Nestle CSV Report Mar2008 en PDF

The Nestlé Creating Shared Value Report
The Nestlé Creating Shared Value

Creating Shared Value For a business to be successful This publication is an integral
Report in the long term it has to

create value, not only for its
part of our overall Company
reporting, and is a companion
shareholders but also for society. document to the 2007 Nestlé
We call this Creating Shared Management Report and
Value. It is not philanthropy or Governance Report. It is a first
an add-on, but a fundamental step in providing increasing
part of our business strategy. amounts of worldwide
Simply stated, in order to create information about the Company.
value for our shareholders and With the development of GLOBE,
our Company, we need to create our new business management
value for the people in the information system, we can
countries where we are present. begin to provide increasing
This includes the farmers who amounts of information
supply us, our employees, our regarding Nestlé on a worldwide
consumers and the communities basis which were previously
where we operate. inaccessible. As additional areas
As a necessary condition for of GLOBE are implemented
Creating Shared Value, we need in future years, in areas such
to demonstrate responsible as human resources and
behaviour – by assuring product composition, we will
compliance and sustainability. be able to expand our reporting
This includes complying with accordingly.
Nestlé Business Principles,
national laws and international
norms, and ensuring that our
actions are environmentally
sound, socially just and
economically viable.
For a business
to be successful
in the long term
it has to create
value, not
only for its
shareholders but
also for society

For a business
to be successful
in the long term
it has to create
value, not
only for its
shareholders but
also for society
Highlights Performance summary
Nestlé has developed performance indicators to provide a focus for measuring and reporting Creating Shared Value.
The summary below forms part of our communication of progress on the UN Global Compact Principles (see page 52 for further details).
Unless stated otherwise, performance indicators are for the year ending 31 December 2007.
Reducing our environmental footprint and Nestlé Creating Shared Value performance indicators GRI reference
reducing operational costs: pages 10-19 Total Group sales (CHF billion) 107.6 n/a
Total shareholder return: 1 January 1997 – 31 December 2007 342.5% n/a
76% 22% 3% 16%

Reduction of
28% Manufacturing
and our
environmental
Materials Raw materials and ingredients (except water [see below], million tonnes)
Packaging materials (million tonnes)
20.48
4.08
EN1
EN1
Increase of Reduction of Reduction of Reduction of water
production volume* packaging material energy use* greenhouse gas withdrawal* footprint By-products (for recycling, million tonnes) 1.07 EN22
for bottled water** emissions* Reduction of by-products since 1998 (per tonne of product) 58% n/a
Waste (for final disposal, million tonnes) 0.372 EN22
Reduction of waste since 1998 (per tonne of product) 58% n/a
Energy Direct energy consumption (Peta Joules) 85.3 EN3
Improving workers’ earning capacity and Energy saved since 1998 (per tonne of product) 45% EN5
creating a skilled workforce: pages 20-25 Greenhouse Direct CO2 emissions (million tonnes)1 4.1 EN16
gases
Reduction of direct CO2 emissions since 1998 (per tonne of product) 53% EN18
917 2.2 42% 65 647 Water Total water withdrawal (million m3)
Water saved since 1998 (per tonne of product)
157
59%
EN8
n/a
Number of Key Average number of In developing Number of
Business Positions successors per Key countries, local employees in Total water discharge (million m3) 101 EN21
Business Position Management developing countries Quality of water discharged (average mg COD/l) 62 EN21
Committee members who received formal
Packaging Source reduction (thousand tonnes): 1991–2007 326.3 n/a
who are nationals of classroom training
the country Source reduction (CHF million): 1991–2007 583.7 n/a
Reduction of packaging weight (per l of product) Nestlé Waters: 2002–2007 22% n/a
Helping farmers improve earnings and assuring our Governance ISO 14001/OHSAS 18001-certified sites (number of certificates) 171 n/a
supply of quality raw materials: pages 26-35 Sites audited through CARE programme 403 n/a
Our people Workforce size (total number of employees) 276 050 LA1
610 000 97 500 2-5%

Average annual milk
29.9 million
Lost Time Injuries (per million hours worked)
Total Injury Rate (per million hours worked)
3.7
7.5
LA7
LA7
Number of farmers Tonnes of coffee sourced Value of credit loans
receiving free directly from farmers district growth rate to farmers in 2006, Leadership positions2 held by women 24% LA4
technical assistance in 2006 in CHF Local Management Committee members native to country in developing countries 42% n/a
Formal classroom training received in developing countries (number of employees) 65 647 LA10
Key Business Positions 917 n/a
Employees with potential to fill Key Business Positions 3 247 n/a
Expanding lower income segment’s access to nutrition Agriculture Farmers trained through capacity-building programmes 111 800 n/a
and broadening our customer base: pages 44-45 and rural Markets covered by (SAIN) sustainable programmes 28 n/a
development
Suppliers audited for safety, quality and processing 3 400 n/a
77 billion 50 million
Products and
consumers
Popularly Positioned Products 3: Europe (sales volume, CHF million)4
Popularly Positioned Products 3: Americas (sales volume, CHF million)4
212
3 517
n/a
n/a
Potential market Number of consumers reached
for Popularly by our new factory in North-East Brazil Popularly Positioned Products 3: Asia, Oceania and Africa (sales volume, CHF million)4 1 722 n/a
Positioned Products, Nestlé Nutrition business (sales 2007, CHF million) 8 434 n/a
in CHF
Number of products renovated for nutrition or health considerations5 6 445 n/a
Increase in nutritious ingredients or essential nutrients (number of products)5 2 603 n/a
Mrs Maïmouna
Reduction of sodium, sugars, TFAS, total fat or artificial colourings (number of products)5 3 842 n/a Touré trades in
Improved nutrition for the consumer and increasing - Reduction in trans fatty acid (tonnes): December 2003 – February 2007 34 200 n/a Belleville market
sales /profitability for Nestlé: pages 38-43 - Reduction in sugar (tonnes): January 2003 – December 2006 204 000 n/a in the Treichville
district, south
- Reduction in salt (tonnes): April 2005 – December 2006 5 000 n/a of Abidjan, Côte
14.6 billion 6445 4.4 billion 1.88 billion
Products covered by Nestlé Nutritional Compass (% of sales)
Products with GDA labelling (% of sales)6
95
45
PR3
PR3
d’Ivoire. Affordable
Nestlé products like
Sales value of Number of products Sales value of products Total R&D expenses Maggi cubes help
products “60/40+” renovated for with Branded Active in 2007, in CHF Infant formula marketing (number of internal audits) 9 PR7 generate income,
tested in 2007, nutrition or health Benefits, in CHF Infant formula marketing (number of external audits) 1 PR7 and 90% of the
in CHF considerations in 2007 1 4 stalls in Belleville
Includes CO2 from fuel usage, refrigerants 2007 PPP sales cover 3 markets in Zone Europe, 22 in Zone Americas
2
and Ozone Depletion Potential (ODP) substances
5
and 12 in Zone Asia, Oceania and Africa offer Maggi for sale
Defined as positions with people management responsibilities Based on reports of approximately 75% of worldwide product development teams
3 Products for those on lower incomes 6 Based on reports for European Union only
* Reference year: 1998
** Reference year: 2002 For a complete list of indicators and definitions please visit www.nestle.com/csv
76% 22% 3% 16%

Reduction of
28% Manufacturing
and our
environmental
20.48
4.08
EN1
EN1
gases
157
59%
EN8
n/a
610 000 97 500 2-5%

Average annual milk
29.9 million
3.7
7.5
LA7
LA7
development
Products and
consumers
212
3 517
n/a
n/a
in CHF
Mrs Maïmouna
district, south
95
45
PR3
PR3
2
5
Contents
Creating Shared Value: the role of business in society 2
Company profile 4
About this report 6
Business Principles and strategy 8
Manufacturing and our environmental footprint 10
Our people 20
Agriculture and rural development 26
Products and consumers 36
Support of the UN Global Compact Principles 52

and Millennium Development Goals
Engaging with our stakeholders 54
Future reporting 55
Independent assurance – 56
Methodology & preliminary findings statement
Cover: Razia Berveen Left: Nestlé-

is a “Female Livestock sponsored training of
Worker” in Farooqa, agricultural extension
Pakistan. She is workers in Renala,
one of the Nestlé Pakistan. Passing
trainers passing on on vital skills in
knowledge and skills water management
to 4000 women encourages
who will go on to sustainable practices
become agricultural on dairy farms in
extension workers Pakistan. More on
under a Nestlé-United page 29
Nations Development
Programme (UNDP)
partnership scheme
in Pakistan
The Nestlé Creating Shared Value Report 1

Creating Henri Nestlé founded our Company
in 1866 on a single product, an infant
home – planet earth – and the future of
our business is inextricably linked to the
Shared Value: cereal, which was created to save

the life of a neighbour’s child. From
future of the planet.
Creating Shared Value means
the role that time onwards, the fundamental

strategy of our Company has been to
thinking long term, while at the same
time delivering strong annual results.
of business create value for society, and in doing so

create value for our shareholders.
One of the fundamental Nestlé
Corporate Business Principles is
in society As a result of this strategy, over

the past 141 years Nestlé has grown
that “we will not sacrifice long-term
development for short-term gain”.
from a small family-owned business to We aim for (and have achieved)
become the world’s foremost Nutrition, consistent improvements in annual
Health and Wellness Company. performance through what we refer to
However, Creating Shared Value for as “The Nestlé Model”: annual organic
society and investors means going growth of 5% to 6%, combined with
beyond consumer benefit. The very a sustainable annual increase in the
first edition of the Nestlé Corporate profit (EBIT) margin. But we resist
Business Principles stated that “Our short-term temporary business and
investments must be good for the social solutions. For instance, we have
Company and for the countries where purposely avoided being listed on stock
we operate”. exchanges which require reporting of
Creating Shared Value also means quarterly earnings, because we believe
bringing value to the farmers who this can lead to business thinking which
are our suppliers, to our employees, is too focused on the short term.
and to other parts of society. It means As a result of this approach to
examining the multiple points where business, independent research on the
we touch society and making very long- Nestlé brand indicates that globally
term investments that both benefit the we are rated very highly on “fulfilling
public and benefit our shareholders, our responsibilities to society”, and
who are primarily pension savers or particularly in developing countries.
retirees. The strength of the Nestlé brand,
Over a period of decades, we have including its performance in this area,
worked with millions of milk and is fundamental to the success of our
coffee farmers to make them better Company. It is a result of taking our
suppliers, and in so doing, have helped relationship with society seriously over
them to climb out of poverty and to many decades, and building a brand
prosper. Today, we work with about based on Creating Shared Value.
600 000 farmers globally, providing free However, we are not satisfied with
technical assistance, infrastructure and the status quo. For instance, we are
over CHF 29.9 million of micro-credit increasingly focused on providing
loans. About half our factories are in affordable, nutritious foods to lower-
Creating Shared Value means
rural areas in the developing world, income populations in developing
thinking long term, while at the
and have a profound impact on family countries. In 2007, working with
same time delivering strong income, quality of life, and the future national governments, we opened
annual results. One of the for the next generation. large, state-of-the-art factories in rural
fundamental Nestlé Corporate Creating Shared Value additionally areas of Brazil, China and Pakistan,
Business Principles is that means treating the environment in to produce food with high nutritional
‘we will not sacrifice long-term a way that preserves it as the basis value at an affordable cost for the local
development for short-term gain’
❜❜
of our business for decades, and population.
centuries, to come. Ending dangerous
trends in air and water pollution and
mismanagement is basic to our being
Peter Brabeck-Letmathe, able to sustain a growing Food and
Chairman and CEO, Nestlé Beverages business. We all share one
2 The Nestlé Creating Shared Value Report

Nestlé Chairman and
CEO Peter Brabeck-
Letmathe visiting a
Mexican coffee farm
in Jicotepec during a
training session for
the coffee growers
participating in
Nestlé’s Technical
Assistance programme.
Mr Gonzalo Contreras,
one of Nestlé
Mexico’s agronomists,
demonstrates a Coffee
Berry Borer insect
trap that enables
pest control without
using pesticides,
contributing to more
environmentally
sound coffee growing
conditions
This report is a first step in providing to the Global Reporting Initiative, the
data on a global level regarding UN Global Compact Principles and the
Creating Shared Value. It is an integral UN Millennium Development Goals.
part of our Company reporting, together As I prepare to hand over the Chief
with the 2007 Nestlé Management Executive Officer role to Mr Paul Bulcke,
Report of financial results. It follows a I reflect on the past eleven years as
publication two years ago on Nestlé, Nestlé CEO, during which time we have
in which Harvard’s Mark Kramer and increasingly sought to engage with
Professor Michael Porter established a society and to communicate about the
framework to examine our Company interdependent relationship of Nestlé
in Latin America in terms of Creating with the people of the countries where
Shared Value. As a result, we have we operate.
defined a multi-year plan for a step-by- In my continued role as Chairman
step expansion of our measurement of Nestlé, I will remain committed to
of Creating Shared Value. Access assuring that we continue to expand
to global information has been a our thinking and engagement in this
significant internal limitation on our area. This report is part of an evolving
reporting, but our new GLOBE business process, and I hope that it helps you
information system will, for the first to understand and evaluate Nestlé’s
time, allow us to provide global Nestlé interdependent relations with people
information in many areas where it is and the planet.
currently unavailable.
We began planning this report with
a study of outside views on what is
most relevant for us to report, and
thank the SustainAbility organisation
for their help in this. We have also
sought stakeholder feedback via an
engagement process in different
regions of the world facilitated by
AccountAbility International. As a Peter Brabeck-Letmathe
result, included in the report is a Chairman of the Board and
summary of Nestlé activities in relation Chief Executive Officer

Company profile
Nestlé is the
world’s leading
Nutrition, Health
and Wellness
Company
Vevey Nestlé factories by continent, 2007 Nestlé employees by geographic area, 2007
Location of the Company’s Africa Europe

headquarters, in Switzerland 27 184
Asia, Europe
Oceania Oceania 34.5%
19 and Africa
1866 Asia 27.2%

84
Year the Company was founded
107.6 billion
Total Group sales, in CHF Central
and
South America
77 Americas
10.6 billion North

America
89
38.3%
Net profit, in CHF

Source: Nestlé Source: Nestlé
276 050 Sales and organic growth by product category, 2007
Product category Sales (CHF billion) Organic growth

