Term: Greenhouse Gas (GHG) Definition: Gaseous constituent of the atmosphere, both natural and anthropogenic, that absorbs and emits radiation at specific wavelengths within the spectrum of infrared radiation emitted by the Earth’s surface, the atmosphere, and clouds. Note: GHGs include, among others, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydro fluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). Guidance: Nestlé use the term greenhouse gas (GHG) emissions versus generalised references to carbon, carbon footprint or climate change. Term: Greenwashing Definition: The deceptive use of environmental marketing in order to promote a misleading perception that a company's policies or products are more environmentally sustainable than they actually are. Guidance: See Nestlé Brands & CSV Communication Standard for guidance on claims and how to guard against greenwashing. Use Nestlé environmental and social claim approval form. Term: Sustainable agriculture Definition: A productive, competitive and efficient way to produce agricultural products, while at the same time protecting and improving the natural environment and social/economic conditions of local communities. Guidance: Also see sustainable noting not to make any self-declared product claims of achieving sustainability, e.g. “this product is made with sustainable agriculture”. Can be used when referring to organisations or initiatives e.g. “Nestlé SAIN Sustainable Agriculture Initiative at Nestlé”, SAI Sustainable Agriculture Initiative Platform.

Source: Nestlé Sustainability Glossary and Usage Guidance.

Glossary of Common Environmental Terms Term: Definition:

Packaging optimisation Process for the achievement of a minimum adequate weight or volume (source reduction) for meeting the necessary requirements, of primary or secondary or transport packaging, when performance and user/consumer acceptability remain unchanged or adequate, thereby reducing the impact on the environment. Guidance: Efforts and reference to “packaging optimisation” is preferred to “packaging reduction” in communication. This is because beyond a certain optimum level, packaging reduction can actually contribute to greater food waste which has its own adverse environmental impact. Term: Sustainability/sustainable Definition: The concepts involved in sustainability are highly complex and still under study. At this time there are no definitive methods for measuring sustainability or confirming its accomplishment. Guidance: Self-declared product claims of achieving “sustainability” or of a product being “sustainable” shall not be made (e.g. “this is a sustainable product”). Additionally, many consumers are unfamiliar with the term sustainable; use with caution. Any comparative reference, (e.g. “our new product is more sustainable than the previous version”) requires evidence of improvements covering the full scope of sustainability. If used as part of a product ambition, commitment or objective (e.g. “we are working to make our product sustainable”) provide specific improvement actions. Can be used when referring to third party verified schemes or used in their approved trademarks (e.g. RSPO - Roundtable on Sustainable Palm Oil; MSC Marine Stewardship Council “From an MSC certified sustainable fishery”).

Source: Nestlé Sustainability Glossary and Usage Guidance.

What Walmart Communicates To design and develop a â&#x20AC;&#x153;Sustainable Indexâ&#x20AC;? for consumer products

Consumer Communication Walmart Sustainability Index Identify leaders and laggards Highlight opportunities Set goals, track progress

Communication Standards & Ways of Communicating in terms of ES Nestlé is committed to helping consumers and other stakeholders make informed decisions about our company and our products. This includes commitment to open, transparent, easy-to-access and easy-to-understand information, which is directly tied to our ability to earn the TRUST of all stakeholders. And as consumers, customers, NGOs, media, suppliers and employees show more and more interest to learn about Nestlé Creating Shared Value (CSV) and sustainability actions, it has created the positive opportunity to communicate more about these efforts at corporate, product and market level. With communication comes responsibility to understand and use terms properly. This can be particularly challenging when many terms related to sustainable development (environmental, economic and social) are new, complex or evolving. To help Nestlé brand builders and communicators, we have created a Glossary as a quick reference tool to: Enhance understanding of key terms Support appropriate and consistent use of terms Avoid the use of colloquial terms which can be vague or misleading Facilitates our communication and commitment of the Nestlé Policy on Environmental Sustainability

Environmental Claims Approval Process

How NestlĂŠ Communicates to Consumers

NestlĂŠ empowers consumers with new digital labelling scheme Consumers in the United Kingdom will be the first to benefit from a new global initiative by NestlĂŠ to give people instant access to information about the nutritional profile and environmental and social impacts of its products. Anyone who buys a multi-pack of two-finger Kit Kat chocolate bars in the UK and Ireland will be able to find out more about what they are made of, how they fit into a balanced diet and lifestyle, and how they were produced, just by scanning the packaging with a smartphone. They will also be able to access facts about its impacts, such as how much water or energy is used in its entire life cycle.

