contextwww.07ppp.com

TheNestléCreatingSharedValueReportCreatingSharedValueForabusinesstobesuccessfulinthelongtermithastocreatevalue,notonlyforitsshareholdersbutalsoforsocietyForabusinesstobesuccessfulinthelongtermithastocreatevalue,notonlyforitsshareholdersbutalsoforsociety.
WecallthisCreatingSharedValue.
Itisnotphilanthropyoranadd-on,butafundamentalpartofourbusinessstrategy.
Simplystated,inordertocreatevalueforourshareholdersandourCompany,weneedtocreatevalueforthepeopleinthecountrieswherewearepresent.
Thisincludesthefarmerswhosupplyus,ouremployees,ourconsumersandthecommunitieswhereweoperate.
AsanecessaryconditionforCreatingSharedValue,weneedtodemonstrateresponsiblebehaviour–byassuringcomplianceandsustainability.
ThisincludescomplyingwithNestléBusinessPrinciples,nationallawsandinternationalnorms,andensuringthatouractionsareenvironmentallysound,sociallyjustandeconomicallyviable.
ThispublicationisanintegralpartofouroverallCompanyreporting,andisacompaniondocumenttothe2007NestléManagementReportandGovernanceReport.
ItisarststepinprovidingincreasingamountsofworldwideinformationabouttheCompany.
WiththedevelopmentofGLOBE,ournewbusinessmanagementinformationsystem,wecanbegintoprovideincreasingamountsofinformationregardingNestléonaworldwidebasiswhichwerepreviouslyinaccessible.
AsadditionalareasofGLOBEareimplementedinfutureyears,inareassuchashumanresourcesandproductcomposition,wewillbeabletoexpandourreportingaccordingly.
TheNestléCreatingSharedValueReportTheNestléCreatingSharedValueReportCreatingSharedValueForabusinesstobesuccessfulinthelongtermithastocreatevalue,notonlyforitsshareholdersbutalsoforsocietyForabusinesstobesuccessfulinthelongtermithastocreatevalue,notonlyforitsshareholdersbutalsoforsociety.
WecallthisCreatingSharedValue.
Itisnotphilanthropyoranadd-on,butafundamentalpartofourbusinessstrategy.
Simplystated,inordertocreatevalueforourshareholdersandourCompany,weneedtocreatevalueforthepeopleinthecountrieswherewearepresent.
Thisincludesthefarmerswhosupplyus,ouremployees,ourconsumersandthecommunitieswhereweoperate.
AsanecessaryconditionforCreatingSharedValue,weneedtodemonstrateresponsiblebehaviour–byassuringcomplianceandsustainability.
ThisincludescomplyingwithNestléBusinessPrinciples,nationallawsandinternationalnorms,andensuringthatouractionsareenvironmentallysound,sociallyjustandeconomicallyviable.
ThispublicationisanintegralpartofouroverallCompanyreporting,andisacompaniondocumenttothe2007NestléManagementReportandGovernanceReport.
ItisarststepinprovidingincreasingamountsofworldwideinformationabouttheCompany.
WiththedevelopmentofGLOBE,ournewbusinessmanagementinformationsystem,wecanbegintoprovideincreasingamountsofinformationregardingNestléonaworldwidebasiswhichwerepreviouslyinaccessible.
AsadditionalareasofGLOBEareimplementedinfutureyears,inareassuchashumanresourcesandproductcomposition,wewillbeabletoexpandourreportingaccordingly.
TheNestléCreatingSharedValueReportMrsMamounaTourétradesinBellevillemarketintheTreichvilledistrict,southofAbidjan,Cted'Ivoire.
AffordableNestléproductslikeMaggicubeshelpgenerateincome,and90%ofthestallsinBellevilleofferMaggiforsale*Referenceyear:1998**Referenceyear:20022.
2AveragenumberofsuccessorsperKeyBusinessPosition917NumberofKeyBusinessPositions42%Indevelopingcountries,localManagementCommitteememberswhoarenationalsofthecountry65647Numberofemployeesindevelopingcountrieswhoreceivedformalclassroomtraining76%Increaseofproductionvolume*22%Reductionofpackagingmaterialforbottledwater**28%Reductionofwaterwithdrawal*3%Reductionofenergyuse*16%Reductionofgreenhousegasemissions*29.
9millionValueofcreditloanstofarmersin2006,inCHF610000Numberoffarmersreceivingfreetechnicalassistance97500Tonnesofcoffeesourceddirectlyfromfarmersin20062-5%Averageannualmilkdistrictgrowthrate77billionPotentialmarketforPopularlyPositionedProducts,inCHF50millionNumberofconsumersreachedbyournewfactoryinNorth-EastBrazil14.
6billionSalesvalueofproducts"60/40+"testedin2007,inCHF6445Numberofproductsrenovatedfornutritionorhealthconsiderationsin20074.
4billionSalesvalueofproductswithBrandedActiveBenets,inCHF1.
88billionTotalR&Dexpensesin2007,inCHFHighlightsImprovingworkers'earningcapacityandcreatingaskilledworkforce:pages20-25Reducingourenvironmentalfootprintandreducingoperationalcosts:pages10-19Helpingfarmersimproveearningsandassuringoursupplyofqualityrawmaterials:pages26-35Expandinglowerincomesegment'saccesstonutritionandbroadeningourcustomerbase:pages44-45Improvednutritionfortheconsumerandincreasingsales/protabilityforNestlé:pages38-43PerformancesummaryNestléCreatingSharedValueperformanceindicatorsGRIreferenceTotalGroupsales(CHFbillion)107.
6n/aTotalshareholderreturn:1January1997–31December2007342.
5%n/aManufacturingandourenvironmentalfootprintMaterialsRawmaterialsandingredients(exceptwater[seebelow],milliontonnes)20.
48EN1Packagingmaterials(milliontonnes)4.
08EN1By-products(forrecycling,milliontonnes)1.
07EN22Reductionofby-productssince1998(pertonneofproduct)58%n/aWaste(fornaldisposal,milliontonnes)0.
372EN22Reductionofwastesince1998(pertonneofproduct)58%n/aEnergyDirectenergyconsumption(PetaJoules)85.
3EN3Energysavedsince1998(pertonneofproduct)45%EN5GreenhousegasesDirectCO2emissions(milliontonnes)14.
1EN16ReductionofdirectCO2emissionssince1998(pertonneofproduct)53%EN18WaterTotalwaterwithdrawal(millionm3)157EN8Watersavedsince1998(pertonneofproduct)59%n/aTotalwaterdischarge(millionm3)101EN21Qualityofwaterdischarged(averagemgCOD/l)62EN21PackagingSourcereduction(thousandtonnes):1991–2007326.
3n/aSourcereduction(CHFmillion):1991–2007583.
7n/aReductionofpackagingweight(perlofproduct)NestléWaters:2002–200722%n/aGovernanceISO14001/OHSAS18001-certiedsites(numberofcerticates)171n/aSitesauditedthroughCAREprogramme403n/aOurpeopleWorkforcesize(totalnumberofemployees)276050LA1LostTimeInjuries(permillionhoursworked)3.
7LA7TotalInjuryRate(permillionhoursworked)7.
5LA7Leadershippositions2heldbywomen24%LA4LocalManagementCommitteemembersnativetocountryindevelopingcountries42%n/aFormalclassroomtrainingreceivedindevelopingcountries(numberofemployees)65647LA10KeyBusinessPositions917n/aEmployeeswithpotentialtollKeyBusinessPositions3247n/aAgricultureandruraldevelopmentFarmerstrainedthroughcapacity-buildingprogrammes111800n/aMarketscoveredby(SAIN)sustainableprogrammes28n/aSuppliersauditedforsafety,qualityandprocessing3400n/aProductsandconsumersPopularlyPositionedProducts3:Europe(salesvolume,CHFmillion)4212n/aPopularlyPositionedProducts3:Americas(salesvolume,CHFmillion)43517n/aPopularlyPositionedProducts3:Asia,OceaniaandAfrica(salesvolume,CHFmillion)41722n/aNestléNutritionbusiness(sales2007,CHFmillion)8434n/aNumberofproductsrenovatedfornutritionorhealthconsiderations56445n/aIncreaseinnutritiousingredientsoressentialnutrients(numberofproducts)52603n/aReductionofsodium,sugars,TFAS,totalfatorarticialcolourings(numberofproducts)53842n/a-Reductionintransfattyacid(tonnes):December2003–February200734200n/a-Reductioninsugar(tonnes):January2003–December2006204000n/a-Reductioninsalt(tonnes):April2005–December20065000n/aProductscoveredbyNestléNutritionalCompass(%ofsales)95PR3ProductswithGDAlabelling(%ofsales)645PR3Infantformulamarketing(numberofinternalaudits)9PR7Infantformulamarketing(numberofexternalaudits)1PR7Foracompletelistofindicatorsanddenitionspleasevisitwww.
nestle.
com/csvNestléhasdevelopedperformanceindicatorstoprovideafocusformeasuringandreportingCreatingSharedValue.
ThesummarybelowformspartofourcommunicationofprogressontheUNGlobalCompactPrinciples(seepage52forfurtherdetails).
Unlessstatedotherwise,performanceindicatorsarefortheyearending31December2007.
1IncludesCO2fromfuelusage,refrigerantsandOzoneDepletionPotential(ODP)substances2Denedaspositionswithpeoplemanagementresponsibilities3Productsforthoseonlowerincomes42007PPPsalescover3marketsinZoneEurope,22inZoneAmericasand12inZoneAsia,OceaniaandAfrica5Basedonreportsofapproximately75%ofworldwideproductdevelopmentteams6BasedonreportsforEuropeanUniononlyMrsMamounaTourétradesinBellevillemarketintheTreichvilledistrict,southofAbidjan,Cted'Ivoire.
AffordableNestléproductslikeMaggicubeshelpgenerateincome,and90%ofthestallsinBellevilleofferMaggiforsale*Referenceyear:1998**Referenceyear:20022.
2AveragenumberofsuccessorsperKeyBusinessPosition917NumberofKeyBusinessPositions42%Indevelopingcountries,localManagementCommitteememberswhoarenationalsofthecountry65647Numberofemployeesindevelopingcountrieswhoreceivedformalclassroomtraining76%Increaseofproductionvolume*22%Reductionofpackagingmaterialforbottledwater**28%Reductionofwaterwithdrawal*3%Reductionofenergyuse*16%Reductionofgreenhousegasemissions*29.
9millionValueofcreditloanstofarmersin2006,inCHF610000Numberoffarmersreceivingfreetechnicalassistance97500Tonnesofcoffeesourceddirectlyfromfarmersin20062-5%Averageannualmilkdistrictgrowthrate77billionPotentialmarketforPopularlyPositionedProducts,inCHF50millionNumberofconsumersreachedbyournewfactoryinNorth-EastBrazil14.
6billionSalesvalueofproducts"60/40+"testedin2007,inCHF6445Numberofproductsrenovatedfornutritionorhealthconsiderationsin20074.
4billionSalesvalueofproductswithBrandedActiveBenets,inCHF1.
88billionTotalR&Dexpensesin2007,inCHFHighlightsImprovingworkers'earningcapacityandcreatingaskilledworkforce:pages20-25Reducingourenvironmentalfootprintandreducingoperationalcosts:pages10-19Helpingfarmersimproveearningsandassuringoursupplyofqualityrawmaterials:pages26-35Expandinglowerincomesegment'saccesstonutritionandbroadeningourcustomerbase:pages44-45Improvednutritionfortheconsumerandincreasingsales/protabilityforNestlé:pages38-43PerformancesummaryNestléCreatingSharedValueperformanceindicatorsGRIreferenceTotalGroupsales(CHFbillion)107.
6n/aTotalshareholderreturn:1January1997–31December2007342.
5%n/aManufacturingandourenvironmentalfootprintMaterialsRawmaterialsandingredients(exceptwater[seebelow],milliontonnes)20.
48EN1Packagingmaterials(milliontonnes)4.
08EN1By-products(forrecycling,milliontonnes)1.
07EN22Reductionofby-productssince1998(pertonneofproduct)58%n/aWaste(fornaldisposal,milliontonnes)0.
372EN22Reductionofwastesince1998(pertonneofproduct)58%n/aEnergyDirectenergyconsumption(PetaJoules)85.
3EN3Energysavedsince1998(pertonneofproduct)45%EN5GreenhousegasesDirectCO2emissions(milliontonnes)14.
1EN16ReductionofdirectCO2emissionssince1998(pertonneofproduct)53%EN18WaterTotalwaterwithdrawal(millionm3)157EN8Watersavedsince1998(pertonneofproduct)59%n/aTotalwaterdischarge(millionm3)101EN21Qualityofwaterdischarged(averagemgCOD/l)62EN21PackagingSourcereduction(thousandtonnes):1991–2007326.
3n/aSourcereduction(CHFmillion):1991–2007583.
7n/aReductionofpackagingweight(perlofproduct)NestléWaters:2002–200722%n/aGovernanceISO14001/OHSAS18001-certiedsites(numberofcerticates)171n/aSitesauditedthroughCAREprogramme403n/aOurpeopleWorkforcesize(totalnumberofemployees)276050LA1LostTimeInjuries(permillionhoursworked)3.
7LA7TotalInjuryRate(permillionhoursworked)7.
5LA7Leadershippositions2heldbywomen24%LA4LocalManagementCommitteemembersnativetocountryindevelopingcountries42%n/aFormalclassroomtrainingreceivedindevelopingcountries(numberofemployees)65647LA10KeyBusinessPositions917n/aEmployeeswithpotentialtollKeyBusinessPositions3247n/aAgricultureandruraldevelopmentFarmerstrainedthroughcapacity-buildingprogrammes111800n/aMarketscoveredby(SAIN)sustainableprogrammes28n/aSuppliersauditedforsafety,qualityandprocessing3400n/aProductsandconsumersPopularlyPositionedProducts3:Europe(salesvolume,CHFmillion)4212n/aPopularlyPositionedProducts3:Americas(salesvolume,CHFmillion)43517n/aPopularlyPositionedProducts3:Asia,OceaniaandAfrica(salesvolume,CHFmillion)41722n/aNestléNutritionbusiness(sales2007,CHFmillion)8434n/aNumberofproductsrenovatedfornutritionorhealthconsiderations56445n/aIncreaseinnutritiousingredientsoressentialnutrients(numberofproducts)52603n/aReductionofsodium,sugars,TFAS,totalfatorarticialcolourings(numberofproducts)53842n/a-Reductionintransfattyacid(tonnes):December2003–February200734200n/a-Reductioninsugar(tonnes):January2003–December2006204000n/a-Reductioninsalt(tonnes):April2005–December20065000n/aProductscoveredbyNestléNutritionalCompass(%ofsales)95PR3ProductswithGDAlabelling(%ofsales)645PR3Infantformulamarketing(numberofinternalaudits)9PR7Infantformulamarketing(numberofexternalaudits)1PR7Foracompletelistofindicatorsanddenitionspleasevisitwww.
nestle.
com/csvNestléhasdevelopedperformanceindicatorstoprovideafocusformeasuringandreportingCreatingSharedValue.
ThesummarybelowformspartofourcommunicationofprogressontheUNGlobalCompactPrinciples(seepage52forfurtherdetails).
Unlessstatedotherwise,performanceindicatorsarefortheyearending31December2007.
1IncludesCO2fromfuelusage,refrigerantsandOzoneDepletionPotential(ODP)substances2Denedaspositionswithpeoplemanagementresponsibilities3Productsforthoseonlowerincomes42007PPPsalescover3marketsinZoneEurope,22inZoneAmericasand12inZoneAsia,OceaniaandAfrica5Basedonreportsofapproximately75%ofworldwideproductdevelopmentteams6BasedonreportsforEuropeanUniononly1TheNestléCreatingSharedValueReportCover:RaziaBerveenisa"FemaleLivestockWorker"inFarooqa,Pakistan.
SheisoneoftheNestlétrainerspassingonknowledgeandskillsto4000womenwhowillgoontobecomeagriculturalextensionworkersunderaNestlé-UnitedNationsDevelopmentProgramme(UNDP)partnershipschemeinPakistanLeft:Nestlé-sponsoredtrainingofagriculturalextensionworkersinRenala,Pakistan.
PassingonvitalskillsinwatermanagementencouragessustainablepracticesondairyfarmsinPakistan.
Moreonpage29ContentsCreatingSharedValue:theroleofbusinessinsociety2Companyprole4Aboutthisreport6BusinessPrinciplesandstrategy8Manufacturingandourenvironmentalfootprint10Ourpeople20Agricultureandruraldevelopment26Productsandconsumers36SupportoftheUNGlobalCompactPrinciplesandMillenniumDevelopmentGoals52Engagingwithourstakeholders54Futurereporting55Independentassurance–Methodology&preliminaryndingsstatement562TheNestléCreatingSharedValueReportCreatingSharedValue:theroleofbusinessinsocietyHenriNestléfoundedourCompanyin1866onasingleproduct,aninfantcereal,whichwascreatedtosavethelifeofaneighbour'schild.
Fromthattimeonwards,thefundamentalstrategyofourCompanyhasbeentocreatevalueforsociety,andindoingsocreatevalueforourshareholders.
Asaresultofthisstrategy,overthepast141yearsNestléhasgrownfromasmallfamily-ownedbusinesstobecometheworld'sforemostNutrition,HealthandWellnessCompany.
However,CreatingSharedValueforsocietyandinvestorsmeansgoingbeyondconsumerbenet.
TheveryrsteditionoftheNestléCorporateBusinessPrinciplesstatedthat"OurinvestmentsmustbegoodfortheCompanyandforthecountrieswhereweoperate".
CreatingSharedValuealsomeansbringingvaluetothefarmerswhoareoursuppliers,toouremployees,andtootherpartsofsociety.
Itmeansexaminingthemultiplepointswherewetouchsocietyandmakingverylong-terminvestmentsthatbothbenetthepublicandbenetourshareholders,whoareprimarilypensionsaversorretirees.
Overaperiodofdecades,wehaveworkedwithmillionsofmilkandcoffeefarmerstomakethembettersuppliers,andinsodoing,havehelpedthemtoclimboutofpovertyandtoprosper.
Today,weworkwithabout600000farmersglobally,providingfreetechnicalassistance,infrastructureandoverCHF29.
9millionofmicro-creditloans.
Abouthalfourfactoriesareinruralareasinthedevelopingworld,andhaveaprofoundimpactonfamilyincome,qualityoflife,andthefutureforthenextgeneration.
CreatingSharedValueadditionallymeanstreatingtheenvironmentinawaythatpreservesitasthebasisofourbusinessfordecades,andcenturies,tocome.
EndingdangeroustrendsinairandwaterpollutionandmismanagementisbasictoourbeingabletosustainagrowingFoodandBeveragesbusiness.
Weallshareonehome–planetearth–andthefutureofourbusinessisinextricablylinkedtothefutureoftheplanet.
CreatingSharedValuemeansthinkinglongterm,whileatthesametimedeliveringstrongannualresults.
OneofthefundamentalNestléCorporateBusinessPrinciplesisthat"wewillnotsacricelong-termdevelopmentforshort-termgain".