Number of employees
Powdered and liquid beverages 17.9 10.3%
Nestlé Waters 10.4 6.6%
480 Milk products and Ice cream

Nestlé Nutrition
20.7
8.4
7.8%
9.7%
Number of factories
Prepared dishes and cooking aids 18.5 4.0%
Confectionery 12.3 5.3%
86 PetCare
Pharmaceutical products
12.1
7.3
7.0%
11.0%
Number of countries in which
Source: Nestlé
the Company has operations

Far left: Inauguration Left: Kevin Duck, a have been added over Below: Products bring a nutritional
of our new milk Nestlé employee at the last two years to with proven “plus” while also
factory in Hailar, Cereal Partners UK, Nestlé brands sold superiority in addressing public
Inner Mongolia, manufacturers of in Europe. More on consumer preference health-sensitive
which opened in Shredded Wheat. page 42 and nutritional value nutrients. Enhanced
2007 backed by a Wholegrain are the foundation nutritional value
Nestlé investment of provides important of Nestlé’s strategy. is already driving
over CHF 20 million. nutritional value Our proprietary Nestlé’s business
More on page 14 and 1.6 billion testing process, growth. More on
additional servings called 60/40+, helps page 38

About this report This report is Nestlé’s first attempt at
a global Creating Shared Value Report,
Our reporting history
Previous reports have focused on
concerning our corporate social specific topics or regions, as detailed
responsibility and sustainability. It is below:
an integral part of our reporting ● The Nestlé Water Management
and a companion document to our Report – 2006;
2007 Management Report. Information ● Nestlé, the Community and the UN
covers Nestlé’s global operations for Millennium Development Goals – 2006;
the year ending December 2007, unless ● The Nestlé Concept of CSR as
otherwise stated and has been subject Implemented in Latin America – 2005;
to external assurance (see page 56). ● The Nestlé Commitment to Africa –
The report covers those business 2004;
impacts of particular concern to our ● Faces of Coffee – 2003;
stakeholders (see below for how these ● Nestlé and Water: Sustainability,
impacts have been identified and Protection, Stewardship – 2003;
prioritised). More information on a ● The Nestlé People Development
wider range of topics is available on our Review – 2002;
website at www.nestle.com/csv ● Sustainability Review – 2001;
We first explored the concept of ● Nestlé Environmental Progress
Creating Shared Value in our 2005 Report – 2001;
report, The Nestlé Concept of CSR, ● Nestlé and the Environment – 1995.
which focused on our Latin American Previous reports are available at
operations. Its authors, FSG – Social www.nestle.com/csv/downloads
Impact Advisors, led by Managing
Director Mark Kramer (also Senior Key issues
Fellow at Harvard University’s John F. This report focuses on areas which
Kennedy School of Government) then have a significant current or potential
challenged Nestlé to provide further impact on the Company, are of
evidence. Since then, in conjunction significant concern to stakeholders and
with our business areas and over which Nestlé has a reasonable
advisers including SustainAbility and degree of control.
AccountAbility, Nestlé has identified Working with SustainAbility and
and assessed critical issues, developed using their best practice methodology,
global performance indicators and we undertook a systematic process
engaged stakeholders in debate. to prioritise the issues deemed most
The result is this, our 2007 Creating critical to the Company, drawing on
Shared Value Report, a first step the opinions of investors, civil society
towards providing evidence that the groups and the media, and then
successful creation of long-term assessed them with Nestlé executives.
shareholder value is dependent also on Five areas were identified and
the creation of value for society. prioritised for inclusion in this report:
● Manufacturing and our environmental
footprint: Managing operations with
respect to the environment; and
how responsible safety, health and
environment practices create a more
efficient and cost-effective business
(pages 10 -19);

Creating Shared Value at each stage of the value chain
Agriculture and rural development Environment, Products and consumers

manufacturing
and people
Expertise and Providing ongoing Investing in local Building brands Increasing

support for farmers R&D and expertise manufacturing plants through responsible volume and
for suppliers marketing value of sales
Value for Securing supplies

of high-quality raw
Improving
community
Lowering
manufacturing and
Entering new and
emerging markets
Achieving
competitive
Nestlé materials relationships and distribution costs shareholder returns
product quality
Value for Improved yields and

increased incomes
Reducing
consumption of
Creating jobs in local
communities
Widening access to
nutritional products
Generating local
investment and
society natural resources consumers prefer economic growth
● Our people: Acting as a responsible Reporting boundary and scope

employer (pages 20-25); Data is provided for Nestlé’s wholly
● Agriculture and rural development: owned companies and subsidiaries,
Nestlé’s approach to agricultural excluding joint ventures and suppliers,
sourcing (pages 26-35); unless otherwise stated. As part of
● Nutrition, Health and Wellness: continuously developing our approach
Nestlé’s strategy of improving Nutrition, to shared value creation, we will
Health and Wellness as a driver of explore the possibility of widening the
business growth (pages 38-43); scope of our reporting.
● Marketing and communication: The environmental data refer
Marketing based on improving to factories only, including Cereal
information concerning nutrition Partners Worldwide and Dairy Partners
and health in a responsible way Americas. Alcon reports separately.
(pages 46-51). Health & Safety figures cover all Nestlé
employees, as well as approximately
The business case for Nestlé: 61 000 contractors.
simultaneous benefits for Nestlé
and society
Nestlé’s long-term objective is to create
sustainable value for its shareholders.
To do this, we need to create value for
the societies where we operate. The
diagram above shows how Nestlé’s
actions at each stage of its value chain
are driven by its business strategy, but
also create value for the societies where
we are present.
Look closer @ nestle.com
Complementary video and slide-
show material is summarised in “look
closer” boxes throughout this report.
At www.nestle.com/csv, you can also
listen to audio content, and read case
studies, policies and publications on
Creating Shared Value.

Business Nestlé has a strong corporate
culture, which unites people from
A framework for Creating
Shared Value
Principles widely different backgrounds in over

100 countries in a single corporate
Nestlé’s approach is based on:
● A long-term view;
● Strong presences in, and
and culture built around basic human
values and principles. Our first principle understanding of, countries and
strategy is that our investments must be good

for the Company and for the countries
cultures;
● Responsibility and accountability.
where we do business.
To deliver shared value we will also:
Business Principles ● Continue to develop new skills in
The Nestlé culture and relationship to response to rapidly changing markets
stakeholders is expressed in the: and operating conditions;
● Nestlé Corporate Business Principles; ● Continue to apply our global
● Nestlé Management and Leadership principles and standards consistently
Principles; and rigorously in all countries;
● Nestlé Code of Business Conduct. ● Foster sustainable development
Global policies on nutrition, in partnership with others, not just in
marketing, environment, occupational our own direct operations, but also
health and safety and human resources by collaborating with others on wider
support these principles. Nestlé’s issues where we can bring influence
principles and policies are available for and leadership to bear;
download from www.nestle.com/csv/ ● Understand and address the risks
downloads and opportunities raised by our most
Key management tools include the critical sustainability impacts;
Nestlé Environment Management ● Address them by strengthening our
System (NEMS) and our HR governance and management systems;
Management System. Formal and ● Develop clear goals – financial,
informal networks of Nestlé experts environmental and social;
also share information in order to ● Work with our business partners and
develop global best practices. stakeholders to deliver shared value.
Later sections of this report outline
specific social and environmental
challenges we are addressing in
relation to products, consumers,
employees, agriculture, sourcing and
manufacturing.
The diagram opposite summarises
Nestlé’s framework for Creating
Shared Value.

Nestlé’s framework for Creating Shared Value Engaging with our stakeholders
To understand the environment in
Nestlé Business Principles and commitments which the Company operates, Nestlé
to external standards experts throughout the Company
Agriculture Environment, manufacturing Products and consumers engage with consumers, investors
and rural development and people and NGOs to inform the actions the
company takes, the products we
Nestlé social and environmental Nestlé social and environmental Nestlé social and environmental
impacts impacts impacts
produce and the information we
communicate. This year, we have also
Nestlé commitments Nestlé commitments Nestlé commitments undertaken corporate engagement
and actions and actions and actions with opinion formers; see page 54 for
more details.
Nestlé also works closely with peers
Societal value + Nestlé and shareholder value to develop market-wide frameworks.
These include the Sustainable
Agriculture Initiative (see pages 33–35)
= Shared value and PROGRESS, a forum of leading
Fast-Moving Consumer Goods (FMCG)
In every part of our value chain, from sourcing to end product, Nestlé Business Principles brand producers supporting responsible
and external standards are the basis of all our activities. At every stage, we are committed
to managing impacts and delivering benefits, Creating Shared Value for Nestlé and society sourcing practices and sustainable
production systems.
Auditing and assurance standards Formal governance bodies

We ensure rigorous application of ● Operations Sustainability Council;
principles and policies through auditing ● Audit Committee;
and assurance standards: ● Risk Management Committee;
● Compliance against Corporate ● Group Compliance Committee.
Business Principles in the areas of HR, The Board is the ultimate
safety, health and environment is governance body of the Company
assured through our CARE programme, and is responsible for the supervision
which relies on an independent, of the Group. With the exception
external audit network; of Peter Brabeck-Letmathe (Chairman
● In addition, manufacturing sites are and CEO), all members of the Board of
being progressively certified against Directors are non-executive members.
standards including ISO 14001, OHSAS For full information on
18001 and ISO 22000; governance, please see our Corporate
● Infant food marketing activities are Governance Report 2007 at
independently audited internally and www.nestle.com/csv/downloads
externally;
● Suppliers are regularly screened and Setting objectives
audited. Nestlé has a culture of continuous
improvement and generally considers
historical performance trends to be
more revealing and useful for future
planning than setting individual
forward targets.

Manufacturing and our
environmental footprint
Opposite: Water
treatment plant, Agbara,
Nigeria. Nestlé invests
Nestlé factories are a major engine
in water treatment
plants in developing of rural development and of new
countries even when
there is no legislation
because maintaining
environmental quality standards,
good water quality in
the areas surrounding
our plants has direct
particularly in developing countries.
benefits for our
business. This plant has Nestlé has made major strides in
served as a model for
another treatment plant
in Tema, Ghana
reducing environmental impact,
thus helping to reduce costs and
ultimately improving profitability
and long-term sustainability.
Creating Value for Nestlé Value for society

Shared Value Building high-quality, high-performing Our major investments in rural areas help
factories with good and continuously workers acquire new skills and higher
improving environmental performance, income, develop local suppliers and
supported by strong local businesses, entrepreneurs, and raise environmental
enables Nestlé to achieve sustainable standards.
profitable growth by meeting the increasing
demand for food and beverages. As
a company that requires high-quality
agricultural raw materials and clean water
throughout its value chain we depend on a
clean environment and the sustainable use
of natural resources to assure the long-term
success of our business.

18%
Proportion of factories certified to ISO 14001 and/or OHSAS 18001
The global context Environmental management
Our principle is to manufacture, We have invested significant
when possible, in countries resources in the Nestlé
from which we source Environmental Management
commodities, rather than System. NEMS helps ensure
to export the raw materials. compliance with legislation
Regional manufacture for and with the Nestlé Policy
regional markets means our on the Environment, helps
products have fewer miles Nestlé to achieve continuous
to travel, resulting in lower performance improvement and
transportation costs and contributes towards sustainable
less environmental impact. development.
Today, about half our factories In addition, we are seeking
are in the developing world, external certifications for all our
located primarily in rural factories in line with ISO 14001,
areas, reflecting our long-term the internationally recognised
approach to investment and environmental management
our ability to operate in diverse system standard. This provides
and complex environments. For a common language and
example, Nestlé has operated enables compliance to be
in South Africa since 1927 demonstrated more easily to
and in Brazil since 1921. And All these facilities have been our stakeholders.
we continue to manufacture equipped from their inception 18% of our factories are
coffee in Côte d’Ivoire despite with up-to-date environmental certified to ISO 14001 and/or
the sporadic violence and technologies, such as plants OHSAS 18001. We aim to
civil unrest there over the last to treat the water used in certify 100% of our factories
few years. Among Nestlé’s manufacturing processes by 2010.
major industrial investments in before returning it clean to the 84% of our factories have
Estelle Kouadio works
developing countries in 2007 ecosystem. in Nestlé’s Maggi been audited within the scope
were: Our key environmental factory near Abidjan, of our CARE programme.
● Pakistan: The world’s focus areas are water, energy Côte d’Ivoire, where
we have continued
largest milk processing plant and packaging. As well our operations
in Kabirwala. Investment: as managing these areas despite severe civil
CHF 90 million; holistically throughout our unrest in recent years
● Brazil: Popularly Positioned business, we are increasingly

Product plant in Feira de working along the whole value
Santana, Bahia province. chain to positively influence
Investment: CHF 60 million; how they are addressed beyond
● China: Milk processing plant our operations. This helps to
in Hailar, Inner Mongolia. improve quality, reliability and
Investment: CHF 20 million. costs from farm to fork.
For full coverage of all
environmental performance
areas, including transportation
and refrigeration, please visit
www.nestle.com/csv/
environment

403
Number of factories audited within the scope of our CARE programme
Reducing our carbon Greenhouse gases: CO2 emissions,
footprint 2003-2007*
Nestlé’s drive for improved 5
energy efficiency has a 4.74