NestlĂŠ launched the worldâ&#x20AC;&#x2122;s first free mobile application for iPhone and Android devices for customer recycling

The 123 Recycle application for iPhone and Android devices is the first of its kind to help people recycle waste packaging correctly. 80

Session 7 NestlĂŠ Tools to support Environmental Sustainability

Nestlé Tools across the Value Chain

LCA Communication Tool Beyond The Label Sustainability Category Profiles (SCPs)

Life Cycle Assessment (LCA) Ecodesign tool (EcodEX)

ISO14001:2004

Response Inducing Sustainability Evaluation (RISE)

Telematics

NEMS

Packaging Impact Quick Evaluation Tool (PIQET)

*This is not an exhaustive list of tools.

Sustainable Agricultural Initiatives Nestlé (SAIN)

Responsible Sourcing Guidelines (RSGs)

Water Resource Review (WRR) Energy Target Setting (ETS)

NestlĂŠ Tools that Support Environmental Sustainability: Research & Development Life Cycle Assessment (LCA) OBJECTIVE To better understand and to optimise the environmental performance of our products, we apply a life cycle approach, systematically assessing our product categories along the whole value chain through the use of Life Cycle Assessments (LCAs). In order to identify possible trade-offs between different impact categories, for instance, reducing greenhouse gas (GHG) emissions at the expense of water consumption or land occupation, we systematically assess the most significant impacts in line with the recognised ISO 14040/44 standards on LCA. We have been conducting LCAs to identify the environmental impacts of our major product categories, including their packaging. This process, which considers the production of agricultural raw materials, product manufacturing, packaging, distribution, consumption and end-of-life, enables us to work with our business partners to continuously improve the environmental performance of our products.

DESCRIPTION Environmental Life Cycle Assessment (LCA) is a compilation and evaluation of inputs, outputs and potential environmental impacts of a product throughout its life cycle. NestlĂŠ is committed to the systematic assessment and optimisation of environmental impacts in the design of our new and renovated products.

LCAs EXAMPLE: B-FOOD FROM AMBIENT TO FROZEN In 2009, the Global Warming Potential of 6 key B-Food products was measured. Values differ between ambient and frozen products (from <0.25 to >1.8). The areas to focus on, according to the LCAs executed, are: sourcing in all product categories, distribution (more relevant for frozen food due to the impact in the entire cold chain stages), and consumer use (more relevant proportionally in the dry foods tested). Improve sourcing on key priority ingredients per market within the next 5 years based on B-Food and market priorities Improve packaging impact on at least 40% B-Food packs within the next 5 years based on B-Food and market priorities Implement best practices for manufacturing in order to reduce waste, energy, greenhouse gases and water usage (1 project/factory). Implement the selected best practices for distribution aimed to reduce greenhouse gas emissions and energy (special focus for frozen food). Inform consumers of actions they can take to reduce their impact when shopping, storing, cooking and disposing/recycling food.

NestlĂŠ Tools that Support Environmental Sustainability: Research & Development Ecodesign Tool (EcodEX) OBJECTIVE The objective of this tool is to help to systematically assess the environmental impacts in the design of new and renovated products.

DESCRIPTION To make the life cycle assessment process faster, more efficient and applicable to every product development project, we have started the roll out of an eco-design tool called EcodEX, a multi-criteria eco-design tool that covers both packaging and ingredients and can be applied to all product categories. Designed in partnership with software developer Selerant, EcodEX assesses different scenarios across a range of environmental indicators such as water consumption, greenhouse gas emissions, non-renewable energy and minerals , land use and ecosystem impact. It will help us make environmentally-informed choices on everything from ingredients to packaging to end-of-life options by systematically embedding environmental considerations into the way we make our products.

Next Steps: 2013 Roll out of EcodEX to all Product Technology Centres

Nestlé Tools that Support Environmental Sustainability: Sourcing of Raw Materials SAIN – Sustainable Agriculture Initiative at Nestlé OBJECTIVE SAIN’s primary objective is to ensure that we source and supply smarter, natural resources by: Not wasting Not polluting Not destroying A good start is eradicating the worst and promoting better Sustainable Agricultural Practices. Producing more food from the same area of land while reducing the environmental impacts requires what we call “Sustainable intensification of Agriculture”.