Weaimfor(andhaveachieved)consistentimprovementsinannualperformancethroughwhatwerefertoas"TheNestléModel":annualorganicgrowthof5%to6%,combinedwithasustainableannualincreaseintheprot(EBIT)margin.
Butweresistshort-termtemporarybusinessandsocialsolutions.
Forinstance,wehavepurposelyavoidedbeinglistedonstockexchangeswhichrequirereportingofquarterlyearnings,becausewebelievethiscanleadtobusinessthinkingwhichistoofocusedontheshortterm.
Asaresultofthisapproachtobusiness,independentresearchontheNestlébrandindicatesthatgloballyweareratedveryhighlyon"fulllingourresponsibilitiestosociety",andparticularlyindevelopingcountries.
ThestrengthoftheNestlébrand,includingitsperformanceinthisarea,isfundamentaltothesuccessofourCompany.
Itisaresultoftakingourrelationshipwithsocietyseriouslyovermanydecades,andbuildingabrandbasedonCreatingSharedValue.
However,wearenotsatisedwiththestatusquo.
Forinstance,weareincreasinglyfocusedonprovidingaffordable,nutritiousfoodstolower-incomepopulationsindevelopingcountries.
In2007,workingwithnationalgovernments,weopenedlarge,state-of-the-artfactoriesinruralareasofBrazil,ChinaandPakistan,toproducefoodwithhighnutritionalvalueatanaffordablecostforthelocalpopulation.
CreatingSharedValuemeansthinkinglongterm,whileatthesametimedeliveringstrongannualresults.
OneofthefundamentalNestléCorporateBusinessPrinciplesisthat'wewillnotsacricelong-termdevelopmentforshort-termgain'PeterBrabeck-Letmathe,ChairmanandCEO,Nestlé3TheNestléCreatingSharedValueReportThisreportisarststepinprovidingdataonagloballevelregardingCreatingSharedValue.
ItisanintegralpartofourCompanyreporting,togetherwiththe2007NestléManagementReportofnancialresults.
ItfollowsapublicationtwoyearsagoonNestlé,inwhichHarvard'sMarkKramerandProfessorMichaelPorterestablishedaframeworktoexamineourCompanyinLatinAmericaintermsofCreatingSharedValue.
Asaresult,wehavedenedamulti-yearplanforastep-by-stepexpansionofourmeasurementofCreatingSharedValue.
Accesstoglobalinformationhasbeenasignicantinternallimitationonourreporting,butournewGLOBEbusinessinformationsystemwill,forthersttime,allowustoprovideglobalNestléinformationinmanyareaswhereitiscurrentlyunavailable.
Webeganplanningthisreportwithastudyofoutsideviewsonwhatismostrelevantforustoreport,andthanktheSustainAbilityorganisationfortheirhelpinthis.
WehavealsosoughtstakeholderfeedbackviaanengagementprocessindifferentregionsoftheworldfacilitatedbyAccountAbilityInternational.
Asaresult,includedinthereportisasummaryofNestléactivitiesinrelationtotheGlobalReportingInitiative,theUNGlobalCompactPrinciplesandtheUNMillenniumDevelopmentGoals.
AsIpreparetohandovertheChiefExecutiveOfcerroletoMrPaulBulcke,IreectonthepastelevenyearsasNestléCEO,duringwhichtimewehaveincreasinglysoughttoengagewithsocietyandtocommunicateabouttheinterdependentrelationshipofNestléwiththepeopleofthecountrieswhereweoperate.
InmycontinuedroleasChairmanofNestlé,Iwillremaincommittedtoassuringthatwecontinuetoexpandourthinkingandengagementinthisarea.
Thisreportispartofanevolvingprocess,andIhopethatithelpsyoutounderstandandevaluateNestlé'sinterdependentrelationswithpeopleandtheplanet.
PeterBrabeck-LetmatheChairmanoftheBoardandChiefExecutiveOfcerNestléChairmanandCEOPeterBrabeck-LetmathevisitingaMexicancoffeefarminJicotepecduringatrainingsessionforthecoffeegrowersparticipatinginNestlé'sTechnicalAssistanceprogramme.
MrGonzaloContreras,oneofNestléMexico'sagronomists,demonstratesaCoffeeBerryBorerinsecttrapthatenablespestcontrolwithoutusingpesticides,contributingtomoreenvironmentallysoundcoffeegrowingconditions4TheNestléCreatingSharedValueReportSource:NestléNestléfactoriesbycontinent,2007Africa27CentralandSouthAmerica77Europe184NorthAmerica89Oceania19Asia84Source:NestléNestléemployeesbygeographicarea,2007Asia,OceaniaandAfrica27.
2%Americas38.
3%Europe34.
5%CompanyproleNestléistheworld'sleadingNutrition,HealthandWellnessCompanyVeveyLocationoftheCompany'sheadquarters,inSwitzerland1866YeartheCompanywasfounded107.
6billionTotalGroupsales,inCHF10.
6billionNetprot,inCHF276050Numberofemployees480Numberoffactories86NumberofcountriesinwhichtheCompanyhasoperationsSalesandorganicgrowthbyproductcategory,2007ProductcategorySales(CHFbillion)OrganicgrowthPowderedandliquidbeverages17.
910.
3%NestléWaters10.
46.
6%MilkproductsandIcecream20.
77.
8%NestléNutrition8.
49.
7%Prepareddishesandcookingaids18.
54.
0%Confectionery12.
35.
3%PetCare12.
17.
0%Pharmaceuticalproducts7.
311.
0%Source:Nestlé5TheNestléCreatingSharedValueReportFarleft:InaugurationofournewmilkfactoryinHailar,InnerMongolia,whichopenedin2007backedbyaNestléinvestmentofoverCHF20million.
Moreonpage14Left:KevinDuck,aNestléemployeeatCerealPartnersUK,manufacturersofShreddedWheat.
Wholegrainprovidesimportantnutritionalvalueand1.
6billionadditionalservingshavebeenaddedoverthelasttwoyearstoNestlébrandssoldinEurope.
Moreonpage42Below:ProductswithprovensuperiorityinconsumerpreferenceandnutritionalvaluearethefoundationofNestlé'sstrategy.
Ourproprietarytestingprocess,called60/40+,helpsbringanutritional"plus"whilealsoaddressingpublichealth-sensitivenutrients.
EnhancednutritionalvalueisalreadydrivingNestlé'sbusinessgrowth.
Moreonpage386TheNestléCreatingSharedValueReportAboutthisreportThisreportisNestlé'srstattemptataglobalCreatingSharedValueReport,concerningourcorporatesocialresponsibilityandsustainability.
Itisanintegralpartofourreportingandacompaniondocumenttoour2007ManagementReport.
InformationcoversNestlé'sglobaloperationsfortheyearendingDecember2007,unlessotherwisestatedandhasbeensubjecttoexternalassurance(seepage56).
Thereportcoversthosebusinessimpactsofparticularconcerntoourstakeholders(seebelowforhowtheseimpactshavebeenidentiedandprioritised).
Moreinformationonawiderrangeoftopicsisavailableonourwebsiteatwww.
nestle.
com/csvWerstexploredtheconceptofCreatingSharedValueinour2005report,TheNestléConceptofCSR,whichfocusedonourLatinAmericanoperations.
Itsauthors,FSG–SocialImpactAdvisors,ledbyManagingDirectorMarkKramer(alsoSeniorFellowatHarvardUniversity'sJohnF.
KennedySchoolofGovernment)thenchallengedNestlétoprovidefurtherevidence.
Sincethen,inconjunctionwithourbusinessareasandadvisersincludingSustainAbilityandAccountAbility,Nestléhasidentiedandassessedcriticalissues,developedglobalperformanceindicatorsandengagedstakeholdersindebate.
Theresultisthis,our2007CreatingSharedValueReport,arststeptowardsprovidingevidencethatthesuccessfulcreationoflong-termshareholdervalueisdependentalsoonthecreationofvalueforsociety.
OurreportinghistoryPreviousreportshavefocusedonspecictopicsorregions,asdetailedbelow:TheNestléWaterManagementReport–2006;Nestlé,theCommunityandtheUNMillenniumDevelopmentGoals–2006;TheNestléConceptofCSRasImplementedinLatinAmerica–2005;TheNestléCommitmenttoAfrica–2004;FacesofCoffee–2003;NestléandWater:Sustainability,Protection,Stewardship–2003;TheNestléPeopleDevelopmentReview–2002;SustainabilityReview–2001;NestléEnvironmentalProgressReport–2001;NestléandtheEnvironment–1995.
Previousreportsareavailableatwww.
nestle.
com/csv/downloadsKeyissuesThisreportfocusesonareaswhichhaveasignicantcurrentorpotentialimpactontheCompany,areofsignicantconcerntostakeholdersandoverwhichNestléhasareasonabledegreeofcontrol.
WorkingwithSustainAbilityandusingtheirbestpracticemethodology,weundertookasystematicprocesstoprioritisetheissuesdeemedmostcriticaltotheCompany,drawingontheopinionsofinvestors,civilsocietygroupsandthemedia,andthenassessedthemwithNestléexecutives.
Fiveareaswereidentiedandprioritisedforinclusioninthisreport:Manufacturingandourenvironmentalfootprint:Managingoperationswithrespecttotheenvironment;andhowresponsiblesafety,healthandenvironmentpracticescreateamoreefcientandcost-effectivebusiness(pages10-19);7TheNestléCreatingSharedValueReportCreatingSharedValueateachstageofthevaluechainEnvironment,manufacturingandpeopleProductsandconsumersAgricultureandruraldevelopmentValueforNestléValueforsocietyExpertiseandsupportforfarmersProvidingongoingR&DandexpertiseforsuppliersInvestinginlocalmanufacturingplantsBuildingbrandsthroughresponsiblemarketingIncreasingvolumeandvalueofsalesSecuringsuppliesofhigh-qualityrawmaterialsImprovingcommunityrelationshipsandproductqualityLoweringmanufacturinganddistributioncostsEnteringnewandemergingmarketsAchievingcompetitiveshareholderreturnsImprovedyieldsandincreasedincomesReducingconsumptionofnaturalresourcesCreatingjobsinlocalcommunitiesWideningaccesstonutritionalproductsconsumerspreferGeneratinglocalinvestmentandeconomicgrowthOurpeople:Actingasaresponsibleemployer(pages20-25);Agricultureandruraldevelopment:Nestlé'sapproachtoagriculturalsourcing(pages26-35);Nutrition,HealthandWellness:Nestlé'sstrategyofimprovingNutrition,HealthandWellnessasadriverofbusinessgrowth(pages38-43);Marketingandcommunication:Marketingbasedonimprovinginformationconcerningnutritionandhealthinaresponsibleway(pages46-51).
ThebusinesscaseforNestlé:simultaneousbenetsforNestléandsocietyNestlé'slong-termobjectiveistocreatesustainablevalueforitsshareholders.
Todothis,weneedtocreatevalueforthesocietieswhereweoperate.
ThediagramaboveshowshowNestlé'sactionsateachstageofitsvaluechainaredrivenbyitsbusinessstrategy,butalsocreatevalueforthesocietieswherewearepresent.
ReportingboundaryandscopeDataisprovidedforNestlé'swhollyownedcompaniesandsubsidiaries,excludingjointventuresandsuppliers,unlessotherwisestated.
Aspartofcontinuouslydevelopingourapproachtosharedvaluecreation,wewillexplorethepossibilityofwideningthescopeofourreporting.
Theenvironmentaldatarefertofactoriesonly,includingCerealPartnersWorldwideandDairyPartnersAmericas.
Alconreportsseparately.
Health&SafetygurescoverallNestléemployees,aswellasapproximately61000contractors.
Lookcloser@nestle.
comComplementaryvideoandslide-showmaterialissummarisedin"lookcloser"boxesthroughoutthisreport.
Atwww.
nestle.
com/csv,youcanalsolistentoaudiocontent,andreadcasestudies,policiesandpublicationsonCreatingSharedValue.
8TheNestléCreatingSharedValueReportBusinessPrinciplesandstrategyAframeworkforCreatingSharedValueNestlé'sapproachisbasedon:Along-termview;Strongpresencesin,andunderstandingof,countriesandcultures;Responsibilityandaccountability.
Todeliversharedvaluewewillalso:Continuetodevelopnewskillsinresponsetorapidlychangingmarketsandoperatingconditions;Continuetoapplyourglobalprinciplesandstandardsconsistentlyandrigorouslyinallcountries;Fostersustainabledevelopmentinpartnershipwithothers,notjustinourowndirectoperations,butalsobycollaboratingwithothersonwiderissueswherewecanbringinuenceandleadershiptobear;Understandandaddresstherisksandopportunitiesraisedbyourmostcriticalsustainabilityimpacts;Addressthembystrengtheningourgovernanceandmanagementsystems;Developcleargoals–nancial,environmentalandsocial;Workwithourbusinesspartnersandstakeholderstodeliversharedvalue.
Latersectionsofthisreportoutlinespecicsocialandenvironmentalchallengesweareaddressinginrelationtoproducts,consumers,employees,agriculture,sourcingandmanufacturing.
ThediagramoppositesummarisesNestlé'sframeworkforCreatingSharedValue.
Nestléhasastrongcorporateculture,whichunitespeoplefromwidelydifferentbackgroundsinover100countriesinasinglecorporateculturebuiltaroundbasichumanvaluesandprinciples.
OurrstprincipleisthatourinvestmentsmustbegoodfortheCompanyandforthecountrieswherewedobusiness.
BusinessPrinciplesTheNestlécultureandrelationshiptostakeholdersisexpressedinthe:NestléCorporateBusinessPrinciples;NestléManagementandLeadershipPrinciples;NestléCodeofBusinessConduct.
Globalpoliciesonnutrition,marketing,environment,occupationalhealthandsafetyandhumanresourcessupporttheseprinciples.
Nestlé'sprinciplesandpoliciesareavailablefordownloadfromwww.
nestle.
com/csv/downloadsKeymanagementtoolsincludetheNestléEnvironmentManagementSystem(NEMS)andourHRManagementSystem.
FormalandinformalnetworksofNestléexpertsalsoshareinformationinordertodevelopglobalbestpractices.
9TheNestléCreatingSharedValueReportSocietalvalue=SharedvalueNestléandshareholdervalue+Nestlé'sframeworkforCreatingSharedValueNestlésocialandenvironmentalimpactsNestlécommitmentsandactionsNestlésocialandenvironmentalimpactsNestlécommitmentsandactionsNestlésocialandenvironmentalimpactsNestlécommitmentsandactionsEnvironment,manufacturingandpeopleAgricultureandruraldevelopmentProductsandconsumersNestléBusinessPrinciplesandcommitmentstoexternalstandardsIneverypartofourvaluechain,fromsourcingtoendproduct,NestléBusinessPrinciplesandexternalstandardsarethebasisofallouractivities.
Ateverystage,wearecommittedtomanagingimpactsanddeliveringbenets,CreatingSharedValueforNestléandsocietyEngagingwithourstakeholdersTounderstandtheenvironmentinwhichtheCompanyoperates,NestléexpertsthroughouttheCompanyengagewithconsumers,investorsandNGOstoinformtheactionsthecompanytakes,theproductsweproduceandtheinformationwecommunicate.
Thisyear,wehavealsoundertakencorporateengagementwithopinionformers;seepage54formoredetails.
Nestléalsoworkscloselywithpeerstodevelopmarket-wideframeworks.
TheseincludetheSustainableAgricultureInitiative(seepages33–35)andPROGRESS,aforumofleadingFast-MovingConsumerGoods(FMCG)brandproducerssupportingresponsiblesourcingpracticesandsustainableproductionsystems.
FormalgovernancebodiesOperationsSustainabilityCouncil;AuditCommittee;RiskManagementCommittee;GroupComplianceCommittee.
TheBoardistheultimategovernancebodyoftheCompanyandisresponsibleforthesupervisionoftheGroup.
WiththeexceptionofPeterBrabeck-Letmathe(ChairmanandCEO),allmembersoftheBoardofDirectorsarenon-executivemembers.
Forfullinformationongovernance,pleaseseeourCorporateGovernanceReport2007atwww.
nestle.
com/csv/downloadsSettingobjectivesNestléhasacultureofcontinuousimprovementandgenerallyconsidershistoricalperformancetrendstobemorerevealingandusefulforfutureplanningthansettingindividualforwardtargets.
AuditingandassurancestandardsWeensurerigorousapplicationofprinciplesandpoliciesthroughauditingandassurancestandards:ComplianceagainstCorporateBusinessPrinciplesintheareasofHR,safety,healthandenvironmentisassuredthroughourCAREprogramme,whichreliesonanindependent,externalauditnetwork;Inaddition,manufacturingsitesarebeingprogressivelycertiedagainststandardsincludingISO14001,OHSAS18001andISO22000;Infantfoodmarketingactivitiesareindependentlyauditedinternallyandexternally;Suppliersareregularlyscreenedandaudited.
10ValueforNestléBuildinghigh-quality,high-performingfactorieswithgoodandcontinuouslyimprovingenvironmentalperformance,supportedbystronglocalbusinesses,enablesNestlétoachievesustainableprotablegrowthbymeetingtheincreasingdemandforfoodandbeverages.
Asacompanythatrequireshigh-qualityagriculturalrawmaterialsandcleanwaterthroughoutitsvaluechainwedependonacleanenvironmentandthesustainableuseofnaturalresourcestoassurethelong-termsuccessofourbusiness.
ValueforsocietyOurmajorinvestmentsinruralareashelpworkersacquirenewskillsandhigherincome,developlocalsuppliersandentrepreneurs,andraiseenvironmentalstandards.
TheNestléCreatingSharedValueReportManufacturingandourenvironmentalfootprintNestléfactoriesareamajorengineofruraldevelopmentandofnewenvironmentalqualitystandards,particularlyindevelopingcountries.
Nestléhasmademajorstridesinreducingenvironmentalimpact,thushelpingtoreducecostsandultimatelyimprovingprotabilityandlong-termsustainability.
CreatingSharedValueOpposite:Watertreatmentplant,Agbara,Nigeria.
Nestléinvestsinwatertreatmentplantsindevelopingcountriesevenwhenthereisnolegislationbecausemaintaininggoodwaterqualityintheareassurroundingourplantshasdirectbenetsforourbusiness.
ThisplanthasservedasamodelforanothertreatmentplantinTema,Ghana11Manufacturingandourenvironmentalfootprint12TheNestléCreatingSharedValueReport18%ProportionoffactoriescertiedtoISO14001and/orOHSAS18001TheglobalcontextOurprincipleistomanufacture,whenpossible,incountriesfromwhichwesourcecommodities,ratherthantoexporttherawmaterials.
Regionalmanufactureforregionalmarketsmeansourproductshavefewermilestotravel,resultinginlowertransportationcostsandlessenvironmentalimpact.
Today,abouthalfourfactoriesareinthedevelopingworld,locatedprimarilyinruralareas,reectingourlong-termapproachtoinvestmentandourabilitytooperateindiverseandcomplexenvironments.