4.41
direct positive impact on 4 4.31
4.05 3.92
our greenhouse gas (GHG)
emissions. Additional reduction 3
of GHG emissions is achieved

through a number of our 2
factories switching to cleaner

1
fuels such as natural gas.
Nestlé has reduced GHG
0
emissions by 17.3% since 2003. 2003 2004 2005 2006 2007
We are committed to continue *10 6 Tonnes
Source: Nestlé
our established track record
of improvement for the
foreseeable future. Greenhouse gases: CO2 emissions At the Nestlé Product We recognise the need to
per tonne of product, 2003-2007* Technology Centre
Along with over 2000 of the continue working with others
in Beauvais, France,
world’s largest companies, 150
we are working with to implement our strategy
Nestlé participates in the 142 partners to develop worldwide. Recent progress
125 133 commercial ice-cream
Carbon Disclosure Project includes:
118 freezers using natural
(CDP), in order to share our 100 106 refrigerants and l Generating energy from the
strategy and results. This is 95 other new cooling combined production of steam
75 technologies that
part of our ongoing effort to and electricity (co-generation),
have low energy
enable our performance to 50 consumption, no effect which improves energy
be benchmarked and drive on the ozone layer and efficiency and reduces
are inherently safe in
further improvements. We are 25 greenhouse gases emitted;
public use
also among a small number l Methane recovery
0
of companies participating in 2003 2004 2005 2006 2007
(methanisation). We
a CDP trial to raise awareness *kg
increasingly recover methane
Source: Nestlé
among suppliers. We are gas generated from our water
leading this pilot in our treatment plants and we use it
own supply chain to inspire Insight Investment, the asset as a fuel. In our Shimada factory
performance improvements manager of major institutional in Japan, for example, this has
and help address the issue of investor HBOS Group, gave resulted in a 38% reduction in
efficiency and energy savings a 100% score to Nestlé for GHG emissions.
beyond our own operations. governance of carbon issues.*
We have also been identified
as the most carbon-efficient
company among the Dow
Jones Stoxx 600 food products
companies, on the basis of
direct GHG emissions per
revenue (Merrill Lynch, Carbon
Leaders: Quality Win-Win
Stocks, 31 August 2007).
* Nestlé’s overall score in the Insight

Carbon Assessment was 57%

Industrial investments: Hailar milk processing plant, China
Nestlé’s state-of- income of around

the-art milk factory CHF 500 000 per
in Hailar, Inner day, fostering
Mongolia was opened rural sustainable
in July 2007 with development for
an investment of the communities
over CHF 20 million. concerned. At least
Since Nestlé began 200 000 people benefit
investing in China directly and indirectly
two decades ago, from Nestlé’s milk
we have opened activities in China.
21 factories and Hailar was one of
today employ about three major Nestlé
13 000 people. Nestlé investments in rural
buys fresh milk from regions in 2007,
some 40 000 Chinese the others being in
farmers and Pakistan and Brazil
provides them with
an overall regular

Energy consumption, 2003-2007*
3
2.83 Integrating CSR concerns

2.73
2.42
into a company’s strategy –
2 2.21 instead of considering them
2.08
merely as add-ons – is
central to implementing
1
this concept meaningfully.
For developing countries,
this also means giving
special attention to
0
2003 2004 2005 2006 2007 developmental concerns,
*10 9 Joules (GJ) per tonne of product such as upgrading local
Source: Nestlé
We have reduced our energy

suppliers, training and
usage by 3% from 1998 to 2007 transfer of technology.
while in the same period to develop a global reporting Co-generation plant at
increasing our production volume Mainz coffee factory, Nestlé is certainly taking a
standard and indicators on
by 76%. Our objective is to Germany, where number of exemplary steps
achieve annual energy savings of sustainability in the food spent coffee grounds
1%-2% per tonne of product over sector. Nestlé is also among are used as fuel
in this direction
the next five years
150 companies calling for a
comprehensive, legally binding
We have also recently UN framework to tackle climate
aligned our reporting of GHGs change, in a communiqué
to internationally recognised published by The Prince of
standards (Greenhouse Gas Wales’ Corporate Leaders
Protocol, WBCSD/WRI 2004) Group in December 2007.
so as to present an accurate For more information,
and consistent account of please visit www.nestle.com/ Karl P. Sauvant, Ph.D., Executive
our emissions through the use csv/climatechange Director, Columbia Program on
of standardised approaches International Investment, and
Co-Director, Millennium Cities Initiative
and principles. Improving our energy
We are among the first efficiency
food companies to join the Nestlé improves its energy
Global Reporting Initiative efficiency, saving around
multi-stakeholder programme CHF 33 million in 2007 through
these efforts, mitigating the
impact of soaring energy
prices. In addition, we also use
renewable energy sources,
such as coffee grounds
generated in our coffee
factories, to reduce our reliance
on non-renewable fuels.
Nestlé invests significantly in
raising awareness, training
and technical improvements
(approximately CHF 40 million
annually).

Reducing our water Aquapod is an
innovative form
consumption
of packaging that
We are committed to appeals to children,
becoming the most efficient encouraging them
to choose water
water user among food
in preference to
manufacturers. Reduction of sweetened soft drinks
water consumption has been
part of management practice
at plant level for many years.
A formalised, company-wide
effort initiated in 1997 has
achieved further significant
efficiencies.
Nestlé Waters is the
world’s bottled water
leader but withdraws a very
small percentage of global Water withdrawal versus production volume, 1998-2007*
freshwater usage annually. Production volume Water withdrawal
Total volumes withdrawn by 200
Nestlé Waters represent no 180
more than 0.0009% of all 160
water withdrawn by humans. 140
More than half of this 120
water goes directly into the 100
72 bottled water brands we 80

60
sell worldwide and quantities
40
withdrawn are strictly aligned
20
with bottling unit needs. The
0
rest is mainly water used % 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
for operational processes *Relative to index 1998
Source: Nestlé
and cleaning. The amount
of additional water we need Since 1998, Nestlé has increased its food production volume by 76%.
Over the same period we have reduced our water withdrawal by 28%.
to produce 1 litre of bottled We aim to reduce annual consumption per tonne of product further by
water is currently 0.81 litres. 2%-3% over the next five years
Through rigorous practices
in the production process,
this represents a reduction of Bottled water, health Nestlé Waters strives to be a
around 34% over 6 years. and environment responsible water user, working
There is growing consumption in line with local regulation
of bottled water, and level or as well as our own business
decreasing consumption of standards. A dedicated team of
sugared soft drinks. This is hydrogeologists provides advice
positive for health, but does and monitors the water sources
this growing consumption of to ensure good stewardship.
bottled water have a negative This is both for the benefit of
environmental impact? society, and for Nestlé to be
able to sustain a long-term

business. Bottled water also
uses far less water than other
bottled drinks. 70% of the
world’s water is withdrawn by
agriculture, while bottled water
uses very little. Transportation
is an issue to be addressed,
and we are working to shorten
the distance from source to
consumer. Regarding use of
plastics, Nestlé has developed
the lightest-weight bottle in the
industry, which is also twice as
light as soft drink bottles. The
issue of waste produced by
discarded water bottles is part
of a wider problem that only
recycling will solve. While water
bottles make up less than 1%
of refuse in public dumps in
the USA, plastic bottles can be
recycled, melted and reused.
Nestlé supports a wide variety
of recycling initiatives, including
the recent New York marathon,
where we worked with the
New York Road Runners to At the Gerber baby food Returning cleaned water Organic load in waste water, 2007*
factory in Fremont,
recycle all the 75 000 containers to the ecosystem Before purification After purification
Michigan, water
used to provide water to the used in primary plant Our first objective is to minimize 120 000
competitors. But much remains processes (such as the volume of water used in
washing raw materials, 107 500
to be done in recycling of all our operations. Secondly, we
pictured) is recycled 90 000
types of refuse, which must be for secondary uses (for continue to invest in plants
tackled as an integrated system. example, washing floor to treat water after it has
drains). It is then piped
In the majority of places where been used in manufacturing, 60 000
4 miles down the road
we sell bottled water, most to the Gerber 450 acre returning cleaned water to
consumers also drink tap water. farm to irrigate crops the ecosystem. We decrease
that are grown to
However, the convenience the organic burden to the 30 000
produce animal feed
of chilled water in a bottle for local farmers environment by treating water
continues to be increasingly to remove the vast majority of
0 6 250
demanded by consumers and organic pollutants. *Tonnes Chemical Oxygen Demand (COD)
Source: Nestlé
preferred to soft drinks.
Treated water leaving Nestlé
factories is returned cleaned to
the ecosystem, containing
reduced levels of COD (Chemical
Oxygen Demand, or organic
pollution in water) after
purification in Nestlé plants

Left: Khun Taleungkiet
at the Chachoengsao
coffee factory in
Thailand, testing the
quality of water that
has been treated for
re-use. It is our first
“zero water discharge”
factory that recycles
almost all water, either
in cooling towers or
for irrigation of an
adjacent coffee nursery
Optimizing packaging
Packaging is essential for food
safety and freshness, and it
also provides consumers with
nutritional and environmental
information at point of
purchase. Nestlé has adopted
an integrated approach:
Key challenge reducing materials used
where feasible; providing
Sustainable water use to improving the management meaningful information to
As populations rise and of water outside our direct consumers about recycling and
standards of living improve, operations. We support recovery; developing recyclable
demand for fresh water is Project WET, an education packaging from renewable
forecast to increase. Over programme promoting water resources; and supporting the
1 billion people currently lack stewardship. Since 1992 this development of public recycling
access to water and over has reached several million schemes.
2.4 billion lack access to basic children in over 20 countries. We have reduced the volume
sanitation. Nestlé needs access Agriculture withdraws some of packaging material used per
to clean water to conduct its 70% of available freshwater litre of bottled water by 22%
business, consumers need globally so we are increasingly over the last 6 years, saving
it to prepare many of our working to help our supply 257 000 tonnes of packaging
products, and our supply chain chain to improve their practices material. We also continue to
partners need it to produce the through our extensive network develop innovative packaging
agricultural raw materials we of agricultural advisers materials. We were the first
rely on. (see Agriculture and rural company in Europe to introduce
development section). As a Plantic, a biodegradable
Our response founding signatory of the UN alternative to plastic, made
We have reduced water Global Compact CEO Water from renewable resources, for
withdrawal in our direct Mandate in July 2007, Nestlé packaging manufactured food
operations by 28% since has also invited business products.
1998. At the same time leaders to address the global
our production volume has challenge of water access and
increased by 76%. As well scarcity.
as managing our direct Read more at
water consumption, we are www.nestle.com/csv/water
increasingly contributing

CHF 583.7 million
Cost savings from optimized packaging volumes over 16 years
Assessment, which follows
the latest methods established
in international standards
(ISO 14040:2006 and ISO
14044:2006) and has been
reviewed by a panel of four
external experts.
For more information,
please visit www.nestle.com/
csv/packaging
Looking ahead
We will continue to develop our
environmental management,
with a focus on:
● Maintaining continuous
improvements in our
environmental performance;
● Encouraging our business
partners to apply environmental
management systems
based on the ISO 14001
international standard in their
own operations;
● Communicating reliable
environmental information to
Communicating spoon and including recovery consumers in a meaningful and
environmental information of packaging. This results from straightforward way.
on our packaging the weight reduction achieved
We provide our consumers by replacing a glass jar with
and business partners with a plastic pot, as well as
clear, accurate environmental energy savings from the new
information based on scientific manufacturing process and
evidence. Different means the energy recovered from
exist to communicate this used plastic pots. It has been
Above left and above:
information efficiently. One substantiated by a Life Cycle NaturNes baby food
option is the packaging itself. being microwave-
For example, our new NaturNes tested at the Nestlé
technology centre in
baby food pot shows that Singen, Germany, to
it requires less energy and confirm the optimum
produces fewer CO2 emissions settings and methods
for uniform heating
than the previous version – of the product by
over its life cycle from farm to consumers. Information
on product use and
packaging recycling is
communicated clearly Look closer @ nestle.com
on-pack Watch a video on energy
efficiency in 4C coffee
production at
www.nestle.com/csv/stories

Our people
Opposite: Workplace
safety at Nestlé is
non-negotiable.
Long-term investments in training give
Whether working
at the Nestlé people better job opportunities
Shuangcheng milk
factory in China or at
our other operations
and increased income, and provide
worldwide, the same
universal standards of
safety are applied
Nestlé with a skilled workforce to
manufacture food products.
Our principle is that each employee
should have the opportunity to develop
his or her potential in a safe and fair
workplace where they are listened to,
respected and valued.

Shared Value By maximizing the performance of our Nestlé offers employment opportunities
people and ensuring they have the worldwide, providing the potential
motivation and skills to perform to their full for a better standard of living and
potential, we achieve superior business self-development.
results and future sustainable growth.

Our people 21
276 050
Number of employees worldwide
Health and safety at work Total Injury Rate and Lost Time
The Nestlé Occupational Health Injuries, 2003-2007*
Total Injury Rate Lost Time Injuries
and Safety Management
20
System (NSMS) was revised in
19.6
line with the 2007 edition of the
18.6
international standard OHSAS 15
18001 and reissued to all
12.2
Nestlé operations, reinforcing 10
10.6
our commitment that “Safety
9.7
9.1
is non-negotiable”. We are
7.5
7.0
5
also working towards external
4.8
3.7
certification of our factories
0
against OHSAS 18001. This will 2003 2004 2005 2006 2007
provide a common language *Per million hours worked
Source: Nestlé
around our health and safety
management systems, and In the period 2003-2007, the
number of injuries with time away
make it easier to demonstrate from work per million hours
implementation of these worked (for employees and
contractors) reduced by 65%.
standards to our stakeholders. Our aim for 2008 and subsequent
Despite our continuous years is to continue to reduce
injuries by 10% or more every year
efforts to prevent accidents
The global context and foster a culture of safety,
Nestlé has a strong corporate we deeply regret that there Also of high importance
culture which unites more were 15 fatalities in 2007 due is the independent audit
than 275 000 people from over to accidents while at work programme, CARE, which
100 countries. 34.5% of our (11 employees, of which 8 were reviews Nestlé’s compliance
workforce is in Europe, 38.3% traffic accidents offsite – often with our Corporate Business
in the Americas and 27.2% in challenging rural areas with Principles ( available for
in Asia, Oceania and Africa. poor and limited infrastructure – download at www.nestle.com/
Around half of our employees and 4 contractors). csv/downloads) in the areas of
work in developing countries, A key requirement of NSMS human resources, safety, health
with a high proportion Nestlé depends on a is to ensure that Behaviour- and environment, including
skilled and motivated
employed in their country of workforce for Based Safety (BBS) is in compliance with local laws.
origin. In Africa, for example, continued success. place in all our factories and
only approximately 3% of our Mechanic Frank distribution centres. Nestlé’s A fair workplace
McClamma and
workforce is not originally from machine operator BBS programme concentrates Nestlé has a strong
that continent. Leconya Rhym at the on awareness-raising and management framework which
Nestlé Waters factory personal and interpersonal guides employee relationships.
in Madison, Florida,
manufacture Aquapod, responsibility for safety and is Principles are laid down in the
an innovative concept critical in reducing accidents. Corporate Business Principles
in encouraging In addition and in recognition and Human Resources Policy,
children to drink water
in preference to of the employee deaths due to with guidelines adapted to local
sweetened soft drinks traffic accidents, a major focus laws and norms. It is our policy
on road safety will commence to abide by national laws in all
in 2008 to help minimize countries in which we have
vehicle-related accidents. operations and to comply with
the ILO conventions on child
labour and fair employment.