DESCRIPTION SAIN, also sometimes referred to as SAI-Nestlé is a programme to optimise the supply chain from “farm to factory”, to improve efficiency, risk management and to support sustainable agriculture. It focuses on raw material sourcing where we have direct contacts with farmers or long-term relations with preferred suppliers, traders or primary processors. SAIN is a company-wide initiative that focuses on raw material sourcing in situations where we have direct contact with farmers and long-term business relations with traders or primary processors. Through SAIN we share best agricultural and sourcing practices relating to environmental and social sustainability to increase business and environmental performance and produce safe, high quality food products.

SAIN EXAMPLE: REDUCING WATER CONSUMPTION IN CHINA One of our SAIN initiatives in China, where it helped reduce water consumption by 80% in the processing of coffee in 2010. New post-harvest equipment was introduced to the Nestlé farm in the Yunnan Province that now serves to demonstrate water saving techniques by recycling water and reusing pulps from coffee beans as fertiliser. This is only one of over 130 SAIN Cases that have been recorded since 2005.

Nestlé Tools that Support Environmental Sustainability: Sourcing of Raw Materials RISE 2.0 – Response-Inducing Sustainability Evaluation OBJECTIVE RISE 2.0’s objective is to provide a holistic evaluation of the sustainability of agricultural production at farm level. The vision of RISE is to contribute to more sustainable agricultural production by helping disseminate the philosophy and practice of sustainable farming. This shall be achieved by making sustainability more measurable, tangible and communicable at farm level. By pin-pointing sustainability potentials and deficits, classical economy-focused farm management is complemented by the environmental and social dimension. Our target group includes all stakeholders in agriculture, society, administration and business who share this vision.

DESCRIPTION

The RISE method has been developed and refined since 2000 in cooperation with Swiss and international partners and clients from science, society, the public administration and the food and agro-industries. It has been applied on some 750 farms in more than 20 countries.

We use RISE, an indicator and interview-based method for assessing the sustainability of farm operations across economic, social and environmental dimensions. Environmental issues considered as part of the rise assessments include soil use, nutrient flows, water use, energy and climate and biodiversity and plant production. A new version, RISE 2.0, was developed from 2009 to 2011 to further improve the tool and make it available to different languages. RISE now evaluates the sustainability of agricultural production through ten indicators ranging from action needed to good performance.

EXAMPLE: RISE IMPLEMENTATION IN NESTLÉ ECUADOR Nestlé Ecuador implemented RISE 2.0 from 2011 in more than 20 representative farms providing milk to Cayambe factory. The RISE analysis has identified key areas to improve farm sustainability, especially implementing silvopastoral systems – planting trees on pastoral and grazing land. Farmers have been trained in silvopastoral dairy farming, and have also received technical help in plant nursery, sowing and protection methods. So far, more than 200 hectares (11 farms) has been sowed with an average density of 100 plants/ha – thereby improving biodiversity and the landscape. The silvopastoral system will be implemented in other areas in Ecuador.

Nestlé Tools that Support Environmental Sustainability: Sourcing of Raw Materials The Responsible Sourcing Traceability Programme OBJECTIVE

The Responsible Sourcing Traceability (RST) Programme promotes compliance with Nestlé’s Responsible Sourcing Guidelines (RSG) in our extended value chains, back to the level of primary production. The Guidelines cover materials relating to agriculture, forestry, fishery or aquaculture origin. They provide a framework for continuous improvement with the ambition that all our purchases will come from responsible sources that are committed to a process of continuous improvement towards environmental, social and economic sustainability, supported by supply chain transparency and credible verification.

DESCRIPTION & ACTIONS Our Responsible Sourcing Traceability Journey – 2010 to 2013 In 2010, Nestlé officially launched the Nescafé Plan and the Nestlé Cocoa Plan. Also in 2010, we launched Responsible Sourcing Action Plans on palm oil and paper and board to implement our commitment to combat deforestation in our supply chains. In 2011, we launched Action Plans on sugar cane, hazelnuts and natural vanilla. In 2012, we put in place an Action Plan for soya and we developed Responsible Sourcing Guidelines for fish and seafood, dairy, meat, poultry and eggs, which will be implemented from 2013 onwards. For each of these material categories, Responsible Sourcing Guidelines have been developed to define the priorities for continuous improvement of our suppliers’ environmental, social and economic performance, back to the farm or feedstock level. Examples of what we plan to do Palm oil - We aim to increase the volume that we can trace back to plantations that are independently assessed and verified against our RSGs Soya - Our priority in 2013 will be to put in place RSG Action Plans with all our major soya suppliers in Brazil and Argentina. We will use independent certification schemes, like the RTRS, as appropriate and available, to verify compliance with our RSGs over time.