Forexample,NestléhasoperatedinSouthAfricasince1927andinBrazilsince1921.
AndwecontinuetomanufacturecoffeeinCted'Ivoiredespitethesporadicviolenceandcivilunrestthereoverthelastfewyears.
AmongNestlé'smajorindustrialinvestmentsindevelopingcountriesin2007were:Pakistan:Theworld'slargestmilkprocessingplantinKabirwala.
Investment:CHF90million;Brazil:PopularlyPositionedProductplantinFeiradeSantana,Bahiaprovince.
Investment:CHF60million;China:MilkprocessingplantinHailar,InnerMongolia.
Investment:CHF20million.
Allthesefacilitieshavebeenequippedfromtheirinceptionwithup-to-dateenvironmentaltechnologies,suchasplantstotreatthewaterusedinmanufacturingprocessesbeforereturningitcleantotheecosystem.
Ourkeyenvironmentalfocusareasarewater,energyandpackaging.
Aswellasmanagingtheseareasholisticallythroughoutourbusiness,weareincreasinglyworkingalongthewholevaluechaintopositivelyinuencehowtheyareaddressedbeyondouroperations.
Thishelpstoimprovequality,reliabilityandcostsfromfarmtofork.
Forfullcoverageofallenvironmentalperformanceareas,includingtransportationandrefrigeration,pleasevisitwww.
nestle.
com/csv/environmentEnvironmentalmanagementWehaveinvestedsignicantresourcesintheNestléEnvironmentalManagementSystem.
NEMShelpsensurecompliancewithlegislationandwiththeNestléPolicyontheEnvironment,helpsNestlétoachievecontinuousperformanceimprovementandcontributestowardssustainabledevelopment.
Inaddition,weareseekingexternalcerticationsforallourfactoriesinlinewithISO14001,theinternationallyrecognisedenvironmentalmanagementsystemstandard.
Thisprovidesacommonlanguageandenablescompliancetobedemonstratedmoreeasilytoourstakeholders.
18%ofourfactoriesarecertiedtoISO14001and/orOHSAS18001.
Weaimtocertify100%ofourfactoriesby2010.
84%ofourfactorieshavebeenauditedwithinthescopeofourCAREprogramme.
EstelleKouadioworksinNestlé'sMaggifactorynearAbidjan,Cted'Ivoire,wherewehavecontinuedouroperationsdespiteseverecivilunrestinrecentyears13Manufacturingandourenvironmentalfootprint*Nestlé'soverallscoreintheInsightCarbonAssessmentwas57%ReducingourcarbonfootprintNestlé'sdriveforimprovedenergyefciencyhasadirectpositiveimpactonourgreenhousegas(GHG)emissions.
AdditionalreductionofGHGemissionsisachievedthroughanumberofourfactoriesswitchingtocleanerfuelssuchasnaturalgas.
NestléhasreducedGHGemissionsby17.
3%since2003.
Wearecommittedtocontinueourestablishedtrackrecordofimprovementfortheforeseeablefuture.
Alongwithover2000oftheworld'slargestcompanies,NestléparticipatesintheCarbonDisclosureProject(CDP),inordertoshareourstrategyandresults.
Thisispartofourongoingefforttoenableourperformancetobebenchmarkedanddrivefurtherimprovements.
WearealsoamongasmallnumberofcompaniesparticipatinginaCDPtrialtoraiseawarenessamongsuppliers.
Weareleadingthispilotinourownsupplychaintoinspireperformanceimprovementsandhelpaddresstheissueofefciencyandenergysavingsbeyondourownoperations.
InsightInvestment,theassetmanagerofmajorinstitutionalinvestorHBOSGroup,gavea100%scoretoNestléforgovernanceofcarbonissues.
*Wehavealsobeenidentiedasthemostcarbon-efcientcompanyamongtheDowJonesStoxx600foodproductscompanies,onthebasisofdirectGHGemissionsperrevenue(MerrillLynch,CarbonLeaders:QualityWin-WinStocks,31August2007).
Werecognisetheneedtocontinueworkingwithotherstoimplementourstrategyworldwide.
Recentprogressincludes:GGeneratingenergyfromthecombinedproductionofsteamandelectricity(co-generation),whichimprovesenergyefciencyandreducesgreenhousegasesemitted;GMethanerecovery(methanisation).
Weincreasinglyrecovermethanegasgeneratedfromourwatertreatmentplantsandweuseitasafuel.
InourShimadafactoryinJapan,forexample,thishasresultedina38%reductioninGHGemissions.
403NumberoffactoriesauditedwithinthescopeofourCAREprogrammeAttheNestléProductTechnologyCentreinBeauvais,France,weareworkingwithpartnerstodevelopcommercialice-creamfreezersusingnaturalrefrigerantsandothernewcoolingtechnologiesthathavelowenergyconsumption,noeffectontheozonelayerandareinherentlysafeinpublicuse14TheNestléCreatingSharedValueReportNestlé'sstate-of-the-artmilkfactoryinHailar,InnerMongoliawasopenedinJuly2007withaninvestmentofoverCHF20million.
SinceNestlébeganinvestinginChinatwodecadesago,wehaveopened21factoriesandtodayemployabout13000people.
Nestlébuysfreshmilkfromsome40000ChinesefarmersandprovidesthemwithanoverallregularincomeofaroundCHF500000perday,fosteringruralsustainabledevelopmentforthecommunitiesconcerned.
Atleast200000peoplebenetdirectlyandindirectlyfromNestlé'smilkactivitiesinChina.
HailarwasoneofthreemajorNestléinvestmentsinruralregionsin2007,theothersbeinginPakistanandBrazilIndustrialinvestments:Hailarmilkprocessingplant,China15ManufacturingandourenvironmentalfootprintCo-generationplantatMainzcoffeefactory,Germany,wherespentcoffeegroundsareusedasfuelIntegratingCSRconcernsintoacompany'sstrategy–insteadofconsideringthemmerelyasadd-ons–iscentraltoimplementingthisconceptmeaningfully.
Fordevelopingcountries,thisalsomeansgivingspecialattentiontodevelopmentalconcerns,suchasupgradinglocalsuppliers,trainingandtransferoftechnology.
NestléiscertainlytakinganumberofexemplarystepsinthisdirectionKarlP.
Sauvant,Ph.
D.
,ExecutiveDirector,ColumbiaProgramonInternationalInvestment,andCo-Director,MillenniumCitiesInitiativeSource:Nestlé*109Joules(GJ)pertonneofproductEnergyconsumption,2003-2007*3210200320042005200620072.
832.
732.
212.
422.
08Wehavereducedourenergyusageby3%from1998to2007whileinthesameperiodincreasingourproductionvolumeby76%.
Ourobjectiveistoachieveannualenergysavingsof1%-2%pertonneofproductoverthenextveyearsWehavealsorecentlyalignedourreportingofGHGstointernationallyrecognisedstandards(GreenhouseGasProtocol,WBCSD/WRI2004)soastopresentanaccurateandconsistentaccountofouremissionsthroughtheuseofstandardisedapproachesandprinciples.
WeareamongtherstfoodcompaniestojointheGlobalReportingInitiativemulti-stakeholderprogrammetodevelopaglobalreportingstandardandindicatorsonsustainabilityinthefoodsector.
Nestléisalsoamong150companiescallingforacomprehensive,legallybindingUNframeworktotackleclimatechange,inacommuniquépublishedbyThePrinceofWales'CorporateLeadersGroupinDecember2007.
Formoreinformation,pleasevisitwww.
nestle.
com/csv/climatechangeImprovingourenergyefciencyNestléimprovesitsenergyefciency,savingaroundCHF33millionin2007throughtheseefforts,mitigatingtheimpactofsoaringenergyprices.
Inaddition,wealsouserenewableenergysources,suchascoffeegroundsgeneratedinourcoffeefactories,toreduceourrelianceonnon-renewablefuels.
Nestléinvestssignicantlyinraisingawareness,trainingandtechnicalimprovements(approximatelyCHF40millionannually).
16TheNestléCreatingSharedValueReportAquapodisaninnovativeformofpackagingthatappealstochildren,encouragingthemtochoosewaterinpreferencetosweetenedsoftdrinksWaterwithdrawalversusproductionvolume,1998-2007*1998199920012002200020032004200520062007200180160140120100806040200%ProductionvolumeWaterwithdrawalSource:Nestlé*Relativetoindex1998Since1998,Nestléhasincreaseditsfoodproductionvolumeby76%.
Overthesameperiodwehavereducedourwaterwithdrawalby28%.
Weaimtoreduceannualconsumptionpertonneofproductfurtherby2%-3%overthenextveyearsReducingourwaterconsumptionWearecommittedtobecomingthemostefcientwateruseramongfoodmanufacturers.
Reductionofwaterconsumptionhasbeenpartofmanagementpracticeatplantlevelformanyyears.
Aformalised,company-wideeffortinitiatedin1997hasachievedfurthersignicantefciencies.
NestléWatersistheworld'sbottledwaterleaderbutwithdrawsaverysmallpercentageofglobalfreshwaterusageannually.
TotalvolumeswithdrawnbyNestléWatersrepresentnomorethan0.
0009%ofallwaterwithdrawnbyhumans.
Morethanhalfofthiswatergoesdirectlyintothe72bottledwaterbrandswesellworldwideandquantitieswithdrawnarestrictlyalignedwithbottlingunitneeds.
Therestismainlywaterusedforoperationalprocessesandcleaning.
Theamountofadditionalwaterweneedtoproduce1litreofbottledwateriscurrently0.
81litres.
Throughrigorouspracticesintheproductionprocess,thisrepresentsareductionofaround34%over6years.
Bottledwater,healthandenvironmentThereisgrowingconsumptionofbottledwater,andlevelordecreasingconsumptionofsugaredsoftdrinks.
Thisispositiveforhealth,butdoesthisgrowingconsumptionofbottledwaterhaveanegativeenvironmentalimpactNestléWatersstrivestobearesponsiblewateruser,workinginlinewithlocalregulationaswellasourownbusinessstandards.
Adedicatedteamofhydrogeologistsprovidesadviceandmonitorsthewatersourcestoensuregoodstewardship.
Thisisbothforthebenetofsociety,andforNestlétobeabletosustainalong-term17ManufacturingandourenvironmentalfootprintSource:Nestlé*TonnesChemicalOxygenDemand(COD)Organicloadinwastewater,2007*12000090000600003000001075006250BeforepurificationAfterpurificationTreatedwaterleavingNestléfactoriesisreturnedcleanedtotheecosystem,containingreducedlevelsofCOD(ChemicalOxygenDemand,ororganicpollutioninwater)afterpuricationinNestléplantsbusiness.
Bottledwateralsousesfarlesswaterthanotherbottleddrinks.
70%oftheworld'swateriswithdrawnbyagriculture,whilebottledwaterusesverylittle.
Transportationisanissuetobeaddressed,andweareworkingtoshortenthedistancefromsourcetoconsumer.
Regardinguseofplastics,Nestléhasdevelopedthelightest-weightbottleintheindustry,whichisalsotwiceaslightassoftdrinkbottles.
Theissueofwasteproducedbydiscardedwaterbottlesispartofawiderproblemthatonlyrecyclingwillsolve.
Whilewaterbottlesmakeuplessthan1%ofrefuseinpublicdumpsintheUSA,plasticbottlescanberecycled,meltedandreused.
Nestlésupportsawidevarietyofrecyclinginitiatives,includingtherecentNewYorkmarathon,whereweworkedwiththeNewYorkRoadRunnerstorecycleallthe75000containersusedtoprovidewatertothecompetitors.
Butmuchremainstobedoneinrecyclingofalltypesofrefuse,whichmustbetackledasanintegratedsystem.
Inthemajorityofplaceswherewesellbottledwater,mostconsumersalsodrinktapwater.
However,theconvenienceofchilledwaterinabottlecontinuestobeincreasinglydemandedbyconsumersandpreferredtosoftdrinks.
ReturningcleanedwatertotheecosystemOurrstobjectiveistominimizethevolumeofwaterusedinouroperations.
Secondly,wecontinuetoinvestinplantstotreatwaterafterithasbeenusedinmanufacturing,returningcleanedwatertotheecosystem.
Wedecreasetheorganicburdentotheenvironmentbytreatingwatertoremovethevastmajorityoforganicpollutants.
AttheGerberbabyfoodfactoryinFremont,Michigan,waterusedinprimaryplantprocesses(suchaswashingrawmaterials,pictured)isrecycledforsecondaryuses(forexample,washingoordrains).
Itisthenpiped4milesdowntheroadtotheGerber450acrefarmtoirrigatecropsthataregrowntoproduceanimalfeedforlocalfarmers18TheNestléCreatingSharedValueReportOptimizingpackagingPackagingisessentialforfoodsafetyandfreshness,anditalsoprovidesconsumerswithnutritionalandenvironmentalinformationatpointofpurchase.
Nestléhasadoptedanintegratedapproach:reducingmaterialsusedwherefeasible;providingmeaningfulinformationtoconsumersaboutrecyclingandrecovery;developingrecyclablepackagingfromrenewableresources;andsupportingthedevelopmentofpublicrecyclingschemes.
Wehavereducedthevolumeofpackagingmaterialusedperlitreofbottledwaterby22%overthelast6years,saving257000tonnesofpackagingmaterial.
Wealsocontinuetodevelopinnovativepackagingmaterials.
WeweretherstcompanyinEuropetointroducePlantic,abiodegradablealternativetoplastic,madefromrenewableresources,forpackagingmanufacturedfoodproducts.
Left:KhunTaleungkietattheChachoengsaocoffeefactoryinThailand,testingthequalityofwaterthathasbeentreatedforre-use.
Itisourrst"zerowaterdischarge"factorythatrecyclesalmostallwater,eitherincoolingtowersorforirrigationofanadjacentcoffeenurseryKeychallengeSustainablewateruseAspopulationsriseandstandardsoflivingimprove,demandforfreshwaterisforecasttoincrease.
Over1billionpeoplecurrentlylackaccesstowaterandover2.
4billionlackaccesstobasicsanitation.
Nestléneedsaccesstocleanwatertoconductitsbusiness,consumersneedittopreparemanyofourproducts,andoursupplychainpartnersneedittoproducetheagriculturalrawmaterialswerelyon.
OurresponseWehavereducedwaterwithdrawalinourdirectoperationsby28%since1998.
Atthesametimeourproductionvolumehasincreasedby76%.
Aswellasmanagingourdirectwaterconsumption,weareincreasinglycontributingtoimprovingthemanagementofwateroutsideourdirectoperations.
WesupportProjectWET,aneducationprogrammepromotingwaterstewardship.
Since1992thishasreachedseveralmillionchildreninover20countries.
Agriculturewithdrawssome70%ofavailablefreshwatergloballysoweareincreasinglyworkingtohelpoursupplychaintoimprovetheirpracticesthroughourextensivenetworkofagriculturaladvisers(seeAgricultureandruraldevelopmentsection).
AsafoundingsignatoryoftheUNGlobalCompactCEOWaterMandateinJuly2007,Nestléhasalsoinvitedbusinessleaderstoaddresstheglobalchallengeofwateraccessandscarcity.
Readmoreatwww.
nestle.
com/csv/water19ManufacturingandourenvironmentalfootprintCHF583.
7millionCostsavingsfromoptimizedpackagingvolumesover16yearsCommunicatingenvironmentalinformationonourpackagingWeprovideourconsumersandbusinesspartnerswithclear,accurateenvironmentalinformationbasedonscienticevidence.
Differentmeansexisttocommunicatethisinformationefciently.
Oneoptionisthepackagingitself.
Forexample,ournewNaturNesbabyfoodpotshowsthatitrequireslessenergyandproducesfewerCO2emissionsthanthepreviousversion–overitslifecyclefromfarmtospoonandincludingrecoveryofpackaging.
Thisresultsfromtheweightreductionachievedbyreplacingaglassjarwithaplasticpot,aswellasenergysavingsfromthenewmanufacturingprocessandtheenergyrecoveredfromusedplasticpots.
IthasbeensubstantiatedbyaLifeCycleAssessment,whichfollowsthelatestmethodsestablishedininternationalstandards(ISO14040:2006andISO14044:2006)andhasbeenreviewedbyapaneloffourexternalexperts.
Formoreinformation,pleasevisitwww.
nestle.
com/csv/packagingLookingaheadWewillcontinuetodevelopourenvironmentalmanagement,withafocuson:Maintainingcontinuousimprovementsinourenvironmentalperformance;EncouragingourbusinesspartnerstoapplyenvironmentalmanagementsystemsbasedontheISO14001internationalstandardintheirownoperations;Communicatingreliableenvironmentalinformationtoconsumersinameaningfulandstraightforwardway.
Aboveleftandabove:NaturNesbabyfoodbeingmicrowave-testedattheNestlétechnologycentreinSingen,Germany,toconrmtheoptimumsettingsandmethodsforuniformheatingoftheproductbyconsumers.
Informationonproductuseandpackagingrecyclingiscommunicatedclearlyon-packLookcloser@nestle.
comWatchavideoonenergyefciencyin4Ccoffeeproductionatwww.
nestle.
com/csv/stories20ValueforNestléBymaximizingtheperformanceofourpeopleandensuringtheyhavethemotivationandskillstoperformtotheirfullpotential,weachievesuperiorbusinessresultsandfuturesustainablegrowth.
ValueforsocietyNestléoffersemploymentopportunitiesworldwide,providingthepotentialforabetterstandardoflivingandself-development.
TheNestléCreatingSharedValueReportOurpeopleLong-terminvestmentsintraininggivepeoplebetterjobopportunitiesandincreasedincome,andprovideNestléwithaskilledworkforcetomanufacturefoodproducts.
Ourprincipleisthateachemployeeshouldhavetheopportunitytodevelophisorherpotentialinasafeandfairworkplacewheretheyarelistenedto,respectedandvalued.
Opposite:WorkplacesafetyatNestléisnon-negotiable.
WhetherworkingattheNestléShuangchengmilkfactoryinChinaoratourotheroperationsworldwide,thesameuniversalstandardsofsafetyareappliedCreatingSharedValue21Ourpeople22TheNestléCreatingSharedValueReportSource:Nestlé*PermillionhoursworkedTotalInjuryRateandLostTimeInjuries,2003-2007*20151050200320042005200620079.
712.
219.
618.
67.
54.
87.
09.
110.
63.
7TotalInjuryRateLostTimeInjuriesIntheperiod2003-2007,thenumberofinjurieswithtimeawayfromworkpermillionhoursworked(foremployeesandcontractors)reducedby65%.
Ouraimfor2008andsubsequentyearsistocontinuetoreduceinjuriesby10%ormoreeveryyearTheglobalcontextNestléhasastrongcorporateculturewhichunitesmorethan275000peoplefromover100countries.
34.
5%ofourworkforceisinEurope,38.
3%intheAmericasand27.
2%inAsia,OceaniaandAfrica.
Aroundhalfofouremployeesworkindevelopingcountries,withahighproportionemployedintheircountryoforigin.
InAfrica,forexample,onlyapproximately3%ofourworkforceisnotoriginallyfromthatcontinent.