Nguyeãn Thanh Tuaán Key challenge
and Nguyeãn Vaên
Tuaân at the Dong Nai
factory in Vietnam, Empowering high-
keeping fit in their performing teams
lunchbreak by playing
Within diversified,
table tennis. Nestlé
runs wellness-at- decentralised operations in
work programmes emerging as well as developed
worldwide
economies, our key challenge
is to continuously build
local capacity, expertise and
leadership to raise standards
across the board.
Our response
Nestlé continuously promotes
a culture of engagement
Nestlé’s compliance with Listening and responding and performance and strives
local laws and with our to employee views towards best practice. For
Corporate Business Principles Businesses throughout example, we have introduced
is verified through CARE, our Nestlé listen and respond to Mission Directed Teams
independent audit programme, employees. Nespresso globally (MDTs) in a number of our
which covers areas of human conducted an independent operations. Each MDT is
resources, occupational health survey, which provided a mini-business focused
& safety and environment. For constructive feedback from on delivering high-quality
environmental performance, employees on a range of products and services to
see the Manufacturing and topics. A clear finding was that other internal MDTs. Early
our environmental footprint Nespresso employees wanted results from pilots in our
section on pages 10-19; for the business to take a fresh manufacturing plants show
occupational health & safety, see look at internal communication. value being delivered through
the graph on the opposite page. Nespresso responded efficiency gains, higher levels
Nestlé respects the firstly by running structured of engagement and service
right of employees to form workshops to help translate improvements. For example,
representative organisations opinions into action. Various MDT made a significant
and to join (or not to join) initiatives were implemented contribution in Blacktown,
trade unions, provided this as a result. These range from Australia, where past results
right is freely exercised. It new opportunities to meet have shown customer
is our policy to govern the and share (“mystery lunches” complaints falling by 33% on
relationship with unions in and monthly departmental prior year (a key focus was
accordance with national laws product quality issues), and
and the practices outlined in absenteeism reduced by 6.5%
the Nestlé Corporate Business to below 3% of hours worked.
Principles. There are Collective
Bargaining Agreements in
19 developing countries,
covering 39 340 employees.
Our people 23
Developing future leaders
We need to maintain a global

pipeline of talented people
who can help us keep our
competitive advantage and
achieve sustainable growth.
We have 917 global Key
Business Positions and have,
in 2007, identified around
3000 current employees who
have the potential to fill these
and other key positions.
Other key statistics:
● For every global Key
Business Position, there are
more than two successors on
average;
● 24% of leadership positions
(defined as having people
management responsibilities)
are occupied by women.
With manufacturing
processes, headquarter
operations and R&D capacity
structured to build significant
local presences, Nestlé relies
on competent local workforces
and leadership. 42% of Local
Management Committee
members in developing
countries are native to that
developing country.
Nestlé employees
undergoing intensive
training courses
at the Rive-Reine
International Training
Centre, Switzerland

meetings) to improved Building our capabilities
information sources (intranet We need to build the
and publications library). In capabilities required for
By investing in safe
addition to business-specific short- and long-term success
workplaces, and
surveys like Nespresso’s, through on-the-job experience,
empowered, well-trained Nestlé is conducting a global coaching relationships and
and professionally employee survey. This is off-the-job learning. In 2007,
developed people, currently underway, and we will 65 647 employees in
businesses at once create be able to report on it in future 33 developing countries
increased productivity and publications. received formal classroom
loyalty for themselves, training.
but also enhance the Supporting employees
local talent pool. This through business changes
phenomenon is especially In March 2004, Nestlé Purina
acute in developing PetCare (NPCC) announced
the intention to close their
countries and is evident
pet food canning factory in
in particular for large
Barrhead, Scotland, due to
companies like Nestlé the continuing downturn in
who are integrated into the canned pet food industry.
developing country The age and layout of the
societies factory ruled out any potential
upgrade to dry or foil-sealed
pet foods. 206 people were
employed at the factory. NPCC
formed a resettlement team
made up of management and
unions, which worked in close
partnership with local job and
training agencies. Employees
were supported with job search
Rob Goffee, Professor of Organisational
Behaviour, London Business School services, CV preparation,
careers and training advice, a
jobs fair and pension advice.
197 of the former employees
responded to a post-closure
survey. 85% of respondents
had used the services provided.
96% rated out of 10 (most
positive) the services at 5 or
above. 62% of respondents
were in work approximately
three months after exit from
the plant, with only 7% still
actively seeking employment at
the time of the survey. Others
specified “taking a break”, “still
with Company” and “Further/
Higher Education”.
Our people 25
Agriculture and rural
development
Opposite: Mrs Asso

Koffi, owner of a
cassava plantation
Nestlé spends approximately
from which Nestlé
purchases supplies, CHF 13 billion a year on agricultural
with Pondo Kouamé,
head of Nestlé
agricultural services
materials such as milk, coffee and
in Côte d’Ivoire.
Nestlé is supporting
government and UN
cocoa. So, although we do not own
efforts in West Africa
designed to increase any agricultural land or operate
the quantity and
quality of production,
as cassava plays a vital
commercial farming activities,
role in employment
of African famers and
in feeding millions of
we seek to improve farmers’ living
people throughout the
continent standards, environmental practices
and water usage. This gives Nestlé
access to high quality raw materials.

Shared Value By engaging closely with the communities Thousands of farmers use our advice
that supply us with agricultural and technical assistance to produce
commodities, we benefit from a more greater yields of higher quality crops
secure supply of better quality raw using fewer resources, which benefits the
materials, which lowers our procurement environment and increases their income.
costs (due to fewer middlemen, fewer Rural communities also gain from wider
defects and reduced waste), and results employment and economic development
in better end products, helping to ensure opportunities. Consumers also know
consumer preference and profitable growth the products they buy are safe, of high
for our brands. quality and produced using sustainable
agricultural practices.

The global context
The world currently faces three
major issues that particularly
influence the future of our
business and our industry.
They are:
● The growing demand for
food in countries like China and
India because of improving
family incomes;
● The growing scarcity of
water globally;
● The continued poverty, ill
health and lack of purchasing
power of over 2 billion people
in rural areas.
The problem of water
scarcity must be addressed
while increasing production
of food, and at the same
time, we must work to bring
rural communities into the
cash economy with adequate
access to nutrition, water and
sanitation.
Rural development Our team of 675 hundreds of farmers in Zhengjun Wang,

who owns nine cows
Nestlé has a long history of agronomists and approximately northern Thailand to grow
and six calves, has
helping farmers to be better 5000 extension workers Arabica coffee. They receive been supplying milk
and more prosperous suppliers. and contractors currently practical training on coffee to the Nestlé plant
in Shuangcheng,
This has a positive long-term offers support and training fertilisation, irrigation and
North-East China,
impact on economic and assistance to 111 800 farmers harvesting techniques, which since 1990. A Nestlé
environmental development via 28 projects in 21 countries helps their coffee to command project in the milk
district now provides
and standards of living, as well as maintaining a higher price. We have taken
farmers with proper
sometimes helping entire ongoing dialogue with a similar approach in Yunnan manure storage
regions to increase agricultural traders, governments and Province, China, where Nestlé facilities, which
reduces impact on
productivity and economic NGO partners. There are no has set up a training centre,
water sources and
performance. This often begins conditions attached to the demonstration farm, nursery also creates a biogas
by helping farmers through assistance we give and farmers and buying station. energy source for
farmers’ homes
agricultural programmes that are not obliged to sell their
share good environmental and produce to Nestlé.
water management practices. Such projects secure
supplies of higher-grade raw
materials, which ensure we
can maintain production of
high-quality end products.
For example, Nestlé’s Doi
Tung Experimental and
Demonstration Farm helps

United Nations Development Key challenge
Programme Partnership
A joint programme between Biofuels
the UNDP, Nestlé Pakistan In addition to being a source
and Engro Foods has trained of food, some crops such as
4000 women agricultural maize and wheat can also be
advisers, whose assistance and grown as a source of energy.
advice is helping to increase Such “biofuels” are considered
milk production among dairy by some to be a long-term,
farmers in rural Pakistan who low-carbon energy option.
supply fresh milk to Nestlé. Nestlé believes that
To build confidence in decisions about energy
the milk trade, Nestlé India sources must be based on
established well-equipped cost–benefit and life-cycle
milk collection centres, and its analysis, and should consider
field staff provide farmers with their full social and
technical assistance and advice More than 4000 women Each of the key regions environmental impact,
in Pakistan are learning
about animal health, breeding from which Nestlé sources including the effects on food
new agricultural
and fodder production. This skills, such as raising its products has its own prices and water. Current
has helped to raise the quality livestock and managing political, socio-economic and biofuel production has
water resources,
and value of the milk produced environmental conditions, but contributed to significant price
through training
by 85 000 farmers, and, we provided by Nestlé Nestlé works to protect the increases and is likely to
believe, improved the health security of its supply, the quality eventually create food
and economy of the local of the resources available, shortages for millions of
community. Nestlé is also and rural employment and low-income consumers.
working with schools and development. Agriculture already withdraws
local associations to improve For example, soil erosion can 70% of available water
drinking water and toilet be a challenge in mountainous sources, and with every litre of
facilities in schools within the countries with heavy rainfall biofuel from irrigated maize or
milk district serving the Moga like the Philippines. Nestlé’s soybeans requiring up to
factory, while another project agricultural experts have 5000 litres of water to
helps to fund medicines for a worked with the Ministry of produce, any large-scale
local tuberculosis clinic. Agriculture and local coffee expansion will make water
farmers to implement the SALT even more scarce.
Sourcing profile (Sloping Agricultural Land Furthermore, depending on
Nestlé buys CHF 8 billion of Technology) programme. By crop type and location,
agricultural commodities from planting along contour lines and greenhouse gas savings
emerging economies every using vetiver grass to bind the compared to fossil fuel can
year – around two-thirds of the soil, erosion has been reduced actually increase in
Company’s total expenditure by up to 90%, soil fertility some cases.
on raw materials – and nearly has improved and crop yields
40% goes towards three key increased.
commodities: milk, coffee
and cocoa. Over half a million
farmers (610 000) supply
Nestlé directly.

Nestlé sourcing profile, 2006
Milk Coffee Cocoa*
11 850 000 tonnes 750 000 tonnes 370 000 tonnes Food businesses in
CHF 4000 million CHF 1600 million CHF 930 million
Other: fruit, vegetables and cereals partly sourced directly from farmers;
particular have a significant
sugar, oil, meat, spices and other ingredients sourced through trade interest in enhancing
*Cocoa beans, powder, butter and liquor
Source: Nestlé agricultural productivity
and sustainability. World
Milk and farmers are assured regular population is rising rapidly,
Nestlé is the world’s largest payment at a fair price. and fortunately more and
milk company, sourcing Nestlé’s milk district model, more people are emerging
11.8 million tonnes of milk from introduced in Switzerland in from poverty. They are
more than 30 countries. But as the 1870s, has been replicated demanding more and
rising disposable income levels and adapted for use in Latin better food, creating great
in developing countries lead America, the Caribbean, Asia opportunities for farmers
to greater demand, securing and Africa – and most recently
and the food industry. The
a plentiful supply of fresh, in Inner Mongolia. On average,
challenge, though, is to
high-quality milk in economical milk districts are growing by
and efficient ways remains 2–5% annually, and some by
make sure this demand can
a challenge. as much as 10%, generating be met, not just today and
Nestlé’s approach includes millions of dollars into rural tomorrow, but in the long
the development of milk economies every year. run – in spite of the world’s
districts, which involves Caquetá, a poor and sparsely limited resource base. And
regular purchasing of milk populated region of Colombia nowhere is this more
from local farmers, regardless with over 1 000 000 hectares evident than in the area of
of how much or how little of grazing land, is home to water security. Companies
they produce. It also requires a Nestlé milk district. Over that actively engage in
adapting or installing collection, the last 30 years, Nestlé has helping agriculture – as
storage and chilling facilities, installed three plants and
the biggest water user –
and arranging transportation 220 cooling stations, and
enhance sustainable water
to a local factory. Such regularly provided 2800 farmers
investments demonstrate to with technical advice on animal
use, are investing in their
local communities that we will nutrition, farm development own supply chain security
be there for the long term. and road construction to
Local communities also improve the quantity and
benefit from much more than quality of their milk.
just a market for their milk.
Training is provided through
Nestlé agronomists and field
technicians, and sometimes in
partnership with a local college
or university. Quality control, Professor Stefan Tangermann,
traceability and food safety Director for Trade and Agriculture, OECD
systems are also put in place,
financial support is available,

97 500
Tonnes of coffee sourced directly from farmers
Coffee
Coffee is the second most
traded commodity in the world
after oil, and grows best within
the “coffee belt” between the
tropics of Cancer and Capricorn
that spans Latin America, Africa
and Asia. For many countries,
coffee is a valuable export,
and for some communities,
its cultivation is the primary
economic activity. The coffee
supply chain is extremely
complex, with 80% of farmers
operating as smallholders with
a few hectares of land or less.
Around 25 million smallholders
depend directly on coffee
farming for their livelihoods,
and a further 100 million people
are involved in the industry as
a whole. Nespresso AAA Sustainable Working closely with
In coffee-producing Quality coffee the Rainforest Alliance, our
countries where we have Only about 2% of the world’s commitment includes:
factories, our direct buying speciality grade coffees ● Paying farmers a premium
system allows farmers to deliver meet the specific profile of price for their AAA coffee;
coffee directly to our buying Nespresso’s Grands Crus. So ● Setting out the practices
stations. Nestlé’s seven buying to ensure a consistent supply in required by the AAA standard;
stations in southern Thailand, the future, we encourage and ● Analysing the data from
Nestlé agronomists
for instance, receive coffee from and Colombian reward farmers who grow such the independent verification
about 20 000 farmers who, by producers share best grades, developing lasting, process conducted by
avoiding intermediaries, receive practice methods for mutually beneficial relationships Rainforest Alliance;
coffee-drying, just
a higher price. one of the sustainable and improving traceability in the ● Providing technical training
Nestlé purchased agriculture topics supply chain. and assistance to farmers;
750 000 tonnes of green coffee discussed as part of a “AA” has always stood for ● Investing in wider
week-long exchange
in 2006, about 13% of it directly of ideas and learning the highest-quality coffee, community projects.
from farmers, making us the under the Nespresso but in 2003, Nespresso In 2007, 35% of the total
world’s largest direct purchaser. AAA Sustainable incorporated an additional “A” green coffee beans Nespresso
Quality Programme
Nestlé also offers coffees for sustainability. The resulting purchased came from farms
which are Fairtrade certified (or Nespresso AAA Sustainable in the AAA Sustainable Quality
other certified coffees), where Quality Programme draws on Programme. This is an increase
consumer or retail customer our relationships with suppliers from 25% in 2006, and we have
demand is sufficient. Nescafé and partners to ensure our committed to increase this to
Partners’ Blend is one example. coffee is produced to the 50% by 2010.
highest quality standards but
also considers the social
and economic value for
farming communities and its
environmental sustainability.