Nestlé Tools that Support Environmental Sustainability: Manufacturing Water Resources Review (WRR) OBJECTIVE We conduct Water Resources Reviews in factories located in water stressed areas first – a process through which we evaluate the longterm availability of water resources around our factories, and through which we engage with stakeholders from academia, civil society and the public sector in order to address water management beyond our factory gates at a watershed level – to raise awareness, identify key issues and devise action plans.

DESCRIPTION The Water Resources Review (WRR) is an initiative launched at Nestlé to assess the sustainability level of long term water supply in our factories. Its deployment started in 2006 at Nestlé Waters factories and since 2008 within the rest of Nestlé Operations. The WRR has already covered more than 110 factores. The WRR program is deployed in those factories needing specific focus for different reasons, including: Located in specific water stressed/water scarce regions and/or Use of large amount of water in their process and/or Represent a strategic interest in value creation and/or Possible recorded issues encountered in the local water resources management.

EXAMPLE: THE WATER RESOURCES REVIEW PROGRAMME STRATEGY Our Water Strategy: Nestlé factories need to have access to water of sufficient quantity and quality over the long term. However, water must be used efficiently, while complying with regulations, respecting local environment and social context, and taking into account new climate patterns and growing pressure on water. There are five ‘pillars’ – quantity, quality, site protection, regulatory compliance and relationships with stakeholders. The main focus is on hydro-geological assessment and sustainable use of local water resources. This is done to raise awareness on water resources at a factory level, to estimate risk level and identify key issues in local water resources management and to set up specific action plans towards sustainable water use.

Nestlé Tools that Support Environmental Sustainability: Manufacturing Energy Target Setting (ETS) OBJECTIVE We aim to use the most efficient technologies and apply best practices in order to further optimise energy consumption, utilise sustainably-managed renewable energy sources, recover value from by-products and control and eliminate emissions, including greenhouse gases.

DESCRIPTION An Energy Target Setting (ETS) Initiative is a is a thorough analysis of the energy and water conversion & usage in our factories aiming at issuing an action plan, validated by the Factory Management & Market Technical Management, unlocking the energy and water saving potential. The exercise lasts 10 days on-site and aims at: • Analysing the energy/water conversion and use in the factory • Identifying and documenting energy/water saving opportunities • Establishing an action plan together with the factory and Market with clear accountabilities and timing. As we seek to reduce energy consumption per tonne of product by 25% by 2015 vs. 2005, we continue to investigate the setting of energy consumption targets by product category and are exploring the viability of additional lead performance indicators. As an integral part of Nestlé Continuous Excellence, we use i-nexus, a project-management system, to report any type of improvement projects, including energy savings. In 2012, our on-site energy consumption was reduced by 6% compared to 2002, while increasing the production volume by 52%.

EXAMPLE: ONGOING PROJECTS TO REDUCE ENERGY USE FURTHER Our Energy Target Setting Initiative completed 36 projects in 2012, during which we identified more than 850 projects for a total investment of about CHF 82 million. These projects have resulted in an annual energy saving of about 2 million GJ (gigajoules – an energy measurement unit) and a reduction of approximately 189,000 tonnes of CO 2. Energy-saving equipment Investments made in energy-saving projects and renewable energy solutions do generally provide long-term benefits, and we have both increased our investment in such schemes and extended the acceptable return on investment periods beyond our normal criteria.

NestlĂŠ Tools that Support Environmental Sustainability: Packaging PIQET: Packaging Impact Quick Evaluation Tool OBJECTIVE Our Packaging Impact Quick Evaluation Tool (PIQET) is a streamlined multi-criteria Lifecycle Assessment (LCA) tool, which assists in the selection of the most appropriate packaging for many products. It strictly follows LCA methodology and assesses the entire life cycle of packaging.