Alsoofhighimportanceistheindependentauditprogramme,CARE,whichreviewsNestlé'scompliancewithourCorporateBusinessPrinciples(availablefordownloadatwww.
nestle.
com/csv/downloads)intheareasofhumanresources,safety,healthandenvironment,includingcompliancewithlocallaws.
AfairworkplaceNestléhasastrongmanagementframeworkwhichguidesemployeerelationships.
PrinciplesarelaiddownintheCorporateBusinessPrinciplesandHumanResourcesPolicy,withguidelinesadaptedtolocallawsandnorms.
ItisourpolicytoabidebynationallawsinallcountriesinwhichwehaveoperationsandtocomplywiththeILOconventionsonchildlabourandfairemployment.
HealthandsafetyatworkTheNestléOccupationalHealthandSafetyManagementSystem(NSMS)wasrevisedinlinewiththe2007editionoftheinternationalstandardOHSAS18001andreissuedtoallNestléoperations,reinforcingourcommitmentthat"Safetyisnon-negotiable".
WearealsoworkingtowardsexternalcerticationofourfactoriesagainstOHSAS18001.
Thiswillprovideacommonlanguagearoundourhealthandsafetymanagementsystems,andmakeiteasiertodemonstrateimplementationofthesestandardstoourstakeholders.
Despiteourcontinuouseffortstopreventaccidentsandfosteracultureofsafety,wedeeplyregretthattherewere15fatalitiesin2007duetoaccidentswhileatwork(11employees,ofwhich8weretrafcaccidentsoffsite–ofteninchallengingruralareaswithpoorandlimitedinfrastructure–and4contractors).
AkeyrequirementofNSMSistoensurethatBehaviour-BasedSafety(BBS)isinplaceinallourfactoriesanddistributioncentres.
Nestlé'sBBSprogrammeconcentratesonawareness-raisingandpersonalandinterpersonalresponsibilityforsafetyandiscriticalinreducingaccidents.
Inadditionandinrecognitionoftheemployeedeathsduetotrafcaccidents,amajorfocusonroadsafetywillcommencein2008tohelpminimizevehicle-relatedaccidents.
276050NumberofemployeesworldwideNestlédependsonaskilledandmotivatedworkforceforcontinuedsuccess.
MechanicFrankMcClammaandmachineoperatorLeconyaRhymattheNestléWatersfactoryinMadison,Florida,manufactureAquapod,aninnovativeconceptinencouragingchildrentodrinkwaterinpreferencetosweetenedsoftdrinks23OurpeopleNguyenThanhTuaánandNguyenVaênTuanattheDongNaifactoryinVietnam,keepingtintheirlunchbreakbyplayingtabletennis.
Nestlérunswellness-at-workprogrammesworldwideListeningandrespondingtoemployeeviewsBusinessesthroughoutNestlélistenandrespondtoemployees.
Nespressogloballyconductedanindependentsurvey,whichprovidedconstructivefeedbackfromemployeesonarangeoftopics.
AclearndingwasthatNespressoemployeeswantedthebusinesstotakeafreshlookatinternalcommunication.
Nespressorespondedrstlybyrunningstructuredworkshopstohelptranslateopinionsintoaction.
Variousinitiativeswereimplementedasaresult.
Theserangefromnewopportunitiestomeetandshare("mysterylunches"andmonthlydepartmentalNestlé'scompliancewithlocallawsandwithourCorporateBusinessPrinciplesisveriedthroughCARE,ourindependentauditprogramme,whichcoversareasofhumanresources,occupationalhealth&safetyandenvironment.
Forenvironmentalperformance,seetheManufacturingandourenvironmentalfootprintsectiononpages10-19;foroccupationalhealth&safety,seethegraphontheoppositepage.
Nestlérespectstherightofemployeestoformrepresentativeorganisationsandtojoin(ornottojoin)tradeunions,providedthisrightisfreelyexercised.
ItisourpolicytogoverntherelationshipwithunionsinaccordancewithnationallawsandthepracticesoutlinedintheNestléCorporateBusinessPrinciples.
ThereareCollectiveBargainingAgreementsin19developingcountries,covering39340employees.
KeychallengeEmpoweringhigh-performingteamsWithindiversied,decentralisedoperationsinemergingaswellasdevelopedeconomies,ourkeychallengeistocontinuouslybuildlocalcapacity,expertiseandleadershiptoraisestandardsacrosstheboard.
OurresponseNestlécontinuouslypromotesacultureofengagementandperformanceandstrivestowardsbestpractice.
Forexample,wehaveintroducedMissionDirectedTeams(MDTs)inanumberofouroperations.
EachMDTisamini-businessfocusedondeliveringhigh-qualityproductsandservicestootherinternalMDTs.
Earlyresultsfrompilotsinourmanufacturingplantsshowvaluebeingdeliveredthroughefciencygains,higherlevelsofengagementandserviceimprovements.
Forexample,MDTmadeasignicantcontributioninBlacktown,Australia,wherepastresultshaveshowncustomercomplaintsfallingby33%onprioryear(akeyfocuswasproductqualityissues),andabsenteeismreducedby6.
5%tobelow3%ofhoursworked.
24TheNestléCreatingSharedValueReportWeneedtomaintainaglobalpipelineoftalentedpeoplewhocanhelpuskeepourcompetitiveadvantageandachievesustainablegrowth.
Wehave917globalKeyBusinessPositionsandhave,in2007,identiedaround3000currentemployeeswhohavethepotentialtolltheseandotherkeypositions.
Otherkeystatistics:ForeveryglobalKeyBusinessPosition,therearemorethantwosuccessorsonaverage;24%ofleadershippositions(denedashavingpeoplemanagementresponsibilities)areoccupiedbywomen.
Withmanufacturingprocesses,headquarteroperationsandR&Dcapacitystructuredtobuildsignicantlocalpresences,Nestléreliesoncompetentlocalworkforcesandleadership.
42%ofLocalManagementCommitteemembersindevelopingcountriesarenativetothatdevelopingcountry.
DevelopingfutureleadersNestléemployeesundergoingintensivetrainingcoursesattheRive-ReineInternationalTrainingCentre,Switzerland25OurpeopleByinvestinginsafeworkplaces,andempowered,well-trainedandprofessionallydevelopedpeople,businessesatoncecreateincreasedproductivityandloyaltyforthemselves,butalsoenhancethelocaltalentpool.
ThisphenomenonisespeciallyacuteindevelopingcountriesandisevidentinparticularforlargecompanieslikeNestléwhoareintegratedintodevelopingcountrysocietiesRobGoffee,ProfessorofOrganisationalBehaviour,LondonBusinessSchoolmeetings)toimprovedinformationsources(intranetandpublicationslibrary).
Inadditiontobusiness-specicsurveyslikeNespresso's,Nestléisconductingaglobalemployeesurvey.
Thisiscurrentlyunderway,andwewillbeabletoreportonitinfuturepublications.
SupportingemployeesthroughbusinesschangesInMarch2004,NestléPurinaPetCare(NPCC)announcedtheintentiontoclosetheirpetfoodcanningfactoryinBarrhead,Scotland,duetothecontinuingdownturninthecannedpetfoodindustry.
Theageandlayoutofthefactoryruledoutanypotentialupgradetodryorfoil-sealedpetfoods.
206peoplewereemployedatthefactory.
NPCCformedaresettlementteammadeupofmanagementandunions,whichworkedinclosepartnershipwithlocaljobandtrainingagencies.
Employeesweresupportedwithjobsearchservices,CVpreparation,careersandtrainingadvice,ajobsfairandpensionadvice.
197oftheformeremployeesrespondedtoapost-closuresurvey.
85%ofrespondentshadusedtheservicesprovided.
96%ratedoutof10(mostpositive)theservicesat5orabove.
62%ofrespondentswereinworkapproximatelythreemonthsafterexitfromtheplant,withonly7%stillactivelyseekingemploymentatthetimeofthesurvey.
Othersspecied"takingabreak","stillwithCompany"and"Further/HigherEducation".
BuildingourcapabilitiesWeneedtobuildthecapabilitiesrequiredforshort-andlong-termsuccessthroughon-the-jobexperience,coachingrelationshipsandoff-the-joblearning.
In2007,65647employeesin33developingcountriesreceivedformalclassroomtraining.
26ValueforNestléByengagingcloselywiththecommunitiesthatsupplyuswithagriculturalcommodities,webenetfromamoresecuresupplyofbetterqualityrawmaterials,whichlowersourprocurementcosts(duetofewermiddlemen,fewerdefectsandreducedwaste),andresultsinbetterendproducts,helpingtoensureconsumerpreferenceandprotablegrowthforourbrands.
ValueforsocietyThousandsoffarmersuseouradviceandtechnicalassistancetoproducegreateryieldsofhigherqualitycropsusingfewerresources,whichbenetstheenvironmentandincreasestheirincome.
Ruralcommunitiesalsogainfromwideremploymentandeconomicdevelopmentopportunities.
Consumersalsoknowtheproductstheybuyaresafe,ofhighqualityandproducedusingsustainableagriculturalpractices.
TheNestléCreatingSharedValueReportAgricultureandruraldevelopmentNestléspendsapproximatelyCHF13billionayearonagriculturalmaterialssuchasmilk,coffeeandcocoa.
So,althoughwedonotownanyagriculturallandoroperatecommercialfarmingactivities,weseektoimprovefarmers'livingstandards,environmentalpracticesandwaterusage.
ThisgivesNestléaccesstohighqualityrawmaterials.
Opposite:MrsAssoKof,ownerofacassavaplantationfromwhichNestlépurchasessupplies,withPondoKouamé,headofNestléagriculturalservicesinCted'Ivoire.
NestléissupportinggovernmentandUNeffortsinWestAfricadesignedtoincreasethequantityandqualityofproduction,ascassavaplaysavitalroleinemploymentofAfricanfamersandinfeedingmillionsofpeoplethroughoutthecontinentCreatingSharedValue27Agricultureandruraldevelopment28TheNestléCreatingSharedValueReportZhengjunWang,whoownsninecowsandsixcalves,hasbeensupplyingmilktotheNestléplantinShuangcheng,North-EastChina,since1990.
ANestléprojectinthemilkdistrictnowprovidesfarmerswithpropermanurestoragefacilities,whichreducesimpactonwatersourcesandalsocreatesabiogasenergysourceforfarmers'homesTheglobalcontextTheworldcurrentlyfacesthreemajorissuesthatparticularlyinuencethefutureofourbusinessandourindustry.
Theyare:ThegrowingdemandforfoodincountrieslikeChinaandIndiabecauseofimprovingfamilyincomes;Thegrowingscarcityofwaterglobally;Thecontinuedpoverty,illhealthandlackofpurchasingpowerofover2billionpeopleinruralareas.
Theproblemofwaterscarcitymustbeaddressedwhileincreasingproductionoffood,andatthesametime,wemustworktobringruralcommunitiesintothecasheconomywithadequateaccesstonutrition,waterandsanitation.
RuraldevelopmentNestléhasalonghistoryofhelpingfarmerstobebetterandmoreprosperoussuppliers.
Thishasapositivelong-termimpactoneconomicandenvironmentaldevelopmentandstandardsofliving,sometimeshelpingentireregionstoincreaseagriculturalproductivityandeconomicperformance.
Thisoftenbeginsbyhelpingfarmersthroughagriculturalprogrammesthatsharegoodenvironmentalandwatermanagementpractices.
hundredsoffarmersinnorthernThailandtogrowArabicacoffee.
Theyreceivepracticaltrainingoncoffeefertilisation,irrigationandharvestingtechniques,whichhelpstheircoffeetocommandahigherprice.
WehavetakenasimilarapproachinYunnanProvince,China,whereNestléhassetupatrainingcentre,demonstrationfarm,nurseryandbuyingstation.
Ourteamof675agronomistsandapproximately5000extensionworkersandcontractorscurrentlyofferssupportandtrainingassistanceto111800farmersvia28projectsin21countriesaswellasmaintainingongoingdialoguewithtraders,governmentsandNGOpartners.
TherearenoconditionsattachedtotheassistancewegiveandfarmersarenotobligedtoselltheirproducetoNestlé.
Suchprojectssecuresuppliesofhigher-graderawmaterials,whichensurewecanmaintainproductionofhigh-qualityendproducts.
Forexample,Nestlé'sDoiTungExperimentalandDemonstrationFarmhelps29AgricultureandruraldevelopmentMorethan4000womeninPakistanarelearningnewagriculturalskills,suchasraisinglivestockandmanagingwaterresources,throughtrainingprovidedbyNestléUnitedNationsDevelopmentProgrammePartnershipAjointprogrammebetweentheUNDP,NestléPakistanandEngroFoodshastrained4000womenagriculturaladvisers,whoseassistanceandadviceishelpingtoincreasemilkproductionamongdairyfarmersinruralPakistanwhosupplyfreshmilktoNestlé.
Tobuildcondenceinthemilktrade,NestléIndiaestablishedwell-equippedmilkcollectioncentres,anditseldstaffprovidefarmerswithtechnicalassistanceandadviceaboutanimalhealth,breedingandfodderproduction.
Thishashelpedtoraisethequalityandvalueofthemilkproducedby85000farmers,and,webelieve,improvedthehealthandeconomyofthelocalcommunity.
NestléisalsoworkingwithschoolsandlocalassociationstoimprovedrinkingwaterandtoiletfacilitiesinschoolswithinthemilkdistrictservingtheMogafactory,whileanotherprojecthelpstofundmedicinesforalocaltuberculosisclinic.
SourcingproleNestlébuysCHF8billionofagriculturalcommoditiesfromemergingeconomieseveryyear–aroundtwo-thirdsoftheCompany'stotalexpenditureonrawmaterials–andnearly40%goestowardsthreekeycommodities:milk,coffeeandcocoa.
Overhalfamillionfarmers(610000)supplyNestlédirectly.
EachofthekeyregionsfromwhichNestlésourcesitsproductshasitsownpolitical,socio-economicandenvironmentalconditions,butNestléworkstoprotectthesecurityofitssupply,thequalityoftheresourcesavailable,andruralemploymentanddevelopment.
Forexample,soilerosioncanbeachallengeinmountainouscountrieswithheavyrainfalllikethePhilippines.
Nestlé'sagriculturalexpertshaveworkedwiththeMinistryofAgricultureandlocalcoffeefarmerstoimplementtheSALT(SlopingAgriculturalLandTechnology)programme.
Byplantingalongcontourlinesandusingvetivergrasstobindthesoil,erosionhasbeenreducedbyupto90%,soilfertilityhasimprovedandcropyieldsincreased.
KeychallengeBiofuelsInadditiontobeingasourceoffood,somecropssuchasmaizeandwheatcanalsobegrownasasourceofenergy.
Such"biofuels"areconsideredbysometobealong-term,low-carbonenergyoption.
Nestlébelievesthatdecisionsaboutenergysourcesmustbebasedoncost–benetandlife-cycleanalysis,andshouldconsidertheirfullsocialandenvironmentalimpact,includingtheeffectsonfoodpricesandwater.
Currentbiofuelproductionhascontributedtosignicantpriceincreasesandislikelytoeventuallycreatefoodshortagesformillionsoflow-incomeconsumers.
Agriculturealreadywithdraws70%ofavailablewatersources,andwitheverylitreofbiofuelfromirrigatedmaizeorsoybeansrequiringupto5000litresofwatertoproduce,anylarge-scaleexpansionwillmakewaterevenmorescarce.
Furthermore,dependingoncroptypeandlocation,greenhousegassavingscomparedtofossilfuelcanactuallyincreaseinsomecases.
30TheNestléCreatingSharedValueReportFoodbusinessesinparticularhaveasignicantinterestinenhancingagriculturalproductivityandsustainability.
Worldpopulationisrisingrapidly,andfortunatelymoreandmorepeopleareemergingfrompoverty.
Theyaredemandingmoreandbetterfood,creatinggreatopportunitiesforfarmersandthefoodindustry.
Thechallenge,though,istomakesurethisdemandcanbemet,notjusttodayandtomorrow,butinthelongrun–inspiteoftheworld'slimitedresourcebase.
Andnowhereisthismoreevidentthanintheareaofwatersecurity.
Companiesthatactivelyengageinhelpingagriculture–asthebiggestwateruser–enhancesustainablewateruse,areinvestingintheirownsupplychainsecurityProfessorStefanTangermann,DirectorforTradeandAgriculture,OECDNestlésourcingprole,2006MilkCoffeeCocoa*11850000tonnesCHF4000million750000tonnesCHF1600million370000tonnesCHF930millionOther:fruit,vegetablesandcerealspartlysourceddirectlyfromfarmers;sugar,oil,meat,spicesandotheringredientssourcedthroughtrade*Cocoabeans,powder,butterandliquorSource:NestléMilkNestléistheworld'slargestmilkcompany,sourcing11.
8milliontonnesofmilkfrommorethan30countries.
Butasrisingdisposableincomelevelsindevelopingcountriesleadtogreaterdemand,securingaplentifulsupplyoffresh,high-qualitymilkineconomicalandefcientwaysremainsachallenge.
Nestlé'sapproachincludesthedevelopmentofmilkdistricts,whichinvolvesregularpurchasingofmilkfromlocalfarmers,regardlessofhowmuchorhowlittletheyproduce.
Italsorequiresadaptingorinstallingcollection,storageandchillingfacilities,andarrangingtransportationtoalocalfactory.
Suchinvestmentsdemonstratetolocalcommunitiesthatwewillbethereforthelongterm.
Localcommunitiesalsobenetfrommuchmorethanjustamarketfortheirmilk.
TrainingisprovidedthroughNestléagronomistsandeldtechnicians,andsometimesinpartnershipwithalocalcollegeoruniversity.
Qualitycontrol,traceabilityandfoodsafetysystemsarealsoputinplace,nancialsupportisavailable,andfarmersareassuredregularpaymentatafairprice.
Nestlé'smilkdistrictmodel,introducedinSwitzerlandinthe1870s,hasbeenreplicatedandadaptedforuseinLatinAmerica,theCaribbean,AsiaandAfrica–andmostrecentlyinInnerMongolia.
Onaverage,milkdistrictsaregrowingby2–5%annually,andsomebyasmuchas10%,generatingmillionsofdollarsintoruraleconomieseveryyear.
Caquetá,apoorandsparselypopulatedregionofColombiawithover1000000hectaresofgrazingland,ishometoaNestlémilkdistrict.
Overthelast30years,Nestléhasinstalledthreeplantsand220coolingstations,andregularlyprovided2800farmerswithtechnicaladviceonanimalnutrition,farmdevelopmentandroadconstructiontoimprovethequantityandqualityoftheirmilk.
31AgricultureandruraldevelopmentCoffeeCoffeeisthesecondmosttradedcommodityintheworldafteroil,andgrowsbestwithinthe"coffeebelt"betweenthetropicsofCancerandCapricornthatspansLatinAmerica,AfricaandAsia.
Formanycountries,coffeeisavaluableexport,andforsomecommunities,itscultivationistheprimaryeconomicactivity.
Thecoffeesupplychainisextremelycomplex,with80%offarmersoperatingassmallholderswithafewhectaresoflandorless.