The AAA Sustainable Quality
Programme has been rolled out
in Mexico, Guatemala, Costa
Rica, Colombia and Brazil.
( See www.nespresso.com
At this Nestlé-
for further information) sponsored farmers’
In November 2007, the field school in
second AAA Sustainable Quality Nobertkro, South-West
Côte d’Ivoire, topics
Coffee Forum took place in include responsible
Costa Rica. ( Read more at labour practices,
www.nestle.com/csv/AAAforum) the importance of
schooling for children
In 2006, Nespresso and and sustainable
TechnoServe initiated a three- farming methods.
year sustainable development Cocoa from farms
like this will be used
project in Caldas, Colombia, in leading Nestlé
to help coffee farmers chocolate brands
improve the quality of their manufactured at York
in the UK
coffee and their yields, and
achieve higher prices as
a consequence. The total
investment of CHF 847 000
– including CHF 472 000 from
Nespresso and TechnoServe –
is being used to improve
farm productivity, establish a
pricing system and help build
new laboratories. By 2011, Cocoa ● Working closely with West
the investment is expected to Although Nestlé does not African governments, labour
have generated an additional own any cocoa farms or experts and other industry
CHF 3.5 million GDP in the plantations, we are committed partners to implement a
Caldas region – around 20% to contributing to more system of certification for
(CHF 880) extra per farmer – sustainable cocoa growing cocoa-growing regions, which
and enabled Nespresso to buy through programmes run with will help to improve the lives
25 000 bags (1500 tonnes) of other members of industry, of children and families on
AAA green coffee. governments in the producer cocoa farms by identifying
countries of West Africa, and non-compliance with ILO
other partner organisations. convention 182 regarding child
Nestlé is: labour and taking corrective
● A founding participant in the action where problems are
International Cocoa Initiative identified;
(ICI), a joint industry – labour ● A member of the World
union and civil society initiative Cocoa Foundation, which
which works to eliminate child supports cocoa farmers and
trafficking and abusive labour their families worldwide.
practices; Nestlé is also funding
a three-year sustainable
cocoa project with three
co-operatives of about
3000 farmers in Côte d’Ivoire.

This scheme, in conjunction Children in Kaleke, Key challenge
India, at a well built in
with the International Cocoa
their school as part of
Organization (ICCO), the a Nestlé partnership Water management
ICI, cocoa exporter ECOM to bring clean water in agriculture
to villages in the milk
Agroindustrial and local non- Agriculture uses nearly
collection district
governmental organisation around its Moga factory three-quarters of the world’s
FEMAD (Women, Action and available fresh water, so
Development) aims to improve good water management
cocoa farmers’ incomes, is fundamental to the
protect the environment, livelihoods of farmers and
combat child labour, improve their communities. Many
school attendance and increase programmes around the
HIV awareness. Further projects world help to train agricultural
in West Africa are under workers to address issues
development. such as irrigation, water
scarcity and sanitation.
Initiatives and partnerships These include the UN Global ● Teaching Vietnamese coffee
Nestlé actively participates Compact CEO Water Mandate, farmers efficient irrigation
in a number of international a public-private initiative techniques expected to reduce
initiatives and cross-sector between the United Nations water use by 60%;
partnerships that promote Global Compact and a group ● Supporting a local
sustainable agricultural of committed companies and government programme
practices. Of particular organisations launched in to help farmers in the
significance are: July 2007. Shuangcheng milk district,
China, to store farm
Common Code for the Our response effluent correctly to avoid
Coffee Community (4C) As a founding signatory of contaminating groundwater.
See page 34 for more details. the Mandate, Nestlé is a vocal In 2000, the Sustainable
public advocate for access to Agriculture Initiative Nestlé
Sustainable Agriculture clean drinking water, and has (SAIN) was launched
Initiative (SAI) made considerable efforts to to promote sustainable
The Sustainable Agriculture share knowledge and best agriculture and improve
Initiative of the Food Industry practice on agricultural water efficiency and risk
(SAI-Platform), co-founded in use and protection. These management. To provide a
2002 by Nestlé, Danone and include: systematic framework for
Unilever, now involves 22 major ● Providing 85 water wells in Nestlé’s many water-related
food trading and producing schools in villages within the projects, the Company has
companies. Its main objectives Moga milk collection district in made water a key SAIN activity.
are to address: India;
● Quality and safety in the food ● Working with milk
supply chain; producers in South Africa
● The growing global demand to use more efficient tillage
for food; practices, night-time irrigation
● The possible adverse effects and computerised irrigation
of agriculture on natural systems;
resources and the environment.

Common Code for the Coffee Community (4C)
The Common Code for the

Coffee Community (4C) builds
on a voluntary code of
conduct adopted by the coffee
producers, traders, civil
society and other stakeholder
organisations that form the
not-for-profit 4C Association,
who are committed to good
farming and management
methods to improve efficiency, roasters and manufacturers, Top left: Mrs Vo Thi Above left and right:
Thinh, a coffee farmer Auditors visit a farm to
profitability, transparency and are now represented among
in Vietnam, delivers verify that its farming
sustainability in the production, the 72 members of the 4C her first lot of coffee and management
processing and trading Association. Nestlé will receive verified under the principles adhere to
Common Code for the the 4C Code, and
of coffee. 4C coffee in 6 of our coffee
Coffee Community check coffee quality.
By December 2007, factories by the end of the first (4C) scheme, having Top right: Coffee-
approximately 6 million 60 kg quarter of 2008. taken part in 4C drying on a
training and produced Vietnamese farm
bags (360 000 tonnes) of Read more online at
her coffee in line with
coffee, 6% of the world’s www.nestle.com/csv/stories the Code
supply, was 4C-verified, and and www.sustainable-coffee.net
more than half of the global
coffee producers, as well as
the largest trading houses,

6%
Proportion of world coffee supply currently 4C-verified
Within the SAI framework, Furthermore, we make clear
Nestlé has worked with farmers our expectations with regard
to develop best practices in to the social conditions of the
milk production, and coffee, farmers we buy from, with child
cereal, fruit and vegetable labour and employee health and
growing. It also plans to expand safety all high priorities.
these activities to all main raw Detailed policies and
materials and to issues such guidelines concerning our
as use of water in agriculture position on these and other
and biofuels. Through its issues can be found at www.
coffee working group, Nestlé nestle.com/csv/downloads
is involved in three sustainable All measures taken to support
coffee production pilot environmentally sound
projects, each undertaken in business practices and improve
collaboration with a major environmental performance
trade partner: are set out in Nestlé’s Policy on
● ECOM in Nicaragua; replicate best practice across As part of the Nestlé the Environment.
Sustainable Agriculture
● Volcafé in Guatemala; all key sourcing areas, continue
Initiative, this project
● NKG Partnerships in building partnerships and in Vietnam is passing Direct Purchasing guidelines
Vietnam. deliver measurable results. on expertise in Nestlé is aware of the strain
sustainable farming
Find out more at Nestlé is also a member of agricultural processes can put
practices to coffee
www.saiplatform.org AIM-PROGRESS Task Force. growers on environmental resources
This is an initiative comprised of and ecological habitats.
Managing supplier leading Fast-Moving Consumer In order to maximize the
relationships Goods (FMCG) companies performance of our agricultural
In 2007, Nestlé conducted that supports the use of inputs and minimize potential
3400 audits of suppliers’ common evaluation methods negative impacts, Nestlé has
facilities to help ensure that to determine CSR supplier issued purchasing guidelines
they comply with Nestlé food performance and help promote recommending, wherever
safety standards. ( See www. responsible sourcing practices possible, sustainable farming
nestle.com/csv/downloads) within the supply chain. practices in the case of direct
Our objective is a global, Nestlé insists on honesty, procurement from farmers.
supply-chain-wide system integrity and fairness in all
of quality, social and business relationships, and
environmental audits, which when instances of non-
will not only reduce the total compliance are discovered,
burden and any duplication corrective measures are
of work, but also help us to needed for the supplier to be
retained. It is Nestlé’s policy to
apply sanctions in the event of
misconduct or abuse of ethical
standards and guidelines.

Watch videos on
4C-certified coffee and the
International Cocoa Initiative
at www.nestle.com/csv/stories

Products and consumers
Opposite: Liz Ellis,

former Australian
national netball
Nestlé’s core business strategy is
team captain, fronts
a major television Nutrition, Health and Wellness –
advertising campaign
for a range of
Nestlé products,
offering products of superior value
emphasising how
all of them combine
taste and enjoyment
to those of our competitors, which
while fitting into a
healthy lifestyle improves both consumer wellbeing
and Nestlé sales results.

Shared Value By responding to consumers’ changing Increasing numbers of consumers get
needs, integrating further into society and access to safe, high-quality, nutritious
communicating clearly, our brands and food products. They also gain a greater
customer loyalty are strengthened, bringing knowledge of health issues, as well as a
long-term enhanced growth, market share better understanding of how they and their
and profitability. families can use Nestlé products for a safe,
healthy and enjoyable diet.

Nutrition, Health
and Wellness
As an increasing number of
societies begin to move out
Nutrition, Health and
Wellness profile
of poverty, it’s quite likely
From the very origin of our that over a period of years,
Company, our strategy has been the disease profile changes
based on nutritious products from infectious diseases as
that contribute to the health the main cause of death,
and wellbeing of consumers. especially among children,
In recent years, Nestlé has to an emphasis on chronic,
reinforced this strategy, mostly non-infectious,
becoming the world’s leading diseases, which primarily
Nutrition, Health and Wellness affect adults and the elderly.
company, with total Group sales
Safe, nutritious food,
of CHF 107.6 billion. Wellness Unit, the programme
especially if it is fortified
Nestlé invests in continuous gets its name from its dual aim:
development and renovation gaining the approval of at least
with key micronutrients
of its products to enhance their 60% of consumers in a taste that are present in the
quality and nutritional value. It test while bringing a nutritional average diet in insufficient
also continually adapts them “plus”. The process helps to amounts, can have a
to meet consumers’ changing continually improve the taste significant impact on
preferences, as they evolve and nutritional value of our chronic diseases, precisely
beyond taste, enjoyment and products, contributing to market because there is a huge
convenience towards the share gains and improved incentive for enlightened
added benefits of nutrition and profitability. 60/40+ product testing
is implemented manufacturers to
personal health. To have the most impact, the worldwide, resulting in contribute to public health
programme focuses on our best- products with added
nutritional value,
at the same time as they
Making nutrition the sellers. Products with a sales
produced to suit local are growing their
preferred choice: 60/40+ value of CHF 14.6 billion were tastes. Maggi Dal Atta
Nestlé’s strategy is based on tested in 2007, making 60/40+ Noodles, for example,
penetration. From my
offering products that have the largest nutrition-focused are formulated to meet experience in Mexico, I
the specific needs believe that Nestlé has truly
proven superiority in consumer programme in the Food and and preferences of
preference and nutritional value Beverages industry. consumers in India understood this dynamic
over the competition. This is Exemplifying the 60/40+ and is delivering genuine
based on a proprietary product programme, Nestlé India shared value through its
testing process called 60/40+. launched Maggi Dal Atta Noodles. products in that society
Championed across all Nestlé This is not only one of the
businesses by the Corporate country’s most popular snacks,
but offers protein and dietary
fibre in the form of atta (a whole
wheat flour) and vegetables,
with reduced salt content.
Julio Frenk, former

Secretary of Health of Mexico

CHF 11 billion
Approximate value of annualised sales of Nestlé Nutrition
Nestlé Nutrition
Nestlé Nutrition is a global,
standalone business that
focuses on delivering science-
based nutrition products and
services designed to address
specific health and wellness
needs. With a presence in more
than 100 countries and with
more than 20 000 employees,
it operates in four key business
areas:
● Infant Nutrition (infant
formula, toddler and baby
food): Helping infants and
young children to grow and
develop into healthy adults;
● HealthCare Nutrition:
Products for the elderly, and
for people recovering from,
or managing, certain medical
conditions; Nestlé Nutrition, 2007 This acquisition comes in the
● Performance Nutrition: Business area Position wake of two others – Novartis
Promoting peak mental and Infant Nutrition* 1st Medical Nutrition and Jenny
physical performance for HealthCare Nutrition 2nd Craig – transforming Nestlé
athletes and highly active Performance Nutrition 1st** Nutrition into a business with
people; Weight Management 1st*** annualised sales of about
● Weight Management: * Baby food and infant formula
** Position of performance bars in North America
CHF 11 billion.
Offering personalised weight *** Position of personalised weight management
in North America
See www.nestlenutrition.
management programmes that Source: Nestlé com for more information.
help consumers to lose weight. Gerber products
being put through
With the acquisition of the
their paces at a
tasting session. Gerber Baby Food Company in
Gerber has developed September 2007, infant feeding
“Start Healthy, Stay
solutions and baby food make
Healthy”, an initiative
using the latest up more than 70% of Nestlé
nutrition research to Nutrition’s business (Baby Food
help parents establish
44%, Infant Formula 29%). This
healthy eating habits
for their children now gives us the number one
position in the largest single
baby food market worldwide,
the United States, and clearly
establishes Nestlé Nutrition as
the global leader in the sector.