DESCRIPTION As part of their everyday work, 500 packaging specialists around the world are using PIQET, allowing a factual comparison of the environmental impact of different packaging choices across a range of environmental indicators. Approximately 1700 Eco Design analyses have already been completed. PIQET enables packaging specifications, manufacturing and distribution data to be quickly entered and assessed. It considers all levels of packaging and product categories and allows for assessments of incoming raw materials packaging systems and outgoing product packaging systems of an organisation. â&#x20AC;&#x153; Users of PIQET are able to explore improvement options by quickly re-running evaluations with changed packaging system specifications. There are eight environmental indicators in a PIQET assessment including climate change, minerals and fuel, water use, solid waste, land use, photochemical oxidation, cumulative energy demand and eutrophication (excessive richness of nutrients in a lake or other body of water, frequently due to runoff from the land, which causes a dense growth of plant life and death of animal life from lack of oxygen).

EXAMPLE: OPTIMISING PACKAGING AT THE DESIGN STAGE PIQET was used to improve the environmental performance of the packaging for our Crunch and Galak chocolate in Italy. The new packaging, which is more easy to recycle, has resulted in an annual saving of EUR 160,000 (CHF193,000). The diagram to the left illustrates the environmental performance improvements achieved with the new packaging (pink) compared to the old Packaging (blue).

Nestlé Tools that Support Environmental Sustainability: Distribution Using Telematic Systems to Monitor Driving Behaviours OBJECTIVE The objective of telematics, similar to the black boxes used on aeroplanes, is to remotely collect data on how vehicles are being driven and their subsequent engine performance.

DESCRIPTION: EFFICIENCY & OPTIMISATION & USING PERFORMANCE INDICATORS IN WAREHOUSING & LOGISTICS In 2011, Nestlé Switzerland assessed five telematic systems in 66 trucks. The tests showed that telematics encourages safer driving behaviours and improve environmental performance, which in turn reduces our operational costs. In parallel, Nestlé Waters North America and Nestlé Direct Store Delivery in the US carried out similar pilots. Based on the NWNA pilot results, reduction in idle time could save as much as $1,000,000 in fuel costs and approximately 2,595 tonnes of CO2 emissions. The engine diagnostics information could lead to $150,000 in yearly maintenance savings. Nestlé Waters North America plans to install telematics across their whole fleet of 1,600 route trucks in 2013. Similar savings are expected by Nestlé Direct Store Delivery in 2013. Following these successful tests in Switzerland and North America, telematics systems are now also rolled out in other regions.

Nestlé Tools that Support Environmental Sustainability: Marketing & Consumer Communication Tools: Nescafé LCA Communication Tool & Beyond The Label OBJECTIVE & DESCRIPTION: ENHANCING CONSUMER UNDERSTANDING We are committed to meaningful and accurate environmental information about our products, activities and services at corporate, market and product brand level, based on scientific evidence. We continuously enhance the environmental information we provide to consumers about our products. This increased transparency not only helps consumers decide what to purchase, but also enables them to reduce their environmental impact when preparing and using our products, including minimising energy and water use. The interactive Nescafé Life Cycle Assessment (LCA) communication tool in France, for example, invites consumers to click on the different stages of the Nescafé life cycle to learn about the level and nature of impacts at each product phase. Users can also look at GHG emissions, water use or biodiversity impacts across the full product life cycle. You can view this after the course at http://nescafe.outilacv.com .

EXAMPLE: BEYOND THE LABEL: EDUCATING THE CONSUMER WITH ENVIRONMENTAL CONTENT

Nestlé Tools that Support Environmental Sustainability: Supporting Our Employees Sustainability Category Profiles (SCPs) OBJECTIVE Nestlé Sustainability Category Profiles (Nestlé SCPs) are a business information tool which provides our employees with an overview of the Nestlé hotspots of products categories along the value chain. They contain a selection of different activities and the associated impact as a result of the activities Nestlé has undertaken.

DESCRIPTION Nestlé SCPs give you an overview of main environmental hotspots, activities and impacts along the product value chain of the different Nestlé product categories. Nestlé SCPs describe how Nestlé is continuously improving the sustainability performance of its products.

EXAMPLE: NESTLE SCPs IN ACTION

The questions to ask from the transition to the life cycle and understanding the environmental impact are what are the hotspots and what activities Nestlé is doing to continuously improve the performance of its product categories? Nestlé Sustainability Category Profiles are available for different product categories including instant coffee, bottled water, wet and dry pet food, ambient food, milk, dark chocolate.

The SCPs are available in the “the Marketplace”

Thank you for your attention and for being part of the NestlĂŠ ES ambassadors 94