Around25millionsmallholdersdependdirectlyoncoffeefarmingfortheirlivelihoods,andafurther100millionpeopleareinvolvedintheindustryasawhole.
Incoffee-producingcountrieswherewehavefactories,ourdirectbuyingsystemallowsfarmerstodelivercoffeedirectlytoourbuyingstations.
Nestlé'ssevenbuyingstationsinsouthernThailand,forinstance,receivecoffeefromabout20000farmerswho,byavoidingintermediaries,receiveahigherprice.
Nestlépurchased750000tonnesofgreencoffeein2006,about13%ofitdirectlyfromfarmers,makingustheworld'slargestdirectpurchaser.
NestléalsoofferscoffeeswhichareFairtradecertied(orothercertiedcoffees),whereconsumerorretailcustomerdemandissufcient.
NescaféPartners'Blendisoneexample.
NespressoAAASustainableQualitycoffeeOnlyabout2%oftheworld'sspecialitygradecoffeesmeetthespecicproleofNespresso'sGrandsCrus.
Sotoensureaconsistentsupplyinthefuture,weencourageandrewardfarmerswhogrowsuchgrades,developinglasting,mutuallybenecialrelationshipsandimprovingtraceabilityinthesupplychain.
"AA"hasalwaysstoodforthehighest-qualitycoffee,butin2003,Nespressoincorporatedanadditional"A"forsustainability.
TheresultingNespressoAAASustainableQualityProgrammedrawsonourrelationshipswithsuppliersandpartnerstoensureourcoffeeisproducedtothehighestqualitystandardsbutalsoconsidersthesocialandeconomicvalueforfarmingcommunitiesanditsenvironmentalsustainability.
WorkingcloselywiththeRainforestAlliance,ourcommitmentincludes:PayingfarmersapremiumpricefortheirAAAcoffee;SettingoutthepracticesrequiredbytheAAAstandard;AnalysingthedatafromtheindependentvericationprocessconductedbyRainforestAlliance;Providingtechnicaltrainingandassistancetofarmers;Investinginwidercommunityprojects.
In2007,35%ofthetotalgreencoffeebeansNespressopurchasedcamefromfarmsintheAAASustainableQualityProgramme.
Thisisanincreasefrom25%in2006,andwehavecommittedtoincreasethisto50%by2010.
NestléagronomistsandColombianproducerssharebestpracticemethodsforcoffee-drying,justoneofthesustainableagriculturetopicsdiscussedaspartofaweek-longexchangeofideasandlearningundertheNespressoAAASustainableQualityProgramme97500Tonnesofcoffeesourceddirectlyfromfarmers32TheNestléCreatingSharedValueReportTheAAASustainableQualityProgrammehasbeenrolledoutinMexico,Guatemala,CostaRica,ColombiaandBrazil.
(Seewww.
nespresso.
comforfurtherinformation)InNovember2007,thesecondAAASustainableQualityCoffeeForumtookplaceinCostaRica.
(Readmoreatwww.
nestle.
com/csv/AAAforum)In2006,NespressoandTechnoServeinitiatedathree-yearsustainabledevelopmentprojectinCaldas,Colombia,tohelpcoffeefarmersimprovethequalityoftheircoffeeandtheiryields,andachievehigherpricesasaconsequence.
ThetotalinvestmentofCHF847000–includingCHF472000fromNespressoandTechnoServe–isbeingusedtoimprovefarmproductivity,establishapricingsystemandhelpbuildnewlaboratories.
By2011,theinvestmentisexpectedtohavegeneratedanadditionalCHF3.
5millionGDPintheCaldasregion–around20%(CHF880)extraperfarmer–andenabledNespressotobuy25000bags(1500tonnes)ofAAAgreencoffee.
CocoaAlthoughNestlédoesnotownanycocoafarmsorplantations,wearecommittedtocontributingtomoresustainablecocoagrowingthroughprogrammesrunwithothermembersofindustry,governmentsintheproducercountriesofWestAfrica,andotherpartnerorganisations.
Nestléis:AfoundingparticipantintheInternationalCocoaInitiative(ICI),ajointindustry–labourunionandcivilsocietyinitiativewhichworkstoeliminatechildtrafckingandabusivelabourpractices;WorkingcloselywithWestAfricangovernments,labourexpertsandotherindustrypartnerstoimplementasystemofcerticationforcocoa-growingregions,whichwillhelptoimprovethelivesofchildrenandfamiliesoncocoafarmsbyidentifyingnon-compliancewithILOconvention182regardingchildlabourandtakingcorrectiveactionwhereproblemsareidentied;AmemberoftheWorldCocoaFoundation,whichsupportscocoafarmersandtheirfamiliesworldwide.
Nestléisalsofundingathree-yearsustainablecocoaprojectwiththreeco-operativesofabout3000farmersinCted'Ivoire.
AtthisNestlé-sponsoredfarmers'eldschoolinNobertkro,South-WestCted'Ivoire,topicsincluderesponsiblelabourpractices,theimportanceofschoolingforchildrenandsustainablefarmingmethods.
CocoafromfarmslikethiswillbeusedinleadingNestléchocolatebrandsmanufacturedatYorkintheUK33AgricultureandruraldevelopmentThisscheme,inconjunctionwiththeInternationalCocoaOrganization(ICCO),theICI,cocoaexporterECOMAgroindustrialandlocalnon-governmentalorganisationFEMAD(Women,ActionandDevelopment)aimstoimprovecocoafarmers'incomes,protecttheenvironment,combatchildlabour,improveschoolattendanceandincreaseHIVawareness.
FurtherprojectsinWestAfricaareunderdevelopment.
InitiativesandpartnershipsNestléactivelyparticipatesinanumberofinternationalinitiativesandcross-sectorpartnershipsthatpromotesustainableagriculturalpractices.
Ofparticularsignicanceare:CommonCodefortheCoffeeCommunity(4C)Seepage34formoredetails.
SustainableAgricultureInitiative(SAI)TheSustainableAgricultureInitiativeoftheFoodIndustry(SAI-Platform),co-foundedin2002byNestlé,DanoneandUnilever,nowinvolves22majorfoodtradingandproducingcompanies.
Itsmainobjectivesaretoaddress:Qualityandsafetyinthefoodsupplychain;Thegrowingglobaldemandforfood;Thepossibleadverseeffectsofagricultureonnaturalresourcesandtheenvironment.
KeychallengeWatermanagementinagricultureAgricultureusesnearlythree-quartersoftheworld'savailablefreshwater,sogoodwatermanagementisfundamentaltothelivelihoodsoffarmersandtheircommunities.
Manyprogrammesaroundtheworldhelptotrainagriculturalworkerstoaddressissuessuchasirrigation,waterscarcityandsanitation.
TheseincludetheUNGlobalCompactCEOWaterMandate,apublic-privateinitiativebetweentheUnitedNationsGlobalCompactandagroupofcommittedcompaniesandorganisationslaunchedinJuly2007.
OurresponseAsafoundingsignatoryoftheMandate,Nestléisavocalpublicadvocateforaccesstocleandrinkingwater,andhasmadeconsiderableeffortstoshareknowledgeandbestpracticeonagriculturalwateruseandprotection.
Theseinclude:Providing85waterwellsinschoolsinvillageswithintheMogamilkcollectiondistrictinIndia;WorkingwithmilkproducersinSouthAfricatousemoreefcienttillagepractices,night-timeirrigationandcomputerisedirrigationsystems;TeachingVietnamesecoffeefarmersefcientirrigationtechniquesexpectedtoreducewateruseby60%;SupportingalocalgovernmentprogrammetohelpfarmersintheShuangchengmilkdistrict,China,tostorefarmefuentcorrectlytoavoidcontaminatinggroundwater.
In2000,theSustainableAgricultureInitiativeNestlé(SAIN)waslaunchedtopromotesustainableagricultureandimproveefciencyandriskmanagement.
ToprovideasystematicframeworkforNestlé'smanywater-relatedprojects,theCompanyhasmadewaterakeySAINactivity.
ChildreninKaleke,India,atawellbuiltintheirschoolaspartofaNestlépartnershiptobringcleanwatertovillagesinthemilkcollectiondistrictarounditsMogafactory34TheNestléCreatingSharedValueReportTheCommonCodefortheCoffeeCommunity(4C)buildsonavoluntarycodeofconductadoptedbythecoffeeproducers,traders,civilsocietyandotherstakeholderorganisationsthatformthenot-for-prot4CAssociation,whoarecommittedtogoodfarmingandmanagementmethodstoimproveefciency,protability,transparencyandsustainabilityintheproduction,processingandtradingofcoffee.
ByDecember2007,approximately6million60kgbags(360000tonnes)ofcoffee,6%oftheworld'ssupply,was4C-veried,andmorethanhalfoftheglobalcoffeeproducers,aswellasthelargesttradinghouses,roastersandmanufacturers,arenowrepresentedamongthe72membersofthe4CAssociation.
Nestléwillreceive4Ccoffeein6ofourcoffeefactoriesbytheendoftherstquarterof2008.
Readmoreonlineatwww.
nestle.
com/csv/storiesandwww.
sustainable-coffee.
netCommonCodefortheCoffeeCommunity(4C)Topleft:MrsVoThiThinh,acoffeefarmerinVietnam,deliversherrstlotofcoffeeveriedundertheCommonCodefortheCoffeeCommunity(4C)scheme,havingtakenpartin4CtrainingandproducedhercoffeeinlinewiththeCodeAboveleftandright:Auditorsvisitafarmtoverifythatitsfarmingandmanagementprinciplesadheretothe4CCode,andcheckcoffeequality.
Topright:Coffee-dryingonaVietnamesefarm35AgricultureandruraldevelopmentWithintheSAIframework,Nestléhasworkedwithfarmerstodevelopbestpracticesinmilkproduction,andcoffee,cereal,fruitandvegetablegrowing.
Italsoplanstoexpandtheseactivitiestoallmainrawmaterialsandtoissuessuchasuseofwaterinagricultureandbiofuels.
Throughitscoffeeworkinggroup,Nestléisinvolvedinthreesustainablecoffeeproductionpilotprojects,eachundertakenincollaborationwithamajortradepartner:ECOMinNicaragua;VolcaféinGuatemala;NKGPartnershipsinVietnam.
Findoutmoreatwww.
saiplatform.
orgManagingsupplierrelationshipsIn2007,Nestléconducted3400auditsofsuppliers'facilitiestohelpensurethattheycomplywithNestléfoodsafetystandards.
(Seewww.
nestle.
com/csv/downloads)Ourobjectiveisaglobal,supply-chain-widesystemofquality,socialandenvironmentalaudits,whichwillnotonlyreducethetotalburdenandanyduplicationofwork,butalsohelpustoreplicatebestpracticeacrossallkeysourcingareas,continuebuildingpartnershipsanddelivermeasurableresults.
NestléisalsoamemberofAIM-PROGRESSTaskForce.
ThisisaninitiativecomprisedofleadingFast-MovingConsumerGoods(FMCG)companiesthatsupportstheuseofcommonevaluationmethodstodetermineCSRsupplierperformanceandhelppromoteresponsiblesourcingpracticeswithinthesupplychain.
Nestléinsistsonhonesty,integrityandfairnessinallbusinessrelationships,andwheninstancesofnon-compliancearediscovered,correctivemeasuresareneededforthesuppliertoberetained.
ItisNestlé'spolicytoapplysanctionsintheeventofmisconductorabuseofethicalstandardsandguidelines.
Furthermore,wemakeclearourexpectationswithregardtothesocialconditionsofthefarmerswebuyfrom,withchildlabourandemployeehealthandsafetyallhighpriorities.
Detailedpoliciesandguidelinesconcerningourpositionontheseandotherissuescanbefoundatwww.
nestle.
com/csv/downloadsAllmeasurestakentosupportenvironmentallysoundbusinesspracticesandimproveenvironmentalperformancearesetoutinNestlé'sPolicyontheEnvironment.
DirectPurchasingguidelinesNestléisawareofthestrainagriculturalprocessescanputonenvironmentalresourcesandecologicalhabitats.
Inordertomaximizetheperformanceofouragriculturalinputsandminimizepotentialnegativeimpacts,Nestléhasissuedpurchasingguidelinesrecommending,whereverpossible,sustainablefarmingpracticesinthecaseofdirectprocurementfromfarmers.
6%Proportionofworldcoffeesupplycurrently4C-veriedAspartoftheNestléSustainableAgricultureInitiative,thisprojectinVietnamispassingonexpertiseinsustainablefarmingpracticestocoffeegrowersLookcloser@nestle.
comWatchvideoson4C-certiedcoffeeandtheInternationalCocoaInitiativeatwww.
nestle.
com/csv/stories36ValueforNestléByrespondingtoconsumers'changingneeds,integratingfurtherintosocietyandcommunicatingclearly,ourbrandsandcustomerloyaltyarestrengthened,bringinglong-termenhancedgrowth,marketshareandprotability.
ValueforsocietyIncreasingnumbersofconsumersgetaccesstosafe,high-quality,nutritiousfoodproducts.
Theyalsogainagreaterknowledgeofhealthissues,aswellasabetterunderstandingofhowtheyandtheirfamiliescanuseNestléproductsforasafe,healthyandenjoyablediet.
TheNestléCreatingSharedValueReportProductsandconsumersNestlé'scorebusinessstrategyisNutrition,HealthandWellness–offeringproductsofsuperiorvaluetothoseofourcompetitors,whichimprovesbothconsumerwellbeingandNestlésalesresults.
Opposite:LizEllis,formerAustraliannationalnetballteamcaptain,frontsamajortelevisionadvertisingcampaignforarangeofNestléproducts,emphasisinghowallofthemcombinetasteandenjoymentwhilettingintoahealthylifestyleCreatingSharedValue37Productsandconsumers38TheNestléCreatingSharedValueReportAsanincreasingnumberofsocietiesbegintomoveoutofpoverty,it'squitelikelythatoveraperiodofyears,thediseaseprolechangesfrominfectiousdiseasesasthemaincauseofdeath,especiallyamongchildren,toanemphasisonchronic,mostlynon-infectious,diseases,whichprimarilyaffectadultsandtheelderly.
Safe,nutritiousfood,especiallyifitisfortiedwithkeymicronutrientsthatarepresentintheaveragedietininsufcientamounts,canhaveasignicantimpactonchronicdiseases,preciselybecausethereisahugeincentiveforenlightenedmanufacturerstocontributetopublichealthatthesametimeastheyaregrowingtheirpenetration.
FrommyexperienceinMexico,IbelievethatNestléhastrulyunderstoodthisdynamicandisdeliveringgenuinesharedvaluethroughitsproductsinthatsocietyJulioFrenk,formerSecretaryofHealthofMexicoNutrition,HealthandWellnessNutrition,HealthandWellnessproleFromtheveryoriginofourCompany,ourstrategyhasbeenbasedonnutritiousproductsthatcontributetothehealthandwellbeingofconsumers.
Inrecentyears,Nestléhasreinforcedthisstrategy,becomingtheworld'sleadingNutrition,HealthandWellnesscompany,withtotalGroupsalesofCHF107.
6billion.
Nestléinvestsincontinuousdevelopmentandrenovationofitsproductstoenhancetheirqualityandnutritionalvalue.
Italsocontinuallyadaptsthemtomeetconsumers'changingpreferences,astheyevolvebeyondtaste,enjoymentandconveniencetowardstheaddedbenetsofnutritionandpersonalhealth.
Makingnutritionthepreferredchoice:60/40+Nestlé'sstrategyisbasedonofferingproductsthathaveprovensuperiorityinconsumerpreferenceandnutritionalvalueoverthecompetition.
Thisisbasedonaproprietaryproducttestingprocesscalled60/40+.
ChampionedacrossallNestlébusinessesbytheCorporateWellnessUnit,theprogrammegetsitsnamefromitsdualaim:gainingtheapprovalofatleast60%ofconsumersinatastetestwhilebringinganutritional"plus".
Theprocesshelpstocontinuallyimprovethetasteandnutritionalvalueofourproducts,contributingtomarketsharegainsandimprovedprotability.
Tohavethemostimpact,theprogrammefocusesonourbest-sellers.
ProductswithasalesvalueofCHF14.
6billionweretestedin2007,making60/40+thelargestnutrition-focusedprogrammeintheFoodandBeveragesindustry.
Exemplifyingthe60/40+programme,NestléIndialaunchedMaggiDalAttaNoodles.
Thisisnotonlyoneofthecountry'smostpopularsnacks,butoffersproteinanddietarybreintheformofatta(awholewheatour)andvegetables,withreducedsaltcontent.
60/40+producttestingisimplementedworldwide,resultinginproductswithaddednutritionalvalue,producedtosuitlocaltastes.
MaggiDalAttaNoodles,forexample,areformulatedtomeetthespecicneedsandpreferencesofconsumersinIndia39ProductsandconsumersNestléNutrition,2007BusinessareaPositionInfantNutrition*1stHealthCareNutrition2ndPerformanceNutrition1st**WeightManagement1st****Babyfoodandinfantformula**PositionofperformancebarsinNorthAmerica***PositionofpersonalisedweightmanagementinNorthAmericaSource:NestléNestléNutritionNestléNutritionisaglobal,standalonebusinessthatfocusesondeliveringscience-basednutritionproductsandservicesdesignedtoaddressspecichealthandwellnessneeds.
Withapresenceinmorethan100countriesandwithmorethan20000employees,itoperatesinfourkeybusinessareas:InfantNutrition(infantformula,toddlerandbabyfood):Helpinginfantsandyoungchildrentogrowanddevelopintohealthyadults;HealthCareNutrition:Productsfortheelderly,andforpeoplerecoveringfrom,ormanaging,certainmedicalconditions;PerformanceNutrition:Promotingpeakmentalandphysicalperformanceforathletesandhighlyactivepeople;WeightManagement:Offeringpersonalisedweightmanagementprogrammesthathelpconsumerstoloseweight.
WiththeacquisitionoftheGerberBabyFoodCompanyinSeptember2007,infantfeedingsolutionsandbabyfoodmakeupmorethan70%ofNestléNutrition'sbusiness(BabyFood44%,InfantFormula29%).
Thisnowgivesusthenumberonepositioninthelargestsinglebabyfoodmarketworldwide,theUnitedStates,andclearlyestablishesNestléNutritionasthegloballeaderinthesector.
Thisacquisitioncomesinthewakeoftwoothers–NovartisMedicalNutritionandJennyCraig–transformingNestléNutritionintoabusinesswithannualisedsalesofaboutCHF11billion.
Seewww.
nestlenutrition.
comformoreinformation.
CHF11billionApproximatevalueofannualisedsalesofNestléNutritionGerberproductsbeingputthroughtheirpacesatatastingsession.
Gerberhasdeveloped"StartHealthy,StayHealthy",aninitiativeusingthelatestnutritionresearchtohelpparentsestablishhealthyeatinghabitsfortheirchildren40TheNestléCreatingSharedValueReportResearch&Developmentexpenses,1998-2007*2.
01.
51.
00.
501998199920002001200220032004200520062007Source:Nestlé*CHFbillion0.