CHF 1.88 billion
Value of Nestlé R&D expenses in 2007
Nutrition research largest private facility for
underway at the Nestlé
nutrition-related research,
Research Center, part
of the world’s largest with a permanent staff of 700,
private nutrition including over 300 scientists,
research network
representing 48 nationalities.
The NRC ( www.research.
nestle.com) is the hub of
Nestlé’s worldwide R&D
community, combining global
scale with local relevance. It
engages in more than 200
external scientific partnerships
and university collaborations
each year, continuously building
a knowledge base to meet
changing consumer needs.
Research & Development expenses, 1998-2007*
2.0 Nestlé International
1.88
Nutrition Symposium
1.73
At the NRC’s annual
1.5 International Nutrition
1.50
1.43 Symposium, leading experts
1.21 1.21 debate current issues in human
1.0 1.16
1.04 health and physiology, identify
0.90
0.81 future research directions
0.5 and publish their conclusions
in scientific literature. In
October 2007, the fourth
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Symposium on Nutrition and
*CHF billion
Cancer explored the role of diet
Source: Nestlé
as a risk factor in the origins of
cancer, as well as explaining
Research and development investment and collaboration how nutrition can provide
with our suppliers. For example, preventative solutions.
Nestlé’s R&D network in February 2007 we formed Read more at www.nestle.
Nestlé continues to be a an agreement with INMEGEN, com/csv/symposium
global leader in R&D, with Mexico’s National Institute of NRC research concepts
approximately 5000 people Genomic Medicine, through are transformed into product
actively involved. In 2007, Nestlé which we fund a chair and two innovations and processes
spent CHF 1.88 billion on R&D, fellowships. And in November through an international
this figure having more than 2006 we formed a partnership network comprising:
doubled in the past eight years. with EPFL (Ecole Polytechnique ● Product Technology Centres
Nestlé is committed to open Fédérale de Lausanne) to (PTCs), each aligned with
innovation, through which we co-operate on scientific particular Nestlé businesses to
multiply our opportunities and research into the role of provide expertise for specific
leverage research into products nutrition in brain development. product categories, and
and services. This includes The Nestlé Research Center together forming a hub for
partnerships with universities (NRC), based in Lausanne, global product and process
and start-ups, venture capital Switzerland, is the world’s development;

6445
Number of products renovated for nutrition or health considerations in 2007
● Research and Development Key challenge
Centres (R&D Centres), working
in close collaboration with the Tackling obesity
PTCs to meet regional R&D Obesity occurs when energy
requirements. consumption exceeds energy
For a full list of our 23 PTCs expenditure over time, and
and R&D Centres, please the excess is stored as body
see www.nestle.com/csv/ fat. One of the main causes
researchcentres is excessive consumption of
Nestlé is further supported energy, e.g. from fatty snacks
by the Nestlé Nutrition Council, and sugary drinks.
established 30 years ago and
composed of internationally Our response
renowned nutrition scientists. Nestlé’s strategic response is
The Council aims to review characterised by the following
current and developing nutrition approach:
issues, and advise senior ● Recipe innovation and
management on their impact renovation, seeking to
upon Nestlé’s policies and optimize nutrition, for example
strategy. Over the last decade, by removing trans fatty acids,
it has examined issues such as or reducing fat, sugar or salt;
diabetes and childhood obesity, ● The PowerBar sports ● The 60/40+ programme,
and reviewed Nestlé policies on nutrition bar includes a delivering taste and nutritional
supplement proven to provide
the reduction of trans fatty acids, superiority over competing
salt and sugar levels in food, as endurance athletes with long- products;
well as iron and other nutrient lasting mental alertness; ● Branded Active Benefits,
fortification. ● A reduced fat cappuccino Staff at the Nestlé providing additional nutritional
technology produces the Product Technology benefits;
Centre, Beauvais,
Applying science and creamy head for Nescafé France (left to right): ● The Nestlé Nutritional
technology Cappucino, while reducing the Juliette Théry, Sigrid Compass, providing
We apply science and technology fat content. Lemonnier and comprehensive nutritional
Anthony Pizzagali.
to formulate products that Nestlé R&D staff worked Nestlé’s patented information to allow
address health issues including for over a decade to perfect Low Temperature consumers to make informed
intestinal health, healthy ageing Low Temperature Freezing Freezing technology choices;
retains the taste
and sports performance: (LTF) technology, a process and texture of ● Helplines, providing one-
● We were among the first designed to destabilise the fat conventional ice- to-one advice on subjects
to use probiotics – beneficial droplets in ice-cream so that cream, but with only including nutrition;
half the fat and a
bacteria that strengthen the it retains the taste and texture third fewer calories. ● Development of nutrition-
immune system – in the of conventional ice-cream, but Originally developed oriented brands and
early 1990s; with only half the fat and a third in the USA, LTF technologies such as Lean
has been rolled out
● We have developed fewer calories. LTF technology to popular French Cuisine, Jenny Craig and
technologies to replace partially is used in Nestlé brands such brand La Laitière Slow Churned ice-cream.
hydrogenated fats with natural as Dreyer’s Slow Churned, La
vegetable oils in Maggi bouillon Laitière, La Lechera, Häagen-
cubes and seasonings, and Dazs and Mövenpick.
fortify them with iodised salt to
help prevent thyroid problems
and impaired development of
children;

CHF 4.4 billion
Sales of products containing Branded Active Benefits
Optimizing the nutritional value Even in developed countries,

of Nestlé products malnutrition affects up to
Enhancing: 50% of residents in nursing
● Whole grains: 1.6 billion additional homes and up to 70% of
servings in Europe (2004–2007);
● Health benefits: Branded Active elderly patients in hospital,
Benefits (see below); leading to increased illness
● Micronutrients: vitamins, minerals and mortality. In response,
and trace elements.
Nestlé has developed fortified
Reducing*:
● Trans fatty acids: 34 200 tonnes
drinks, soups and prepared
removed (Dec 2003 – Feb 2007); meals designed to suit the
● Sugar: 204 000 tonnes removed changing nutrition needs, and
(Jan 2003 – Dec 2006);
taste and texture preferences,
● Salt: 5000 tonnes removed
(Apr 2005 – Dec 2006). of senior citizens. For example,
* CPW not included in these figures Nestlé’s Nutren Optimum
Source: Nestlé
range, available in Latin
America, is enriched with
Product development calcium, phosphorus, Omega 3
We continually review the and 6, and prebiotics, while
nutritional content of our the products from Davigel,
products, reducing public- a branch of Nestlé France
health-sensitive components Professional, include Les
Cereal Partners Worldwide such as salt, sugar and trans Essentiels, frozen vegetable
(CPW), a 50/50 joint venture fatty acids, and increasing or fruit purées enriched with
with General Mills Inc., is others considered to be positive protein, calcium and fibre for
improving its breakfast cereals for health, such as calcium, use in desserts and soups, and
with whole grains, which iron, whole grains and fibre. pre-cooked Savoureux meals,
studies have shown to rich in protein and calcium, with
contribute to better heart Branded Active Benefits the right texture for patients
health, blood sugar regulation In addition to the general with swallowing problems.
and weight management. CPW nutritional benefits of our
has, since the start of 2004, Product testing of products, we offer consumers
Shredded Wheat at
added an extra 1.6 billion Cereal Partners UK. a variety of products with
servings of whole grain to Nestlé breakfast Branded Active Benefits (BABs).
its European product range. cereals contain whole This is a range of specific
grains
Alongside this, CPW has also ingredients and formulas that
removed 3500 tonnes of sugar provide additional, proven
and 530 tonnes of salt. health benefits to our main
food and beverages categories.
In 2007, products with BABs
achieved sales of CHF 4.4 billion,
an increase of more than
16%. These include products
containing Actifibras to aid
digestion, BL for improved
immunity and protection, and
ActiCol to help lower blood
cholesterol.

Compounded annual growth rate, Serving local tastes and
2004-2007* demands
Occasional Food & Beverages
Everyday Food & Beverages To ensure our products meet
Nutritionally enhanced Food & Beverages
Branded Active Benefits
the local needs and preferences
of consumers, many of them
30
are produced with subtle
variations. For example, we
20 23.7
launched local variations of
traditional products in Brazil
10 two years ago, starting in the
7.8 North-East. These include Ideal
5.6 6.2
0
powdered milk, a variation of
% Ninho/Nido with a different
* Figures exclude non-food products combination of vitamins and
Source: Nestlé
ingredients.
Nutrition for family pets Left: Branded Purina Pro Plan is addressing
Active Benefits are
Pets are an important source the changing nutrition and
ingredients and
of companionship and formulas that provide physiological needs of ageing
psychological wellbeing to additional, proven cats with new dry cat food
health benefits to
many people around the formulas specifically for two
our main food and
world. Concern over obesity beverages categories. different senior life stages:
and health is not restricted In 2007 sales of mature (7–11) and senior
products with BABs
to humans, and much of our (11 and over).
increased by more
human nutrition knowledge can than 16%. For further information,
be adapted for cats and dogs. Above: Nestlé makes please visit www.nestle.com/
nutritious foods to
For example, intestinal bacteria csv/catfood
suit local tastes and
in pets show many similarities pockets
to those in humans, so Nestlé
scientists have formulated a
range of balanced pet foods
that promote a long and healthy
life. This includes extending
the use of prebiotics – non-
digestible carbohydrates that
selectively stimulate the growth
of good bacteria to aid intestinal
function – to pet food.
Nestlé is now an industry
leader in the sector, starting
with the purchase of Carnation
in 1985, followed by the
acquisition of Spillers and
then Ralston-Purina to Look closer @ nestle.com
create Nestlé Purina PetCare. Watch videos and slide
( www.purina.com) shows on Gerber and Low
Temperature Freezing
technology at www.nestle.
com/csv/stories

Popularly Positioned Products: improved nutrition at the base of the pyramid
Left and right above:

The Feira de Santana
factory in Brazil
opened in 2007
with an investment
of CHF 60 million,
bringing 125 direct jobs
and five times as many
indirect employment
opportunities to
an economically
challenged, rural region.
Right below: Brazilian
dairy farmers benefit
from free technical
advice in Nestlé
milk districts which
supply milk to the
Araçatuba factory. The
factory manufactures
affordable Ideal
powdered milk, which
is enriched with iron,
calcium and vitamins
A, C and D Value for Nestlé: Low-cost
business model; committed
workforce providing profitable
access to a large consumer
market
Value for society: Employment
opportunities; local economic
development
Local sourcing
Brazilian dairy farmers
benefit from free technical
advice in Nestlé milk districts
Nestlé has a responsibility Local job opportunities which supply milk to the
to provide consumers with In February 2007, Nestlé Araçatuba factory. The factory
nutritious products regardless opened a factory in Feira de manufactures affordable
of where we sell them and Santana, Brazil, for the Ideal powdered milk, which is
the price point at which we packing of coffee and infant enriched with iron, calcium and
sell them. To help to provide cereals, and the production of vitamins A, C and D.
the 2.8 billion people around instant noodles. Backed by a
the world who earn less than CHF 60 million investment, the Value for Nestlé: Secure source
USD 10 (CHF 11) per day with new site created 125 direct jobs of high quality raw materials
affordable food products, we and five times as many indirect Value for society: Reliable
have renewed our Popularly employment opportunities for market and regular income for
Positioned Products (PPPs) local distributors, brokers and suppliers
initiative. Our Ideal powdered suppliers, as well as reaching
milk, a PPP sold in Brazil, 50 million consumers in an
is just one example of how economically deprived region.
value is shared by both Nestlé
and society.

Nutritional value
Some PPPs are fortified to
ensure consumers get added
nutritional benefits. In Latin
America, for instance, Ideal
powdered milk is enriched
with iron, calcium and
vitamins A, C and D, and
Our Direct Store Maggi Sopa Crecimiento in
Delivery initiative
has increased market Central America, a chicken
penetration and and noodle soup with a
product availability milk base, contains protein,
in countries
with widespread vitamins and minerals needed
populations. In for child development.
Brazil, this has Enriched products are
provided 4000 “Até
Você” door-to-door successful in Africa too; Maggi
distributors with bouillon, made with iodised
income generation salt (which helps prevent
opportunities
thyroid disease) is the fastest
growing Nestlé product in
Guinea, Cameroon and Côte
d’Ivoire.
Value for Nestlé: Access/

growth in new markets;
greater product appeal and
wider brand recognition;
appropriate financial returns
Value for society: Access to
affordable nutrition products
Affordability and availability Similar schemes for ice-

● Affordability: PPPs often cream distribution have been
come in smaller, more established in South Africa
affordable pack sizes so that and Thailand, as well as more
lower-income consumers can than 3000 “coffee carts” across
buy them regularly; West Africa.
● Availability: Our Direct
Store Delivery initiative has Value for Nestlé: New business
increased market penetration opportunities; profitable brand-
and product availability in building; closer community
countries with widespread relationships
populations. In Brazil, there are Value for society: Income
4000 door-to-door distributors creation; skills transfer;
who supplement access to microfinance; social inclusion Look closer @ nestle.com
traditional trade outlets. Watch a video about
Popularly Positioned Products
in Brazil at
www.nestle.com/csv/stories

95%
Proportion of products sold carrying the Nestlé Nutritional Compass on pack
Marketing and Responsible food labelling

While discussions continue
communication about the best approach
to food labelling, Nestlé
Our communication has already introduced the
commitments Nestlé Nutritional Compass
We are very conscious of our (launched in 2005). This is an
role in communicating on-pack information panel
responsibly to consumers, and that provides consumers with
particularly to children, which relevant, easy-to-understand
is why all Nestlé companies are nutrition information. It is a
required to abide by the Nestlé global labelling scheme that
Consumer Communication translates into billions of clearer
Principles. nutrition labels in the hands of
As part of our overall consumers. The Compass
responsibilities to consumers, already appears on products
we are committed to: amounting to 95% of total
● Clear, user-friendly labelling sales globally, and continues
and supporting materials to to be rolled out across our
help consumers make well- product range.
informed food choices; Built around a nutrient
● Responsible communication content table, the Compass
about all products, especially comprises:
those consumed by children, ● Good to know: Key nutrition
(see section on Advertising information relating to
to children, page 49) in line ingredients or issues of public
with applicable laws and our concern (for example, fat, sugar The Nestlé Nutritional The on-pack contact details
Compass system
Corporate Business Principles; or salt content but also iron or provide access to 96 Consumer
gives clear and
● Participation in and support fibre); comprehensive Services teams around the
for public nutrition education ● Good to remember: Tips nutrition information world. Nearly three-quarters
on-pack. The
programmes; for healthy enjoyment of the (73%) of the 10 million
Compass is shown
● Collaboration with public product; above as it appears calls they receive each year
health bodies to work towards ● Good to talk: Contact details on the Milo brand as are requests for product
sold in Malaysia. Milo
healthier diets and lifestyles. and links to further information information, nutritional advice
is popular in Malaysia
The full Principles are online. and many other or recipes, and worldwide, over
available at www.nestle.com/ Please visit www.nestle. countries around the 40 million consumers choose to
world
csv/downloads com/csv/compass for more receive information and advice
information about the Compass. from Nestlé through e-mail or
direct mail.
Nestlé nutritionists work with
various stakeholders to develop
the Compass and ensure
its continued relevance. In
Europe, for example, it is being
adapted to feature a complete
Guideline Daily Amount (GDA)
table for the “big 8” (energy,
carbohydrates, proteins, fats,
sugars, saturated fats, sodium

Over 10 million
Total number of people reached by Nestlé education programmes and initiatives
and fibres). This is Nestlé policy ● Switzerland and Hungary:
and essential if a health or The Nutrikid programme is
nutrition claim is made; only a joint venture between the
where there is a lack of space Swiss Society of Nutrition,
and no such claim is made Nestlé Alimentarium (food
can just the “big 4” (energy, museum) and Nestlé
carbohydrates, proteins and Switzerland and Hungary,
fats) be listed. reaching 170 000 students
The GDA table will be with classroom kits offering
complemented by at-a-glance nutrition education in the
information, on the front of form of videos, game cards
packs, about energy content and books;
per serving and its contribution ● Brazil: 800 000 children aged
to recommended daily calorie 5–14 have benefited from our
consumption. An arrow will Nutrir programme, which trains
direct the consumer to the Nestlé volunteers to promote
Compass for further information. Education and engagement Nestlé sponsors the nutrition, hygiene and health
Healthy Thai Kids
The GDA nutrition labelling Nestlé has developed or through games and play;
programme, reaching
scheme is on 45% of our sponsored many community 5000 primary schools ● Thailand: 5000 primary
products in Europe (as of education programmes with nutrition schools have been reached
education. Here,
end 2007). around the world to improve through the Healthy Thai Kids
children discover in a
understanding of the fun way all about how wellness in school campaign.
importance of nutrition and food is digested See www.nestle.com/csv/
physical activity to health. Good education for more details of
eating habits start at an early these and other programmes.
age, so much of our focus is on Underscoring our belief of
schools. the importance of nutrition,
● France and EU: The Nestlé- we also empower our own
sponsored programme colleagues with a global
“Together Let’s Prevent nutrition training programme
Childhood Obesity” started called Nutrition Quotient
as a pilot project in 1992 (NQ). Using different modules
in northern France. It has suitable for all employees,
now been adopted by 10 other from the Executive Board
French cities and several to plant level, NQ leverages
other European countries, and the nutrition expertise of
has created the EU-funded our Nestlé Research Center
Prevent Childhood Obesity (NRC) scientists.
Network of which Nestlé is a Read more at www.nestle.
founding sponsor; com/csv/NQ

Watch an animated example
of the Nutritional Compass at
www.nestle.com/csv/compass

Left: The Nestlé
Nutrition Duchess
Club is an informal
association of women
of all ages and from
diverse backgrounds
in Nigeria and Ghana.
The club promotes
healthy eating habits,
good nutrition,
home management,
entrepreneurship
and leadership, and
has also embarked
on community-based
health initiatives, The Nestlé Nutrition Duchess
including food Club is an informal, all-female
hygiene education for
association in Nigeria with the
market traders and
schoolchildren. aim of empowering women
Right: Members of through knowledge and skills in
the Nestlé Nutrition
nutrition, home management,
Duchess Club passing
on practical food and entrepreneurship and
hygiene knowledge in leadership. The Duchess Club
an open air market
provides nutrition education
workshops focusing on healthier
eating habits, food safety
and food management for
mothers and homemakers. The
Nestlé’s NIDO Nutrition promotion concentrated on the Duchess Club has 530 members
System, which has achieved “10 signs of good nutrition” who have reached over half a
sales of CHF 1.2 billion in just for children, such as clear skin, million women.
five years, lays the foundation good muscle development,
for healthy development in early sleeping well and being alert
childhood. It now incorporates and cheerful, developed by
Lactobacillus PROTECTUS to the Nutritionist-Dietitians’
strengthen the immune system Association of the Philippines
against germs, as well as Prebio Foundation. On-pack
in pre-school milks for children information was supported
under 5 years old, and Calci-N by a wide range of celebrity-
for continued healthy bone endorsed communications,
growth in children. such as point-of-sale materials,
The NIDO Nutrition System print, radio and television
was launched in the Philippines advertising, and feature articles
in 2000 repositioning NIDO in magazines. In addition to
fortified milk with added increased consumer awareness
vitamins A and D. The of the benefits of good
nutrition, the campaign resulted
in 8% sales growth of the
more nutritious product in the
Philippines in 2006, and its roll
out as a global campaign was
started in 2007.

Marketing and advertising Joint industry initiatives on Key challenge
practices advertising to children
In December 2007, Nestlé Advertising to children
Advertising joined voluntary responsible Our Consumer
Nestlé Principles concerning advertising initiatives by the Communication Principles
appropriate communication Food and Beverages industry in ( please see www.nestle.
with consumers have been a Europe and Canada to children com/csv/downloads)
part of the Nestlé Corporate below 12 years of age. The include specific criteria
Business Principles since they aim is to support and promote for communication with
were first published in 1999. good nutrition and a healthy children. They are aimed at
These undergo periodic review, lifestyle. The industry pledge, encouraging moderation,
and a more complete and to be fully implemented by the healthy dietary habits and
detailed set of Principles was end of 2008, will be subject physical activity without
released in 2002. They were to independent compliance undermining the authority of
further strengthened in regard monitoring. parents or creating unrealistic
to children in 2004 and 2007 For further information on expectations of popularity or
(see opposite). our Consumer Communication success. They also ensure that
The Principles ( available Principles, our Policy on we do not create difficulty in
at www.nestle.com/csv/ Marketing Communication to distinguishing real from
downloads) are required Children and other pledges and imaginary or create a sense
reference points for all initiatives we support, please of urgency.
marketing staff and advertising see www.nestle.com/csv In light of rising concerns
agencies globally, and must about child obesity, Nestlé
be used when developing our Communicating with health strengthened its Principles in
consumer communication. professionals 2007 by adding two important
All marketing campaigns are For more than 60 years, provisions:
reviewed and we have put an Nestlé has contributed to the ● No advertising or marketing
internal monitoring process in continuing nutrition education activity is to be directed at
place in our markets to ensure of health professionals children under 6 years;
compliance with the Principles. through scientific publications, ● Advertising for children
Additionally, Nestlé participates workshops and scholarships. from 6 to 12 years must be
in industry initiatives aimed In 2007, the NRC published restricted to products with a
at furthering responsible 200 peer-reviewed research nutritional profile that helps
advertising. This includes a publications, and some children achieve a healthy
Europe-wide initiative, started 4000 medical delegates balanced diet, including clear
in 2005, which assesses communicate with healthcare limits for such ingredients as
companies’ compliance with professionals on a daily basis sugar, salt and fat.
industry-wide Codes of Conduct over the course of the year. These will be fully
for Food and Beverages implemented in all countries
Marketing Communications. by the end of 2008 and
This has provided a useful tool subject to monitoring.
for Nestlé to receive feedback
on its advertising and maintain
high standards of compliance.

The Nestlé Nutrition In addition, Nestlé is the only
Institute (NNI) is an educational major company that markets
organisation providing a complementary foods only after
forum for health professionals six months of age in developing
to share information about countries.
the latest developments
in paediatric, clinical and Breast milk and breast milk
performance nutrition. The NNI substitutes
has held more than 70 global Nestlé began to meet the
Nestlé Nutrition Workshops need for a nutritionally safe
and granted more than alternative to breast milk with
500 postgraduate scholarships the development of Henri
to young paediatricians, Nestlé’s original infant cereal.
paramedics and scientists from In 1869 he declared in his
developing regions. Memorial of the Nutrition of
Nestlé has also produced Infants that breastfeeding
more than 3000 publications, was best for babies and
including Annales Nestlé and that every mother able to
The Nest for paediatric health breastfeed should do so. This
professionals, and Clinical original principle still forms
Nutrition Highlights, a scientific the cornerstone of our Infant
journal for clinical nutritionists. Formula Marketing Policy.
A range of other material However, not all mothers
in print, audio-visual and breastfeed, and infant
electronic formats is available formula is the only product
in English, French and Spanish, recognised by the World
and the NNI website ( www. Health Organization (WHO) as
nestlenutrition-institute.org) an acceptable substitute for
provides access to an online breast milk. Infant formula,
medical and scientific library, with its specially adapted
educational tools, online nutrition, has ensured the
workshops (webinars) and The Nestlé Marketing of products for healthy development of many
Nutrition Institute
information on forthcoming infants children around the world and
communicates with
events to young paediatricians, health professionals replaces dangerous breast
health professionals and at congresses Nutrition during the first milk substitutes. We provide
worldwide
scientists. three years of life high-quality, safe and nutritious
Globally, malnutrition actually infant formula products and are
becomes most serious among committed to their responsible
infants after six months sale and marketing. On the
of age, when nutritional pack, we inform consumers
“complementary foods” (cereals, and health professionals of
milks, puréed vegetables and the benefits and superiority
meats) become critical to of breast milk; product labels
health and survival. Nestlé is and educational materials also
the world’s leader in producing carry preparation instructions
and promoting these foods, as well as warnings about
which typically replace foods inappropriate use.
like corn starch or rice – or even
soft drinks and French fries.

The WHO International Code Assurance WHO Code implementation
of Marketing of Breast-milk Nestlé has a three-part method and assurance
Substitutes to assure compliance with the Nestlé learned a great deal from
The aim of the WHO Code is “to WHO Code: its experience concerning infant
contribute to the provision of ● Nestlé has an extensive formula marketing in Africa,
safe and adequate nutrition for ISO-like internal monitoring recognising our responsibility
infants, by the protection and system, the WHO Code Quality to go beyond what were
promotion of breastfeeding, Assurance System, which is accepted marketing standards
and by ensuring the proper use now active in all developing at the time. We integrated
of breast milk substitutes, when countries; the WHO Code across our
these are necessary, on the ● Nestlé international auditors entire operations in developing
basis of adequate information conduct an extensive audit of countries in 1982, and continue
and through appropriate compliance with the WHO Code to monitor its application,
marketing and distribution”. in 9 –20 countries annually; refining our instructions with
The Code was adopted by ● Nestlé has a system of experience. We work with
the World Health Assembly ongoing, independent audits governments, others in industry
in 1981 as a recommendation by external social auditing and members of civil society to
to all its Member States, and companies. develop the Code in countries
Nestlé was the first company Results of the most where it is applied.
to announce (in 1982) that it recent of these external audits, The Infant Food Industry
would voluntarily implement carried out in Sri Lanka, can be and the WHO Code, published
the WHO Code in all developing accessed from www.babymilk. by analysts GES Investment
countries. As a result, Nestlé nestle.com Services, assessed infant food
accepts no advertising or In addition, there is a Nestlé companies’ implementation
marketing to the public of any internal ombudsman system of the Code and rated Nestlé
kind, and no contact between for any employee who wishes as the top company in Code
infant milk marketing staff and to confidentially report alleged application, stating: “Nestlé
the public in those countries. WHO Code violations. has the most elaborate policies
Nestlé has repeatedly taken In 2006, the Malaysian and mechanisms to address
action in countries to promote government imposed sanctions the Code, distinctly ahead of its
adoption of the WHO Code by on 8 out of the 12 infant food peers”.
governments, and government- companies operating in the The full wording of
sponsored monitoring of the country for violations of the our Infant Formula Policy
entire industry. Malaysian Health Ministry’s is available online at www.
Infant Formula Code of Ethics. babymilk.nestle.com, where
Nestlé was the only non-Asian we also answer the most
company not at fault. commonly asked questions
Read more at about infant feeding. We
www.nestle.com/csv/malaysia welcome feedback, and
we continue to monitor our
approach and communicate
openly with all stakeholders.