810.
901.
041.
161.
211.
211.
431.
501.
731.
88ResearchanddevelopmentNestlé'sR&DnetworkNestlécontinuestobeagloballeaderinR&D,withapproximately5000peopleactivelyinvolved.
In2007,NestléspentCHF1.
88billiononR&D,thisgurehavingmorethandoubledinthepasteightyears.
Nestléiscommittedtoopeninnovation,throughwhichwemultiplyouropportunitiesandleverageresearchintoproductsandservices.
Thisincludespartnershipswithuniversitiesandstart-ups,venturecapitallargestprivatefacilityfornutrition-relatedresearch,withapermanentstaffof700,includingover300scientists,representing48nationalities.
TheNRC(www.
research.
nestle.
com)isthehubofNestlé'sworldwideR&Dcommunity,combiningglobalscalewithlocalrelevance.
Itengagesinmorethan200externalscienticpartnershipsanduniversitycollaborationseachyear,continuouslybuildingaknowledgebasetomeetchangingconsumerneeds.
NestléInternationalNutritionSymposiumAttheNRC'sannualInternationalNutritionSymposium,leadingexpertsdebatecurrentissuesinhumanhealthandphysiology,identifyfutureresearchdirectionsandpublishtheirconclusionsinscienticliterature.
InOctober2007,thefourthSymposiumonNutritionandCancerexploredtheroleofdietasariskfactorintheoriginsofcancer,aswellasexplaininghownutritioncanprovidepreventativesolutions.
Readmoreatwww.
nestle.
com/csv/symposiumNRCresearchconceptsaretransformedintoproductinnovationsandprocessesthroughaninternationalnetworkcomprising:ProductTechnologyCentres(PTCs),eachalignedwithparticularNestlébusinessestoprovideexpertiseforspecicproductcategories,andtogetherformingahubforglobalproductandprocessdevelopment;investmentandcollaborationwithoursuppliers.
Forexample,inFebruary2007weformedanagreementwithINMEGEN,Mexico'sNationalInstituteofGenomicMedicine,throughwhichwefundachairandtwofellowships.
AndinNovember2006weformedapartnershipwithEPFL(EcolePolytechniqueFédéraledeLausanne)toco-operateonscienticresearchintotheroleofnutritioninbraindevelopment.
TheNestléResearchCenter(NRC),basedinLausanne,Switzerland,istheworld'sCHF1.
88billionValueofNestléR&Dexpensesin2007NutritionresearchunderwayattheNestléResearchCenter,partoftheworld'slargestprivatenutritionresearchnetwork41ProductsandconsumersThePowerBarsportsnutritionbarincludesasupplementproventoprovideenduranceathleteswithlong-lastingmentalalertness;AreducedfatcappuccinotechnologyproducesthecreamyheadforNescaféCappucino,whilereducingthefatcontent.
NestléR&DstaffworkedforoveradecadetoperfectLowTemperatureFreezing(LTF)technology,aprocessdesignedtodestabilisethefatdropletsinice-creamsothatitretainsthetasteandtextureofconventionalice-cream,butwithonlyhalfthefatandathirdfewercalories.
LTFtechnologyisusedinNestlébrandssuchasDreyer'sSlowChurned,LaLaitière,LaLechera,Hagen-DazsandMvenpick.
6445Numberofproductsrenovatedfornutritionorhealthconsiderationsin2007ResearchandDevelopmentCentres(R&DCentres),workinginclosecollaborationwiththePTCstomeetregionalR&Drequirements.
Forafulllistofour23PTCsandR&DCentres,pleaseseewww.
nestle.
com/csv/researchcentresNestléisfurthersupportedbytheNestléNutritionCouncil,established30yearsagoandcomposedofinternationallyrenownednutritionscientists.
TheCouncilaimstoreviewcurrentanddevelopingnutritionissues,andadviseseniormanagementontheirimpactuponNestlé'spoliciesandstrategy.
Overthelastdecade,ithasexaminedissuessuchasdiabetesandchildhoodobesity,andreviewedNestlépoliciesonthereductionoftransfattyacids,saltandsugarlevelsinfood,aswellasironandothernutrientfortication.
ApplyingscienceandtechnologyWeapplyscienceandtechnologytoformulateproductsthataddresshealthissuesincludingintestinalhealth,healthyageingandsportsperformance:Wewereamongthersttouseprobiotics–benecialbacteriathatstrengthentheimmunesystem–intheearly1990s;WehavedevelopedtechnologiestoreplacepartiallyhydrogenatedfatswithnaturalvegetableoilsinMaggibouilloncubesandseasonings,andfortifythemwithiodisedsalttohelppreventthyroidproblemsandimpaireddevelopmentofchildren;StaffattheNestléProductTechnologyCentre,Beauvais,France(lefttoright):JulietteThéry,SigridLemonnierandAnthonyPizzagali.
Nestlé'spatentedLowTemperatureFreezingtechnologyretainsthetasteandtextureofconventionalice-cream,butwithonlyhalfthefatandathirdfewercalories.
OriginallydevelopedintheUSA,LTFhasbeenrolledouttopopularFrenchbrandLaLaitièreKeychallengeTacklingobesityObesityoccurswhenenergyconsumptionexceedsenergyexpenditureovertime,andtheexcessisstoredasbodyfat.
Oneofthemaincausesisexcessiveconsumptionofenergy,e.
g.
fromfattysnacksandsugarydrinks.
OurresponseNestlé'sstrategicresponseischaracterisedbythefollowingapproach:Recipeinnovationandrenovation,seekingtooptimizenutrition,forexamplebyremovingtransfattyacids,orreducingfat,sugarorsalt;The60/40+programme,deliveringtasteandnutritionalsuperiorityovercompetingproducts;BrandedActiveBenets,providingadditionalnutritionalbenets;TheNestléNutritionalCompass,providingcomprehensivenutritionalinformationtoallowconsumerstomakeinformedchoices;Helplines,providingone-to-oneadviceonsubjectsincludingnutrition;Developmentofnutrition-orientedbrandsandtechnologiessuchasLeanCuisine,JennyCraigandSlowChurnedice-cream.
42TheNestléCreatingSharedValueReportOptimizingthenutritionalvalueofNestléproductsEnhancing:Wholegrains:1.
6billionadditionalservingsinEurope(2004–2007);Healthbenets:BrandedActiveBenets(seebelow);Micronutrients:vitamins,mineralsandtraceelements.
Reducing*:Transfattyacids:34200tonnesremoved(Dec2003–Feb2007);Sugar:204000tonnesremoved(Jan2003–Dec2006);Salt:5000tonnesremoved(Apr2005–Dec2006).
*CPWnotincludedintheseguresSource:NestléCerealPartnersWorldwide(CPW),a50/50jointventurewithGeneralMillsInc.
,isimprovingitsbreakfastcerealswithwholegrains,whichstudieshaveshowntocontributetobetterhearthealth,bloodsugarregulationandweightmanagement.
CPWhas,sincethestartof2004,addedanextra1.
6billionservingsofwholegraintoitsEuropeanproductrange.
Alongsidethis,CPWhasalsoremoved3500tonnesofsugarand530tonnesofsalt.
ProductdevelopmentWecontinuallyreviewthenutritionalcontentofourproducts,reducingpublic-health-sensitivecomponentssuchassalt,sugarandtransfattyacids,andincreasingothersconsideredtobepositiveforhealth,suchascalcium,iron,wholegrainsandbre.
BrandedActiveBenetsInadditiontothegeneralnutritionalbenetsofourproducts,weofferconsumersavarietyofproductswithBrandedActiveBenets(BABs).
Thisisarangeofspecicingredientsandformulasthatprovideadditional,provenhealthbenetstoourmainfoodandbeveragescategories.
In2007,productswithBABsachievedsalesofCHF4.
4billion,anincreaseofmorethan16%.
TheseincludeproductscontainingActibrastoaiddigestion,BLforimprovedimmunityandprotection,andActiColtohelplowerbloodcholesterol.
Evenindevelopedcountries,malnutritionaffectsupto50%ofresidentsinnursinghomesandupto70%ofelderlypatientsinhospital,leadingtoincreasedillnessandmortality.
Inresponse,Nestléhasdevelopedfortieddrinks,soupsandpreparedmealsdesignedtosuitthechangingnutritionneeds,andtasteandtexturepreferences,ofseniorcitizens.
Forexample,Nestlé'sNutrenOptimumrange,availableinLatinAmerica,isenrichedwithcalcium,phosphorus,Omega3and6,andprebiotics,whiletheproductsfromDavigel,abranchofNestléFranceProfessional,includeLesEssentiels,frozenvegetableorfruitpuréesenrichedwithprotein,calciumandbreforuseindessertsandsoups,andpre-cookedSavoureuxmeals,richinproteinandcalcium,withtherighttextureforpatientswithswallowingproblems.
ProducttestingofShreddedWheatatCerealPartnersUK.
NestlébreakfastcerealscontainwholegrainsCHF4.
4billionSalesofproductscontainingBrandedActiveBenets43ProductsandconsumersCompoundedannualgrowthrate,2004-2007*%*Figuresexcludenon-foodproductsSource:Nestlé5.
66.
27.
823.
7OccasionalFood&BeveragesEverydayFood&BeveragesNutritionallyenhancedFood&BeveragesBrandedActiveBenefits3020100ServinglocaltastesanddemandsToensureourproductsmeetthelocalneedsandpreferencesofconsumers,manyofthemareproducedwithsubtlevariations.
Forexample,welaunchedlocalvariationsoftraditionalproductsinBraziltwoyearsago,startingintheNorth-East.
TheseincludeIdealpowderedmilk,avariationofNinho/Nidowithadifferentcombinationofvitaminsandingredients.
NutritionforfamilypetsPetsareanimportantsourceofcompanionshipandpsychologicalwellbeingtomanypeoplearoundtheworld.
Concernoverobesityandhealthisnotrestrictedtohumans,andmuchofourhumannutritionknowledgecanbeadaptedforcatsanddogs.
Forexample,intestinalbacteriainpetsshowmanysimilaritiestothoseinhumans,soNestléscientistshaveformulatedarangeofbalancedpetfoodsthatpromotealongandhealthylife.
Thisincludesextendingtheuseofprebiotics–non-digestiblecarbohydratesthatselectivelystimulatethegrowthofgoodbacteriatoaidintestinalfunction–topetfood.
Nestléisnowanindustryleaderinthesector,startingwiththepurchaseofCarnationin1985,followedbytheacquisitionofSpillersandthenRalston-PurinatocreateNestléPurinaPetCare.
(www.
purina.
com)PurinaProPlanisaddressingthechangingnutritionandphysiologicalneedsofageingcatswithnewdrycatfoodformulasspecicallyfortwodifferentseniorlifestages:mature(7–11)andsenior(11andover).
Forfurtherinformation,pleasevisitwww.
nestle.
com/csv/catfoodLeft:BrandedActiveBenetsareingredientsandformulasthatprovideadditional,provenhealthbenetstoourmainfoodandbeveragescategories.
In2007salesofproductswithBABsincreasedbymorethan16%.
Above:NestlémakesnutritiousfoodstosuitlocaltastesandpocketsLookcloser@nestle.
comWatchvideosandslideshowsonGerberandLowTemperatureFreezingtechnologyatwww.
nestle.
com/csv/stories44TheNestléCreatingSharedValueReportLocaljobopportunitiesInFebruary2007,NestléopenedafactoryinFeiradeSantana,Brazil,forthepackingofcoffeeandinfantcereals,andtheproductionofinstantnoodles.
BackedbyaCHF60millioninvestment,thenewsitecreated125directjobsandvetimesasmanyindirectemploymentopportunitiesforlocaldistributors,brokersandsuppliers,aswellasreaching50millionconsumersinaneconomicallydeprivedregion.
ValueforNestlé:Low-costbusinessmodel;committedworkforceprovidingprotableaccesstoalargeconsumermarketValueforsociety:Employmentopportunities;localeconomicdevelopmentLocalsourcingBraziliandairyfarmersbenetfromfreetechnicaladviceinNestlémilkdistrictswhichsupplymilktotheAraatubafactory.
ThefactorymanufacturesaffordableIdealpowderedmilk,whichisenrichedwithiron,calciumandvitaminsA,CandD.
ValueforNestlé:SecuresourceofhighqualityrawmaterialsValueforsociety:ReliablemarketandregularincomeforsuppliersPopularlyPositionedProducts:improvednutritionatthebaseofthepyramidNestléhasaresponsibilitytoprovideconsumerswithnutritiousproductsregardlessofwherewesellthemandthepricepointatwhichwesellthem.
Tohelptoprovidethe2.
8billionpeoplearoundtheworldwhoearnlessthanUSD10(CHF11)perdaywithaffordablefoodproducts,wehaverenewedourPopularlyPositionedProducts(PPPs)initiative.
OurIdealpowderedmilk,aPPPsoldinBrazil,isjustoneexampleofhowvalueissharedbybothNestléandsociety.
Leftandrightabove:TheFeiradeSantanafactoryinBrazilopenedin2007withaninvestmentofCHF60million,bringing125directjobsandvetimesasmanyindirectemploymentopportunitiestoaneconomicallychallenged,ruralregion.
Rightbelow:BraziliandairyfarmersbenetfromfreetechnicaladviceinNestlémilkdistrictswhichsupplymilktotheAraatubafactory.
ThefactorymanufacturesaffordableIdealpowderedmilk,whichisenrichedwithiron,calciumandvitaminsA,CandD45ProductsandconsumersAffordabilityandavailabilityAffordability:PPPsoftencomeinsmaller,moreaffordablepacksizessothatlower-incomeconsumerscanbuythemregularly;Availability:OurDirectStoreDeliveryinitiativehasincreasedmarketpenetrationandproductavailabilityincountrieswithwidespreadpopulations.
InBrazil,thereare4000door-to-doordistributorswhosupplementaccesstotraditionaltradeoutlets.
Similarschemesforice-creamdistributionhavebeenestablishedinSouthAfricaandThailand,aswellasmorethan3000"coffeecarts"acrossWestAfrica.
ValueforNestlé:Newbusinessopportunities;protablebrand-building;closercommunityrelationshipsValueforsociety:Incomecreation;skillstransfer;micronance;socialinclusionNutritionalvalueSomePPPsarefortiedtoensureconsumersgetaddednutritionalbenets.
InLatinAmerica,forinstance,Idealpowderedmilkisenrichedwithiron,calciumandvitaminsA,CandD,andMaggiSopaCrecimientoinCentralAmerica,achickenandnoodlesoupwithamilkbase,containsprotein,vitaminsandmineralsneededforchilddevelopment.
EnrichedproductsaresuccessfulinAfricatoo;Maggibouillon,madewithiodisedsalt(whichhelpspreventthyroiddisease)isthefastestgrowingNestléproductinGuinea,CameroonandCted'Ivoire.
ValueforNestlé:Access/growthinnewmarkets;greaterproductappealandwiderbrandrecognition;appropriatenancialreturnsValueforsociety:AccesstoaffordablenutritionproductsOurDirectStoreDeliveryinitiativehasincreasedmarketpenetrationandproductavailabilityincountrieswithwidespreadpopulations.
InBrazil,thishasprovided4000"AtéVocê"door-to-doordistributorswithincomegenerationopportunitiesLookcloser@nestle.
comWatchavideoaboutPopularlyPositionedProductsinBrazilatwww.
nestle.
com/csv/stories46TheNestléCreatingSharedValueReportMarketingandcommunicationOurcommunicationcommitmentsWeareveryconsciousofourroleincommunicatingresponsiblytoconsumers,andparticularlytochildren,whichiswhyallNestlécompaniesarerequiredtoabidebytheNestléConsumerCommunicationPrinciples.
Aspartofouroverallresponsibilitiestoconsumers,wearecommittedto:Clear,user-friendlylabellingandsupportingmaterialstohelpconsumersmakewell-informedfoodchoices;Responsiblecommunicationaboutallproducts,especiallythoseconsumedbychildren,(seesectiononAdvertisingtochildren,page49)inlinewithapplicablelawsandourCorporateBusinessPrinciples;Participationinandsupportforpublicnutritioneducationprogrammes;Collaborationwithpublichealthbodiestoworktowardshealthierdietsandlifestyles.
ThefullPrinciplesareavailableatwww.
nestle.
com/csv/downloadsResponsiblefoodlabellingWhilediscussionscontinueaboutthebestapproachtofoodlabelling,NestléhasalreadyintroducedtheNestléNutritionalCompass(launchedin2005).
Thisisanon-packinformationpanelthatprovidesconsumerswithrelevant,easy-to-understandnutritioninformation.
Itisagloballabellingschemethattranslatesintobillionsofclearernutritionlabelsinthehandsofconsumers.
TheCompassalreadyappearsonproductsamountingto95%oftotalsalesglobally,andcontinuestoberolledoutacrossourproductrange.
Builtaroundanutrientcontenttable,theCompasscomprises:Goodtoknow:Keynutritioninformationrelatingtoingredientsorissuesofpublicconcern(forexample,fat,sugarorsaltcontentbutalsoironorbre);Goodtoremember:Tipsforhealthyenjoymentoftheproduct;Goodtotalk:Contactdetailsandlinkstofurtherinformationonline.
Pleasevisitwww.
nestle.
com/csv/compassformoreinformationabouttheCompass.
Theon-packcontactdetailsprovideaccessto96ConsumerServicesteamsaroundtheworld.
Nearlythree-quarters(73%)ofthe10millioncallstheyreceiveeachyeararerequestsforproductinformation,nutritionaladviceorrecipes,andworldwide,over40millionconsumerschoosetoreceiveinformationandadvicefromNestléthroughe-mailordirectmail.
NestlénutritionistsworkwithvariousstakeholderstodeveloptheCompassandensureitscontinuedrelevance.
InEurope,forexample,itisbeingadaptedtofeatureacompleteGuidelineDailyAmount(GDA)tableforthe"big8"(energy,carbohydrates,proteins,fats,sugars,saturatedfats,sodium95%ProportionofproductssoldcarryingtheNestléNutritionalCompassonpackTheNestléNutritionalCompasssystemgivesclearandcomprehensivenutritioninformationon-pack.
TheCompassisshownaboveasitappearsontheMilobrandassoldinMalaysia.
MiloispopularinMalaysiaandmanyothercountriesaroundtheworld47Productsandconsumersandbres).
ThisisNestlépolicyandessentialifahealthornutritionclaimismade;onlywherethereisalackofspaceandnosuchclaimismadecanjustthe"big4"(energy,carbohydrates,proteinsandfats)belisted.
TheGDAtablewillbecomplementedbyat-a-glanceinformation,onthefrontofpacks,aboutenergycontentperservinganditscontributiontorecommendeddailycalorieconsumption.
AnarrowwilldirecttheconsumertotheCompassforfurtherinformation.
TheGDAnutritionlabellingschemeison45%ofourproductsinEurope(asofend2007).
EducationandengagementNestléhasdevelopedorsponsoredmanycommunityeducationprogrammesaroundtheworldtoimproveunderstandingoftheimportanceofnutritionandphysicalactivitytohealth.