Support of UN
Global Compact
Principles and
Millennium
Development
Goals
Nestlé’s Corporate Business Principles In the table opposite are just a

( see www.nestle.com/csv/ few examples of our actions in 2007
downloads) guide our behaviour in that meet our commitments as a
relation to all relevant stakeholders. UNGC signatory.
They reflect the basic ideas of fairness, Nestlé supports the UN Millennium
honesty and respect for people and the Development Goals (MDGs), which we
environment in all our business actions. regard as highly important objectives
Their ongoing evolution has seen the that, through partnerships which
inclusion of the 10 UN Global Compact respond to local needs and harness
(UNGC) Principles on human rights, local knowledge and capabilities, can
labour, the environment and corruption result in positive, sustainable change.
in 2002. Examples that illustrate our Nestlé’s creation of shared value
compliance with, and support for, these for itself and society brings specific
Principles are contained in this report. contributions to the UN Millennium
Nestlé’s further support for the UNGC Development Goals. There are
was demonstrated in July 2007 through many examples in this report that
Above: Contributing d’Ivoire, a major its patron sponsorship of the UN Global demonstrate how our long-term growth
to UNGC Principles cocoa-producing
Compact Leaders’ Summit in Geneva. strategy helps alleviate extreme poverty
7-9 and MDG 7: country, Nestlé
Reducing packaging works with three and hunger (goal 1) through initiatives
weight at Nestlé farming co- like our PPP strategy (page 44); our
Waters. operatives to
capacity-building programmes in milk
257 000 tonnes promote good labour
of packaging for practices, including districts and through coffee initiatives
bottled water have those relating to like Nespresso AAA and 4C (pages 30,
been saved in the child labour. We also
31 and 34). Similarly, there are many
past 6 years. support programmes
Above right: with other partners examples of how we contribute to
Contributing to that encourage
UNGC Principles 1, sustainable methods
2, 4, 5 and MDGs 1 in cocoa farming
and 7: In Côte

The UN Global Some examples of Nestlé actions Described The UN Millennium Development Goals
Compact on pages
Principles 1. Eradicate extreme poverty and hunger
Human Rights Expansion of participation in International Cocoa Initiative and 32 2. Achieve universal primary education
Principles Nestlé-specific cocoa projects in West Africa
3. Promote gender equality
Labour Principles CARE independent audit programme covers areas of human 22 – 23 and empower women
resources, occupational health and safety, and environment
4. Reduce child mortality
Environment related Reduced water consumption and influencing supply chain to 10 –19 5. Improve maternal health
Principles adopt good water management practices; higher energy
efficiency and lower GHG emissions; optimized packaging 6. Combat HIV/AIDS, malaria
volumes and sustainable packaging; founding signatory, UNGC and other diseases
CEO Water Mandate 7. Ensure environmental sustainability
Corruption related Establishment of Nestlé Code of Business Conduct 8
8. Develop a global partnership
Principle
for development
environmental sustainability (goal 7), Beyond the impacts outlined above, Contributing to for proper storage
such as reducing water consumption we support more than 120 projects and UNGC principles of farm effluent
1, 7, 9 and MDGs (China); working
(page 16), packaging materials (page 18) initiatives around the world that relate 1, 4, 5, 7 and 8: in partnership on
or our carbon footprint (page 13), specifically to the eight Millennium Among the many clean drinking
while the environmental aspects of Development Goals. Nestlé water-related water projects
projects that are (Mozambique –
our agricultural engagements such as Please see the Nestlé, the still ongoing – see above – and
managing water in agriculture (page 33), Community and the UN Millennium providing access Rwanda)
4C coffee and Nespresso AAA also Development Goals report, available at to clean water by
constructing wells
contribute to this goal. www.nestle.com/csv/downloads, for (India); working
more information. with farmers on
water conservation
measures (Vietnam);
providing facilities

Engaging with Stakeholder convenings
For the first time we invited external
Expert participants*
Expert participants included:
our stakeholders stakeholders to convene during 2007

specifically to provide feedback on our
Conference of NGOs, Conservation
International, Human Rights
Creating Shared Value strategy, priority Commission of Malaysia, Institute
issues, communication and reporting, of Corporate Responsibility, Malaysia,
in order to inform future decisions by International Federation of the Red
Nestlé and to validate the findings of Cross and Red Crescent Societies,
earlier internal consultations to identify International Initiative against
key issues. Child Labour, International Labour
Three full-day sessions were held Organisation, Lutheran World
during 2007, in Geneva, Washington Federation, Malaysian Association
DC and Kuala Lumpur. We intend to for the Study of Obesity, Malaysian
follow up these sessions and examine Institute of Corporate Governance,
the potential to conduct further Max Havelaar Foundation, The
Nestlé commits to open dialogue with engagement and research in future Methodist Church, Rainforest Alliance,
all stakeholders, including consumers, years; to include Africa and Latin Sustain, Transparency International,
customers, employees, investors America. United Nations Development
and others. The stakeholder convenings were Programme, World Business Council
We communicate on an ongoing designed, organised and facilitated on Sustainable Development, World
basis using a wide variety of channels. by AccountAbility and were attended Cocoa Foundation, World Economic
For example, through our 60/40+ by a total of more than 50 external Forum, World Wildlife Fund.
product testing programme consumers participants, expert in a wide range
can influence our product development, of social and environmental impact * This list records independent organisations
while our Nutritional Compass labelling areas relevant to Nestlé’s business who attended stakeholder convenings
in 2007, and is not intended to imply that
gives access to 96 consumer service activities and operations (see list of
these organisations have commented on
teams around the world, and many of expert participants). The participants or verified the contents of our 2007 Creating
our brands have dedicated websites. were invited by Nestlé to share their Shared Value Report.
In addition, we are engaging more perspectives candidly.
widely to understand and respond to Sessions were also attended by Key issues identified by convenings
opinions on our strategy of Creating senior managers and decision-makers A number of key issues emerged during
Shared Value. The objectives are to: from Nestlé functional business areas the participants’ discussions, and the
● Provide a formal mechanism for an and public affairs. question of compliance and verification
exchange of views; emerged as a common theme in all
● Enable Nestlé to understand convenings. Other key issues identified
views from a wide variety of external included:
stakeholders, providing a broad societal ● Nutrition, Health and Wellness,
perspective; including promotion of healthy lifestyles
● Identify future trends, risks and and related information provision/
opportunities relevant to Nestlé and its communication;
stakeholders; ● Human rights and sustainable
● Challenge Nestlé’s internal production as part of the supply chain,
perspectives gained from consultations including water and packaging issues;
with senior managers through which ● Community support and Enterprise
key issues were identified during 2007. development.

Insights and learning for Nestlé
The sessions enabled an effective Future reporting Improving scope
of performance data
dialogue resulting in valuable For the first time in Nestlé’s reporting
perspectives. Nestlé is grateful to all history, this current report presents
those who took part. In particular, performance indicators in all critical
these external opinions provided Nestlé areas of Creating Shared Value. While
with a valuable cross-comparison to historical data is not available for some
issues already identified through the indicators, we are working towards
earlier internal consultation process greater coverage and depth by 2010.
(see page 6). They also gave Nestlé
further insight into relative priorities in Communicating with key audiences
the context of individual, organisational Our reporting strategy is designed to
and geographic perspectives of the ensure consistency, integration and
participating stakeholders. For example, topicality. This current print report,
Nestlé’s role in standards development/ published in 2008, summarises 2007
promotion – especially on Halal – was External reporting also has a role to play performance for our shareholders
discussed during the Kuala Lumpur in Creating Shared Value. We believe that and other global stakeholders, and is
convening. external reporting of initiatives and key published with our 2007 Management
Nestlé has committed to report performance indicators can help drive Report. In the 2008 report (published
back to the expert groups on progress improved performance internally, as has 2009), we aim to provide appropriately
made in relation to recommendations been demonstrated by our increased targeted information relevant to specific
by approximately May 2008. The financial disclosure and improved audience groups, including customers,
feedback and recommendations will financial performance. The key here is investors and regulators. Our 2009
be more fully considered for Nestlé’s to report on those areas that are report (to be published 2010), will be
next report on Creating Shared Value most material to the Group – where our next major publication on Creating
(to be published in 2010) while the an improved performance can have Shared Value. We will continually
website will make updates available the greatest possible impact. update the information available on
as we progress work with our Nestlé is committed to reporting our website.
stakeholders to improve and respond its performance openly. We aim to
to recommendations made. continuously develop our reporting,
to reflect issues of most relevance to
Nestlé and its stakeholders, to engage
all levels and areas of the business
in the processes of Creating Shared
Value, and to maintain progress
towards our sustainability goals. Focus
areas include:
Aligning reporting with external

guidelines
Some Global Reporting Initiative (GRI)
performance indicators are included
where indicated. We also summarise
performance in relation to Global
Compact requirements. Our objective
is to align with good practice external
reporting guidelines for our next global
print report, which we aim to publish
in 2010.

● Verification of performance data
Independent and factual information within
the Report;
Considerations and limitations
Excluded from the scope of our work
is information relating to:
Writing and editing
Nestlé S.A., Public Affairs,
with SustainAbility
assurance – ● Visits to 18 operational sites in

13 countries to evaluate the SHE
● Activities outside the defined
reporting period;
● Statements of commitment to, or
and Flag Communication
Concept and design

data management systems, and
Methodology data reliability and accuracy;
● Pilot evaluation against the
intention to, undertake action in the
future;
Nestec Ltd., SGDU,
Corporate Identity & Design,
with Esterson Associates
● Statements of opinion, belief and/
& preliminary main principles of the AA1000
framework, entailing review of
materiality analysis, stakeholder
or aspiration;
● Information hyperlinked from the
Photography
Nicole Bachmann,
findings mapping and engagement, and

Nestlé’s governance arrangements.
Social Report.
Our review was carried out to
provide reasonable, rather than
Jodi Bieber,
Richard Birch,
Patrick Brown /Panos Pictures,
statement Preliminary findings

Based on our work, it is our
absolute assurance and we believe
the scope above provides a
Markus Bühler-Rasom,
Douglas Engle,
Sam Faulkner /NB Pictures,
opinion that the Report: reasonable basis for our conclusions. Peter Garmusch,
● Includes information that is This independent statement should Peter Ginter,
reliable, understandable and not be relied upon to detect all Marcel Grubenmann,
errors, omissions or misstatements. Harmen Hoogland/Nestec Ltd.,
clearly presented and provides a
Marc Latzel,
reasonable account of relevant More detail on assurance
Nadine Markova,
activities and performance over the findings, key areas for Philippe Prêtre /APG Image,
reporting period; improvements, considerations Qilai Shen /Panos Pictures,
● Addresses and responds to and limitations and Bureau Veritas’ Jacob Silberberg /Panos Pictures,
issues pre-selected by Nestlé independence, impartiality Paul Weinberg /Panos Pictures
for reporting that are of material and competence are reported
importance to the organisation in our full statement on Printing
To: the stakeholders and its stakeholders; Nestlé should www.nestle.com/csv Entreprise d’arts graphiques
Jean Genoud S.A. (Switzerland)
of Nestlé S.A. now consider how it could further
provide transparency and context Bureau Veritas HS&E Ltd., Paper
Introduction on its impacts, risks and positive London, January, 2008 This report is printed on Profibulk,
Bureau Veritas has been engaged initiatives; a paper produced from well-managed
to provide external assurance ● Reflects a reasonable level forests and other controlled sources
to Nestlé S.A. (Nestlé) over its of completeness for a first certified by the Forest Stewardship
Creating Shared Value (CSV) Report comprehensive sustainability Council (FSC)
(the Report) and reporting process. report, with disclosure of
The preparation of the Report is performance on a range of issues;
the sole responsibility of Nestlé. Nestlé should now consider how
Our aim is to provide assurance to further develop meaningful Cert no. SQS-COC-100125
to stakeholders over the accuracy, indicators that will demonstrate

reliability and objectivity of the implementation of its long-term
information included in the Report. CSV strategy;
● Provides adequate information
Scope and methodology through its position, data and
The scope of the assurance case studies; Nestlé should now
included review of: consider how to present its position
1. Activities undertaken by Nestlé and performance in the most
over the reporting period balanced manner;
January 2007 to December 2007 ● Includes some information Statement of independence,
(unless otherwise stated); on the organisation’s internal impartiality and competence
2. Information relating to Nestlé’s systems; Nestlé should provide
issues, responses, performance greater detail in future reporting Bureau Veritas is an independent
data, case studies and underlying on the governance, accountability professional services company
systems to manage such and management structures to that specialises in quality, health,
information and data; enable greater understanding of safety, social and environmental
3. Information from external the internal management and management advice and © March 2008,
partners relating to materiality assurance of key issues. compliance with almost Nestlé S.A.,
assessment and stakeholder 180 years’ history in providing
convenings; and independent assurance services Public Affairs
4. An evaluation of safety, health and an annual turnover in 2006
and environmental (SHE) data and of EUR 1.8 billion. Nestlé S.A.
systems across a sample of global Bureau Veritas has
operational sites. implemented a code of ethics Avenue Nestlé 55
As part of its review, Bureau Veritas which is intended to ensure 1800 Vevey
undertook the following: that all our staff maintain high Switzerland
● Interviews with key management standards in their business
at Nestlé’s head office; conduct and prevention of
● Review of processes for conflicts of interest. www.nestle.com/csv
identification and collation of We believe our assurance
relevant information, report content assignment does not raise any
and performance data from Group conflicts of interest. e-mail:
operations; creatingsharedvalue@nestle.com

76% 22% 3% 16%

Reduction of
28% Manufacturing
and our
environmental
20.48
4.08
EN1
EN1
gases
157
59%
EN8
n/a
610 000 97 500 2-5%

Average annual milk
29.9 million
3.7
7.5
LA7
LA7
development
Products and
consumers
212
3 517
n/a
n/a
in CHF
Mrs Maïmouna
district, south
95
45
PR3
PR3
2
5

For a business
to be successful
in the long term
it has to create
value, not
only for its
shareholders but
also for society

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The Nestlé Creating Shared Value Report

The Nestlé Creating Shared Value

Report in the long term it has to

Report in the long term it has to

76% 22% 3% 16%

610 000 97 500 2-5%

76% 22% 3% 16%

610 000 97 500 2-5%

Creating Shared Value: the role of business in society 2

About this report 6

Business Principles and strategy 8

Manufacturing and our environmental footprint 10

Agriculture and rural development 26

Products and consumers 36

Support of the UN Global Compact Principles 52

Engaging with our stakeholders 54

Cover: Razia Berveen Left: Nestlé-

The Nestlé Creating Shared Value Report 1

Shared Value: cereal, which was created to save

the role that time onwards, the fundamental

of business create value for society, and in doing so

in society As a result of this strategy, over

2 The Nestlé Creating Shared Value Report

The Nestlé Creating Shared Value Report 3

Location of the Company’s Africa Europe

1866 Asia 27.2%

Year the Company was founded

10.6 billion North

Net proﬁt, in CHF

276 050 Sales and organic growth by product category, 2007

Product category Sales (CHF billion) Organic growth

480 Milk products and Ice cream

4 The Nestlé Creating Shared Value Report

The Nestlé Creating Shared Value Report 5

6 The Nestlé Creating Shared Value Report

Agriculture and rural development Environment, Products and consumers

Expertise and Providing ongoing Investing in local Building brands Increasing

Value for Securing supplies

Value for Improved yields and

● Our people: Acting as a responsible Reporting boundary and scope

The Nestlé Creating Shared Value Report 7

Principles widely different backgrounds in over

strategy is that our investments must be good

8 The Nestlé Creating Shared Value Report

Auditing and assurance standards Formal governance bodies

The Nestlé Creating Shared Value Report 9

Creating Value for Nestlé Value for society

10 The Nestlé Creating Shared Value Report

● Brazil: Popularly Positioned business, we are increasingly

12 The Nestlé Creating Shared Value Report

Nestlé’s drive for improved 5

energy efficiency has a 4.74

of GHG emissions is achieved

factories switching to cleaner

* Nestlé’s overall score in the Insight

Manufacturing and our environmental footprint 13

Nestlé’s state-of- income of around

14 The Nestlé Creating Shared Value Report

2.83 Integrating CSR concerns

We have reduced our energy

Manufacturing and our environmental footprint 15

Nestlé Waters represent no 180

more than 0.0009% of all 160