Goodeatinghabitsstartatanearlyage,somuchofourfocusisonschools.
FranceandEU:TheNestlé-sponsoredprogramme"TogetherLet'sPreventChildhoodObesity"startedasapilotprojectin1992innorthernFrance.
Ithasnowbeenadoptedby10otherFrenchcitiesandseveralotherEuropeancountries,andhascreatedtheEU-fundedPreventChildhoodObesityNetworkofwhichNestléisafoundingsponsor;SwitzerlandandHungary:TheNutrikidprogrammeisajointventurebetweentheSwissSocietyofNutrition,NestléAlimentarium(foodmuseum)andNestléSwitzerlandandHungary,reaching170000studentswithclassroomkitsofferingnutritioneducationintheformofvideos,gamecardsandbooks;Brazil:800000childrenaged5–14havebenetedfromourNutrirprogramme,whichtrainsNestlévolunteerstopromotenutrition,hygieneandhealththroughgamesandplay;Thailand:5000primaryschoolshavebeenreachedthroughtheHealthyThaiKidswellnessinschoolcampaign.
Seewww.
nestle.
com/csv/educationformoredetailsoftheseandotherprogrammes.
Underscoringourbeliefoftheimportanceofnutrition,wealsoempowerourowncolleagueswithaglobalnutritiontrainingprogrammecalledNutritionQuotient(NQ).
Usingdifferentmodulessuitableforallemployees,fromtheExecutiveBoardtoplantlevel,NQleveragesthenutritionexpertiseofourNestléResearchCenter(NRC)scientists.
Readmoreatwww.
nestle.
com/csv/NQOver10millionTotalnumberofpeoplereachedbyNestléeducationprogrammesandinitiativesNestlésponsorstheHealthyThaiKidsprogramme,reaching5000primaryschoolswithnutritioneducation.
Here,childrendiscoverinafunwayallabouthowfoodisdigestedLookcloser@nestle.
comWatchananimatedexampleoftheNutritionalCompassatwww.
nestle.
com/csv/compass48TheNestléCreatingSharedValueReportLeft:TheNestléNutritionDuchessClubisaninformalassociationofwomenofallagesandfromdiversebackgroundsinNigeriaandGhana.
Theclubpromoteshealthyeatinghabits,goodnutrition,homemanagement,entrepreneurshipandleadership,andhasalsoembarkedoncommunity-basedhealthinitiatives,includingfoodhygieneeducationformarkettradersandschoolchildren.
Right:MembersoftheNestléNutritionDuchessClubpassingonpracticalfoodandhygieneknowledgeinanopenairmarketNestlé'sNIDONutritionSystem,whichhasachievedsalesofCHF1.
2billioninjustveyears,laysthefoundationforhealthydevelopmentinearlychildhood.
ItnowincorporatesLactobacillusPROTECTUStostrengthentheimmunesystemagainstgerms,aswellasPrebioinpre-schoolmilksforchildrenunder5yearsold,andCalci-Nforcontinuedhealthybonegrowthinchildren.
TheNIDONutritionSystemwaslaunchedinthePhilippinesin2000repositioningNIDOfortiedmilkwithaddedvitaminsAandD.
Thepromotionconcentratedonthe"10signsofgoodnutrition"forchildren,suchasclearskin,goodmuscledevelopment,sleepingwellandbeingalertandcheerful,developedbytheNutritionist-Dietitians'AssociationofthePhilippinesFoundation.
On-packinformationwassupportedbyawiderangeofcelebrity-endorsedcommunications,suchaspoint-of-salematerials,print,radioandtelevisionadvertising,andfeaturearticlesinmagazines.
Inadditiontoincreasedconsumerawarenessofthebenetsofgoodnutrition,thecampaignresultedin8%salesgrowthofthemorenutritiousproductinthePhilippinesin2006,anditsrolloutasaglobalcampaignwasstartedin2007.
TheNestléNutritionDuchessClubisaninformal,all-femaleassociationinNigeriawiththeaimofempoweringwomenthroughknowledgeandskillsinnutrition,homemanagement,entrepreneurshipandleadership.
TheDuchessClubprovidesnutritioneducationworkshopsfocusingonhealthiereatinghabits,foodsafetyandfoodmanagementformothersandhomemakers.
TheDuchessClubhas530memberswhohavereachedoverhalfamillionwomen.
49ProductsandconsumersMarketingandadvertisingpracticesAdvertisingNestléPrinciplesconcerningappropriatecommunicationwithconsumershavebeenapartoftheNestléCorporateBusinessPrinciplessincetheywererstpublishedin1999.
Theseundergoperiodicreview,andamorecompleteanddetailedsetofPrincipleswasreleasedin2002.
Theywerefurtherstrengthenedinregardtochildrenin2004and2007(seeopposite).
ThePrinciples(availableatwww.
nestle.
com/csv/downloads)arerequiredreferencepointsforallmarketingstaffandadvertisingagenciesglobally,andmustbeusedwhendevelopingourconsumercommunication.
AllmarketingcampaignsarereviewedandwehaveputaninternalmonitoringprocessinplaceinourmarketstoensurecompliancewiththePrinciples.
Additionally,Nestléparticipatesinindustryinitiativesaimedatfurtheringresponsibleadvertising.
ThisincludesaEurope-wideinitiative,startedin2005,whichassessescompanies'compliancewithindustry-wideCodesofConductforFoodandBeveragesMarketingCommunications.
ThishasprovidedausefultoolforNestlétoreceivefeedbackonitsadvertisingandmaintainhighstandardsofcompliance.
JointindustryinitiativesonadvertisingtochildrenInDecember2007,NestléjoinedvoluntaryresponsibleadvertisinginitiativesbytheFoodandBeveragesindustryinEuropeandCanadatochildrenbelow12yearsofage.
Theaimistosupportandpromotegoodnutritionandahealthylifestyle.
Theindustrypledge,tobefullyimplementedbytheendof2008,willbesubjecttoindependentcompliancemonitoring.
ForfurtherinformationonourConsumerCommunicationPrinciples,ourPolicyonMarketingCommunicationtoChildrenandotherpledgesandinitiativeswesupport,pleaseseewww.
nestle.
com/csvCommunicatingwithhealthprofessionalsFormorethan60years,Nestléhascontributedtothecontinuingnutritioneducationofhealthprofessionalsthroughscienticpublications,workshopsandscholarships.
In2007,theNRCpublished200peer-reviewedresearchpublications,andsome4000medicaldelegatescommunicatewithhealthcareprofessionalsonadailybasisoverthecourseoftheyear.
KeychallengeAdvertisingtochildrenOurConsumerCommunicationPrinciples(pleaseseewww.
nestle.
com/csv/downloads)includespeciccriteriaforcommunicationwithchildren.
Theyareaimedatencouragingmoderation,healthydietaryhabitsandphysicalactivitywithoutunderminingtheauthorityofparentsorcreatingunrealisticexpectationsofpopularityorsuccess.
Theyalsoensurethatwedonotcreatedifcultyindistinguishingrealfromimaginaryorcreateasenseofurgency.
Inlightofrisingconcernsaboutchildobesity,NestléstrengtheneditsPrinciplesin2007byaddingtwoimportantprovisions:Noadvertisingormarketingactivityistobedirectedatchildrenunder6years;Advertisingforchildrenfrom6to12yearsmustberestrictedtoproductswithanutritionalprolethathelpschildrenachieveahealthybalanceddiet,includingclearlimitsforsuchingredientsassugar,saltandfat.
Thesewillbefullyimplementedinallcountriesbytheendof2008andsubjecttomonitoring.
50TheNestléCreatingSharedValueReportTheNestléNutritionInstitutecommunicateswithhealthprofessionalsatcongressesworldwideTheNestléNutritionInstitute(NNI)isaneducationalorganisationprovidingaforumforhealthprofessionalstoshareinformationaboutthelatestdevelopmentsinpaediatric,clinicalandperformancenutrition.
TheNNIhasheldmorethan70globalNestléNutritionWorkshopsandgrantedmorethan500postgraduatescholarshipstoyoungpaediatricians,paramedicsandscientistsfromdevelopingregions.
Nestléhasalsoproducedmorethan3000publications,includingAnnalesNestléandTheNestforpaediatrichealthprofessionals,andClinicalNutritionHighlights,ascienticjournalforclinicalnutritionists.
Arangeofothermaterialinprint,audio-visualandelectronicformatsisavailableinEnglish,FrenchandSpanish,andtheNNIwebsite(www.
nestlenutrition-institute.
org)providesaccesstoanonlinemedicalandscienticlibrary,educationaltools,onlineworkshops(webinars)andinformationonforthcomingeventstoyoungpaediatricians,healthprofessionalsandscientists.
MarketingofproductsforinfantsNutritionduringtherstthreeyearsoflifeGlobally,malnutritionactuallybecomesmostseriousamonginfantsaftersixmonthsofage,whennutritional"complementaryfoods"(cereals,milks,puréedvegetablesandmeats)becomecriticaltohealthandsurvival.
Nestléistheworld'sleaderinproducingandpromotingthesefoods,whichtypicallyreplacefoodslikecornstarchorrice–orevensoftdrinksandFrenchfries.
Inaddition,Nestléistheonlymajorcompanythatmarketscomplementaryfoodsonlyaftersixmonthsofageindevelopingcountries.
BreastmilkandbreastmilksubstitutesNestlébegantomeettheneedforanutritionallysafealternativetobreastmilkwiththedevelopmentofHenriNestlé'soriginalinfantcereal.
In1869hedeclaredinhisMemorialoftheNutritionofInfantsthatbreastfeedingwasbestforbabiesandthateverymotherabletobreastfeedshoulddoso.
ThisoriginalprinciplestillformsthecornerstoneofourInfantFormulaMarketingPolicy.
However,notallmothersbreastfeed,andinfantformulaistheonlyproductrecognisedbytheWorldHealthOrganization(WHO)asanacceptablesubstituteforbreastmilk.
Infantformula,withitsspeciallyadaptednutrition,hasensuredthehealthydevelopmentofmanychildrenaroundtheworldandreplacesdangerousbreastmilksubstitutes.
Weprovidehigh-quality,safeandnutritiousinfantformulaproductsandarecommittedtotheirresponsiblesaleandmarketing.
Onthepack,weinformconsumersandhealthprofessionalsofthebenetsandsuperiorityofbreastmilk;productlabelsandeducationalmaterialsalsocarrypreparationinstructionsaswellaswarningsaboutinappropriateuse.
51ProductsandconsumersTheWHOInternationalCodeofMarketingofBreast-milkSubstitutesTheaimoftheWHOCodeis"tocontributetotheprovisionofsafeandadequatenutritionforinfants,bytheprotectionandpromotionofbreastfeeding,andbyensuringtheproperuseofbreastmilksubstitutes,whenthesearenecessary,onthebasisofadequateinformationandthroughappropriatemarketinganddistribution".
TheCodewasadoptedbytheWorldHealthAssemblyin1981asarecommendationtoallitsMemberStates,andNestléwastherstcompanytoannounce(in1982)thatitwouldvoluntarilyimplementtheWHOCodeinalldevelopingcountries.
Asaresult,Nestléacceptsnoadvertisingormarketingtothepublicofanykind,andnocontactbetweeninfantmilkmarketingstaffandthepublicinthosecountries.
NestléhasrepeatedlytakenactionincountriestopromoteadoptionoftheWHOCodebygovernments,andgovernment-sponsoredmonitoringoftheentireindustry.
AssuranceNestléhasathree-partmethodtoassurecompliancewiththeWHOCode:NestléhasanextensiveISO-likeinternalmonitoringsystem,theWHOCodeQualityAssuranceSystem,whichisnowactiveinalldevelopingcountries;NestléinternationalauditorsconductanextensiveauditofcompliancewiththeWHOCodein9–20countriesannually;Nestléhasasystemofongoing,independentauditsbyexternalsocialauditingcompanies.
Resultsofthemostrecentoftheseexternalaudits,carriedoutinSriLanka,canbeaccessedfromwww.
babymilk.
nestle.
comInaddition,thereisaNestléinternalombudsmansystemforanyemployeewhowishestocondentiallyreportallegedWHOCodeviolations.
In2006,theMalaysiangovernmentimposedsanctionson8outofthe12infantfoodcompaniesoperatinginthecountryforviolationsoftheMalaysianHealthMinistry'sInfantFormulaCodeofEthics.
Nestléwastheonlynon-Asiancompanynotatfault.
Readmoreatwww.
nestle.
com/csv/malaysiaWHOCodeimplementationandassuranceNestlélearnedagreatdealfromitsexperienceconcerninginfantformulamarketinginAfrica,recognisingourresponsibilitytogobeyondwhatwereacceptedmarketingstandardsatthetime.
WeintegratedtheWHOCodeacrossourentireoperationsindevelopingcountriesin1982,andcontinuetomonitoritsapplication,reningourinstructionswithexperience.
Weworkwithgovernments,othersinindustryandmembersofcivilsocietytodeveloptheCodeincountrieswhereitisapplied.
TheInfantFoodIndustryandtheWHOCode,publishedbyanalystsGESInvestmentServices,assessedinfantfoodcompanies'implementationoftheCodeandratedNestléasthetopcompanyinCodeapplication,stating:"NestléhasthemostelaboratepoliciesandmechanismstoaddresstheCode,distinctlyaheadofitspeers".
ThefullwordingofourInfantFormulaPolicyisavailableonlineatwww.
babymilk.
nestle.
com,wherewealsoanswerthemostcommonlyaskedquestionsaboutinfantfeeding.
Wewelcomefeedback,andwecontinuetomonitorourapproachandcommunicateopenlywithallstakeholders.
52TheNestléCreatingSharedValueReportAbove:ContributingtoUNGCPrinciples7-9andMDG7:ReducingpackagingweightatNestléWaters.
257000tonnesofpackagingforbottledwaterhavebeensavedinthepast6years.
Aboveright:ContributingtoUNGCPrinciples1,2,4,5andMDGs1and7:InCted'Ivoire,amajorcocoa-producingcountry,Nestléworkswiththreefarmingco-operativestopromotegoodlabourpractices,includingthoserelatingtochildlabour.
WealsosupportprogrammeswithotherpartnersthatencouragesustainablemethodsincocoafarmingSupportofUNGlobalCompactPrinciplesandMillenniumDevelopmentGoalsNestlé'sCorporateBusinessPrinciples(seewww.
nestle.
com/csv/downloads)guideourbehaviourinrelationtoallrelevantstakeholders.
Theyreectthebasicideasoffairness,honestyandrespectforpeopleandtheenvironmentinallourbusinessactions.
Theirongoingevolutionhasseentheinclusionofthe10UNGlobalCompact(UNGC)Principlesonhumanrights,labour,theenvironmentandcorruptionin2002.
Examplesthatillustrateourcompliancewith,andsupportfor,thesePrinciplesarecontainedinthisreport.
Nestlé'sfurthersupportfortheUNGCwasdemonstratedinJuly2007throughitspatronsponsorshipoftheUNGlobalCompactLeaders'SummitinGeneva.
Inthetableoppositearejustafewexamplesofouractionsin2007thatmeetourcommitmentsasaUNGCsignatory.
NestlésupportstheUNMillenniumDevelopmentGoals(MDGs),whichweregardashighlyimportantobjectivesthat,throughpartnershipswhichrespondtolocalneedsandharnesslocalknowledgeandcapabilities,canresultinpositive,sustainablechange.
Nestlé'screationofsharedvalueforitselfandsocietybringsspeciccontributionstotheUNMillenniumDevelopmentGoals.
Therearemanyexamplesinthisreportthatdemonstratehowourlong-termgrowthstrategyhelpsalleviateextremepovertyandhunger(goal1)throughinitiativeslikeourPPPstrategy(page44);ourcapacity-buildingprogrammesinmilkdistrictsandthroughcoffeeinitiativeslikeNespressoAAAand4C(pages30,31and34).
Similarly,therearemanyexamplesofhowwecontributeto53TheNestléCreatingSharedValueReportContributingtoUNGCprinciples1,7,9andMDGs1,4,5,7and8:AmongthemanyNestléwater-relatedprojectsthatarestillongoing–providingaccesstocleanwaterbyconstructingwells(India);workingwithfarmersonwaterconservationmeasures(Vietnam);providingfacilitiesforproperstorageoffarmefuent(China);workinginpartnershiponcleandrinkingwaterprojects(Mozambique–seeabove–andRwanda)environmentalsustainability(goal7),suchasreducingwaterconsumption(page16),packagingmaterials(page18)orourcarbonfootprint(page13),whiletheenvironmentalaspectsofouragriculturalengagementssuchasmanagingwaterinagriculture(page33),4CcoffeeandNespressoAAAalsocontributetothisgoal.
Beyondtheimpactsoutlinedabove,wesupportmorethan120projectsandinitiativesaroundtheworldthatrelatespecicallytotheeightMillenniumDevelopmentGoals.
PleaseseetheNestlé,theCommunityandtheUNMillenniumDevelopmentGoalsreport,availableatwww.
nestle.
com/csv/downloads,formoreinformation.
TheUNGlobalCompactPrinciplesSomeexamplesofNestléactionsDescribedonpagesHumanRightsPrinciplesExpansionofparticipationinInternationalCocoaInitiativeandNestlé-speciccocoaprojectsinWestAfrica32LabourPrinciplesCAREindependentauditprogrammecoversareasofhumanresources,occupationalhealthandsafety,andenvironment22–23EnvironmentrelatedPrinciplesReducedwaterconsumptionandinuencingsupplychaintoadoptgoodwatermanagementpractices;higherenergyefciencyandlowerGHGemissions;optimizedpackagingvolumesandsustainablepackaging;foundingsignatory,UNGCCEOWaterMandate10–19CorruptionrelatedPrincipleEstablishmentofNestléCodeofBusinessConduct8TheUNMillenniumDevelopmentGoals1.
Eradicateextremepovertyandhunger2.
Achieveuniversalprimaryeducation3.
Promotegenderequalityandempowerwomen4.
Reducechildmortality5.
Improvematernalhealth6.
CombatHIV/AIDS,malariaandotherdiseases7.
Ensureenvironmentalsustainability8.
Developaglobalpartnershipfordevelopment54TheNestléCreatingSharedValueReportNestlécommitstoopendialoguewithallstakeholders,includingconsumers,customers,employees,investorsandothers.
Wecommunicateonanongoingbasisusingawidevarietyofchannels.
Forexample,throughour60/40+producttestingprogrammeconsumerscaninuenceourproductdevelopment,whileourNutritionalCompasslabellinggivesaccessto96consumerserviceteamsaroundtheworld,andmanyofourbrandshavededicatedwebsites.
Inaddition,weareengagingmorewidelytounderstandandrespondtoopinionsonourstrategyofCreatingSharedValue.
Theobjectivesareto:Provideaformalmechanismforanexchangeofviews;EnableNestlétounderstandviewsfromawidevarietyofexternalstakeholders,providingabroadsocietalperspective;Identifyfuturetrends,risksandopportunitiesrelevanttoNestléanditsstakeholders;ChallengeNestlé'sinternalperspectivesgainedfromconsultationswithseniormanagersthroughwhichkeyissueswereidentiedduring2007.
StakeholderconveningsForthersttimeweinvitedexternalstakeholderstoconveneduring2007specicallytoprovidefeedbackonourCreatingSharedValuestrategy,priorityissues,communicationandreporting,inordertoinformfuturedecisionsbyNestléandtovalidatethendingsofearlierinternalconsultationstoidentifykeyissues.
Threefull-daysessionswereheldduring2007,inGeneva,WashingtonDCandKualaLumpur.
Weintendtofollowupthesesessionsandexaminethepotentialtoconductfurtherengagementandresearchinfutureyears;toincludeAfricaandLatinAmerica.
Thestakeholderconveningsweredesigned,organisedandfacilitatedbyAccountAbilityandwereattendedbyatotalofmorethan50externalparticipants,expertinawiderangeofsocialandenvironmentalimpactareasrelevanttoNestlé'sbusinessactivitiesandoperations(seelistofexpertparticipants).
TheparticipantswereinvitedbyNestlétosharetheirperspectivescandidly.
Sessionswerealsoattendedbyseniormanagersanddecision-makersfromNestléfunctionalbusinessareasandpublicaffairs.
EngagingwithourstakeholdersExpertparticipants*Expertparticipantsincluded:ConferenceofNGOs,ConservationInternational,HumanRightsCommissionofMalaysia,InstituteofCorporateResponsibility,Malaysia,InternationalFederationoftheRedCrossandRedCrescentSocieties,InternationalInitiativeagainstChildLabour,InternationalLabourOrganisation,LutheranWorldFederation,MalaysianAssociationfortheStudyofObesity,MalaysianInstituteofCorporateGovernance,MaxHavelaarFoundation,TheMethodistChurch,RainforestAlliance,Sustain,TransparencyInternational,UnitedNationsDevelopmentProgramme,WorldBusinessCouncilonSustainableDevelopment,WorldCocoaFoundation,WorldEconomicForum,WorldWildlifeFund.
*Thislistrecordsindependentorganisationswhoattendedstakeholderconveningsin2007,andisnotintendedtoimplythattheseorganisationshavecommentedonorveriedthecontentsofour2007CreatingSharedValueReport.
KeyissuesidentiedbyconveningsAnumberofkeyissuesemergedduringtheparticipants'discussions,andthequestionofcomplianceandvericationemergedasacommonthemeinallconvenings.
Otherkeyissuesidentiedincluded:Nutrition,HealthandWellness,includingpromotionofhealthylifestylesandrelatedinformationprovision/communication;Humanrightsandsustainableproductionaspartofthesupplychain,includingwaterandpackagingissues;CommunitysupportandEnterprisedevelopment.
55TheNestléCreatingSharedValueReportInsightsandlearningforNestléThesessionsenabledaneffectivedialogueresultinginvaluableperspectives.
Nestléisgratefultoallthosewhotookpart.
Inparticular,theseexternalopinionsprovidedNestléwithavaluablecross-comparisontoissuesalreadyidentiedthroughtheearlierinternalconsultationprocess(seepage6).
TheyalsogaveNestléfurtherinsightintorelativeprioritiesinthecontextofindividual,organisationalandgeographicperspectivesoftheparticipatingstakeholders.
Forexample,Nestlé'sroleinstandardsdevelopment/promotion–especiallyonHalal–wasdiscussedduringtheKualaLumpurconvening.
NestléhascommittedtoreportbacktotheexpertgroupsonprogressmadeinrelationtorecommendationsbyapproximatelyMay2008.
ThefeedbackandrecommendationswillbemorefullyconsideredforNestlé'snextreportonCreatingSharedValue(tobepublishedin2010)whilethewebsitewillmakeupdatesavailableasweprogressworkwithourstakeholderstoimproveandrespondtorecommendationsmade.
FuturereportingExternalreportingalsohasaroletoplayinCreatingSharedValue.
Webelievethatexternalreportingofinitiativesandkeyperformanceindicatorscanhelpdriveimprovedperformanceinternally,ashasbeendemonstratedbyourincreasednancialdisclosureandimprovednancialperformance.
ThekeyhereistoreportonthoseareasthataremostmaterialtotheGroup–whereanimprovedperformancecanhavethegreatestpossibleimpact.
Nestléiscommittedtoreportingitsperformanceopenly.
Weaimtocontinuouslydevelopourreporting,toreectissuesofmostrelevancetoNestléanditsstakeholders,toengagealllevelsandareasofthebusinessintheprocessesofCreatingSharedValue,andtomaintainprogresstowardsoursustainabilitygoals.
Focusareasinclude:AligningreportingwithexternalguidelinesSomeGlobalReportingInitiative(GRI)performanceindicatorsareincludedwhereindicated.
WealsosummariseperformanceinrelationtoGlobalCompactrequirements.
Ourobjectiveistoalignwithgoodpracticeexternalreportingguidelinesforournextglobalprintreport,whichweaimtopublishin2010.
ImprovingscopeofperformancedataForthersttimeinNestlé'sreportinghistory,thiscurrentreportpresentsperformanceindicatorsinallcriticalareasofCreatingSharedValue.
Whilehistoricaldataisnotavailableforsomeindicators,weareworkingtowardsgreatercoverageanddepthby2010.
CommunicatingwithkeyaudiencesOurreportingstrategyisdesignedtoensureconsistency,integrationandtopicality.
Thiscurrentprintreport,publishedin2008,summarises2007performanceforourshareholdersandotherglobalstakeholders,andispublishedwithour2007ManagementReport.
Inthe2008report(published2009),weaimtoprovideappropriatelytargetedinformationrelevanttospecicaudiencegroups,includingcustomers,investorsandregulators.
Our2009report(tobepublished2010),willbeournextmajorpublicationonCreatingSharedValue.
Wewillcontinuallyupdatetheinformationavailableonourwebsite.
56TheNestléCreatingSharedValueReportVericationofperformancedataandfactualinformationwithintheReport;Visitsto18operationalsitesin13countriestoevaluatetheSHEdatamanagementsystems,anddatareliabilityandaccuracy;PilotevaluationagainstthemainprinciplesoftheAA1000framework,entailingreviewofmaterialityanalysis,stakeholdermappingandengagement,andNestlé'sgovernancearrangements.
PreliminaryndingsBasedonourwork,itisouropinionthattheReport:Includesinformationthatisreliable,understandableandclearlypresentedandprovidesareasonableaccountofrelevantactivitiesandperformanceoverthereportingperiod;Addressesandrespondstoissuespre-selectedbyNestléforreportingthatareofmaterialimportancetotheorganisationanditsstakeholders;Nestléshouldnowconsiderhowitcouldfurtherprovidetransparencyandcontextonitsimpacts,risksandpositiveinitiatives;Reectsareasonablelevelofcompletenessforarstcomprehensivesustainabilityreport,withdisclosureofperformanceonarangeofissues;Nestléshouldnowconsiderhowtofurtherdevelopmeaningfulindicatorsthatwilldemonstrateimplementationofitslong-termCSVstrategy;Providesadequateinformationthroughitsposition,dataandcasestudies;Nestléshouldnowconsiderhowtopresentitspositionandperformanceinthemostbalancedmanner;Includessomeinformationontheorganisation'sinternalsystems;Nestléshouldprovidegreaterdetailinfuturereportingonthegovernance,accountabilityandmanagementstructurestoenablegreaterunderstandingoftheinternalmanagementandassuranceofkeyissues.
ConsiderationsandlimitationsExcludedfromthescopeofourworkisinformationrelatingto:Activitiesoutsidethedenedreportingperiod;Statementsofcommitmentto,orintentionto,undertakeactioninthefuture;Statementsofopinion,beliefand/oraspiration;InformationhyperlinkedfromtheSocialReport.
Ourreviewwascarriedouttoprovidereasonable,ratherthanabsoluteassuranceandwebelievethescopeaboveprovidesareasonablebasisforourconclusions.
Thisindependentstatementshouldnotbereliedupontodetectallerrors,omissionsormisstatements.
Moredetailonassurancendings,keyareasforimprovements,considerationsandlimitationsandBureauVeritas'independence,impartialityandcompetencearereportedinourfullstatementonwww.
nestle.
com/csvBureauVeritasHS&ELtd.
,London,January,2008WritingandeditingNestléS.
A.
,PublicAffairs,withSustainAbilityandFlagCommunicationConceptanddesignNestecLtd.
,SGDU,CorporateIdentity&Design,withEstersonAssociatesPhotographyNicoleBachmann,JodiBieber,RichardBirch,PatrickBrown/PanosPictures,MarkusBühler-Rasom,DouglasEngle,SamFaulkner/NBPictures,PeterGarmusch,PeterGinter,MarcelGrubenmann,HarmenHoogland/NestecLtd.
,MarcLatzel,NadineMarkova,PhilippePrêtre/APGImage,QilaiShen/PanosPictures,JacobSilberberg/PanosPictures,PaulWeinberg/PanosPicturesPrintingEntreprised'artsgraphiquesJeanGenoudS.
A.
(Switzerland)PaperThisreportisprintedonProbulk,apaperproducedfromwell-managedforestsandothercontrolledsourcescertiedbytheForestStewardshipCouncil(FSC)March2008,NestléS.
A.
,PublicAffairsNestléS.
A.
AvenueNestlé551800VeveySwitzerlandwww.
nestle.
com/csve-mail:creatingsharedvalue@nestle.
comIndependentassurance–Methodology&preliminaryndingsstatementStatementofindependence,impartialityandcompetenceBureauVeritasisanindependentprofessionalservicescompanythatspecialisesinquality,health,safety,socialandenvironmentalmanagementadviceandcompliancewithalmost180years'historyinprovidingindependentassuranceservicesandanannualturnoverin2006ofEUR1.
8billion.
BureauVeritashasimplementedacodeofethicswhichisintendedtoensurethatallourstaffmaintainhighstandardsintheirbusinessconductandpreventionofconictsofinterest.
Webelieveourassuranceassignmentdoesnotraiseanyconictsofinterest.
To:thestakeholdersofNestléS.
A.
IntroductionBureauVeritashasbeenengagedtoprovideexternalassurancetoNestléS.
A.
(Nestlé)overitsCreatingSharedValue(CSV)Report(theReport)andreportingprocess.
ThepreparationoftheReportisthesoleresponsibilityofNestlé.
Ouraimistoprovideassurancetostakeholdersovertheaccuracy,reliabilityandobjectivityoftheinformationincludedintheReport.
ScopeandmethodologyThescopeoftheassuranceincludedreviewof:1.
ActivitiesundertakenbyNestléoverthereportingperiodJanuary2007toDecember2007(unlessotherwisestated);2.
InformationrelatingtoNestlé'sissues,responses,performancedata,casestudiesandunderlyingsystemstomanagesuchinformationanddata;3.
Informationfromexternalpartnersrelatingtomaterialityassessmentandstakeholderconvenings;and4.
Anevaluationofsafety,healthandenvironmental(SHE)dataandsystemsacrossasampleofglobaloperationalsites.
Aspartofitsreview,BureauVeritasundertookthefollowing:InterviewswithkeymanagementatNestlé'sheadofce;Reviewofprocessesforidenticationandcollationofrelevantinformation,reportcontentandperformancedatafromGroupoperations;Certno.
SQS-COC-100125MrsMamounaTourétradesinBellevillemarketintheTreichvilledistrict,southofAbidjan,Cted'Ivoire.
AffordableNestléproductslikeMaggicubeshelpgenerateincome,and90%ofthestallsinBellevilleofferMaggiforsale*Referenceyear:1998**Referenceyear:20022.
2AveragenumberofsuccessorsperKeyBusinessPosition917NumberofKeyBusinessPositions42%Indevelopingcountries,localManagementCommitteememberswhoarenationalsofthecountry65647Numberofemployeesindevelopingcountrieswhoreceivedformalclassroomtraining76%Increaseofproductionvolume*22%Reductionofpackagingmaterialforbottledwater**28%Reductionofwaterwithdrawal*3%Reductionofenergyuse*16%Reductionofgreenhousegasemissions*29.
9millionValueofcreditloanstofarmersin2006,inCHF610000Numberoffarmersreceivingfreetechnicalassistance97500Tonnesofcoffeesourceddirectlyfromfarmersin20062-5%Averageannualmilkdistrictgrowthrate77billionPotentialmarketforPopularlyPositionedProducts,inCHF50millionNumberofconsumersreachedbyournewfactoryinNorth-EastBrazil14.
6billionSalesvalueofproducts"60/40+"testedin2007,inCHF6445Numberofproductsrenovatedfornutritionorhealthconsiderationsin20074.
4billionSalesvalueofproductswithBrandedActiveBenets,inCHF1.
88billionTotalR&Dexpensesin2007,inCHFHighlightsImprovingworkers'earningcapacityandcreatingaskilledworkforce:pages20-25Reducingourenvironmentalfootprintandreducingoperationalcosts:pages10-19Helpingfarmersimproveearningsandassuringoursupplyofqualityrawmaterials:pages26-35Expandinglowerincomesegment'saccesstonutritionandbroadeningourcustomerbase:pages44-45Improvednutritionfortheconsumerandincreasingsales/protabilityforNestlé:pages38-43PerformancesummaryNestléCreatingSharedValueperformanceindicatorsGRIreferenceTotalGroupsales(CHFbillion)107.
6n/aTotalshareholderreturn:1January1997–31December2007342.
5%n/aManufacturingandourenvironmentalfootprintMaterialsRawmaterialsandingredients(exceptwater[seebelow],milliontonnes)20.
48EN1Packagingmaterials(milliontonnes)4.
08EN1By-products(forrecycling,milliontonnes)1.
07EN22Reductionofby-productssince1998(pertonneofproduct)58%n/aWaste(fornaldisposal,milliontonnes)0.
372EN22Reductionofwastesince1998(pertonneofproduct)58%n/aEnergyDirectenergyconsumption(PetaJoules)85.
3EN3Energysavedsince1998(pertonneofproduct)45%EN5GreenhousegasesDirectCO2emissions(milliontonnes)14.
1EN16ReductionofdirectCO2emissionssince1998(pertonneofproduct)53%EN18WaterTotalwaterwithdrawal(millionm3)157EN8Watersavedsince1998(pertonneofproduct)59%n/aTotalwaterdischarge(millionm3)101EN21Qualityofwaterdischarged(averagemgCOD/l)62EN21PackagingSourcereduction(thousandtonnes):1991–2007326.
3n/aSourcereduction(CHFmillion):1991–2007583.
7n/aReductionofpackagingweight(perlofproduct)NestléWaters:2002–200722%n/aGovernanceISO14001/OHSAS18001-certiedsites(numberofcerticates)171n/aSitesauditedthroughCAREprogramme403n/aOurpeopleWorkforcesize(totalnumberofemployees)276050LA1LostTimeInjuries(permillionhoursworked)3.
7LA7TotalInjuryRate(permillionhoursworked)7.
5LA7Leadershippositions2heldbywomen24%LA4LocalManagementCommitteemembersnativetocountryindevelopingcountries42%n/aFormalclassroomtrainingreceivedindevelopingcountries(numberofemployees)65647LA10KeyBusinessPositions917n/aEmployeeswithpotentialtollKeyBusinessPositions3247n/aAgricultureandruraldevelopmentFarmerstrainedthroughcapacity-buildingprogrammes111800n/aMarketscoveredby(SAIN)sustainableprogrammes28n/aSuppliersauditedforsafety,qualityandprocessing3400n/aProductsandconsumersPopularlyPositionedProducts3:Europe(salesvolume,CHFmillion)4212n/aPopularlyPositionedProducts3:Americas(salesvolume,CHFmillion)43517n/aPopularlyPositionedProducts3:Asia,OceaniaandAfrica(salesvolume,CHFmillion)41722n/aNestléNutritionbusiness(sales2007,CHFmillion)8434n/aNumberofproductsrenovatedfornutritionorhealthconsiderations56445n/aIncreaseinnutritiousingredientsoressentialnutrients(numberofproducts)52603n/aReductionofsodium,sugars,TFAS,totalfatorarticialcolourings(numberofproducts)53842n/a-Reductionintransfattyacid(tonnes):December2003–February200734200n/a-Reductioninsugar(tonnes):January2003–December2006204000n/a-Reductioninsalt(tonnes):April2005–December20065000n/aProductscoveredbyNestléNutritionalCompass(%ofsales)95PR3ProductswithGDAlabelling(%ofsales)645PR3Infantformulamarketing(numberofinternalaudits)9PR7Infantformulamarketing(numberofexternalaudits)1PR7Foracompletelistofindicatorsanddenitionspleasevisitwww.
nestle.
com/csvNestléhasdevelopedperformanceindicatorstoprovideafocusformeasuringandreportingCreatingSharedValue.
ThesummarybelowformspartofourcommunicationofprogressontheUNGlobalCompactPrinciples(seepage52forfurtherdetails).
Unlessstatedotherwise,performanceindicatorsarefortheyearending31December2007.
1IncludesCO2fromfuelusage,refrigerantsandOzoneDepletionPotential(ODP)substances2Denedaspositionswithpeoplemanagementresponsibilities3Productsforthoseonlowerincomes42007PPPsalescover3marketsinZoneEurope,22inZoneAmericasand12inZoneAsia,OceaniaandAfrica5Basedonreportsofapproximately75%ofworldwideproductdevelopmentteams6BasedonreportsforEuropeanUniononlyTheNestléCreatingSharedValueReportCreatingSharedValueForabusinesstobesuccessfulinthelongtermithastocreatevalue,notonlyforitsshareholdersbutalsoforsocietyForabusinesstobesuccessfulinthelongtermithastocreatevalue,notonlyforitsshareholdersbutalsoforsociety.
WecallthisCreatingSharedValue.
Itisnotphilanthropyoranadd-on,butafundamentalpartofourbusinessstrategy.
Simplystated,inordertocreatevalueforourshareholdersandourCompany,weneedtocreatevalueforthepeopleinthecountrieswherewearepresent.
Thisincludesthefarmerswhosupplyus,ouremployees,ourconsumersandthecommunitieswhereweoperate.
AsanecessaryconditionforCreatingSharedValue,weneedtodemonstrateresponsiblebehaviour–byassuringcomplianceandsustainability.
ThisincludescomplyingwithNestléBusinessPrinciples,nationallawsandinternationalnorms,andensuringthatouractionsareenvironmentallysound,sociallyjustandeconomicallyviable.
ThispublicationisanintegralpartofouroverallCompanyreporting,andisacompaniondocumenttothe2007NestléManagementReportandGovernanceReport.
ItisarststepinprovidingincreasingamountsofworldwideinformationabouttheCompany.
WiththedevelopmentofGLOBE,ournewbusinessmanagementinformationsystem,wecanbegintoprovideincreasingamountsofinformationregardingNestléonaworldwidebasiswhichwerepreviouslyinaccessible.
AsadditionalareasofGLOBEareimplementedinfutureyears,inareassuchashumanresourcesandproductcomposition,wewillbeabletoexpandourreportingaccordingly.
TheNestléCreatingSharedValueReport