Nestlé Creating Shared Value

At Nestlé, the recognised world's leading Nutrition, Health and Wellness company, we believe that to be successful over the long-term we need to create value for our shareholders and for society as a whole. We call this Creating Shared Value (CSV). As an essential prerequisite for CSV we not only have to comply with all applicable legal requirements and The Nestlé Corporate Business Principles but also ensure that the principle of sustainable development is embedded in our activities, brands and products. This means protecting the future by making the right choices in an environment where water is increasingly scarce, natural resources are constrained and biodiversity is declining. All of these elements are vital for feeding a growing world population and for the development of Nestlé. Moreover, climate change may exacerbate our Planet's environmental challenges.

We apply a product life cycle approach involving our partners from farm to consumer and beyond. Specific to our food and beverage business we focus on water preservation, natural resources efficiency, biodiversity conservation, air emissions reduction, climate change adaptation, and zero waste. - Nutrition - Rural development - Water - Environmental Sustainability - Our people, human rights and compliance Environmental achievements: Improve resource efficiency in our operations: o We exceeded our 2015 objective by reducing energy consumption per tonne of product by 29% since 2005. o With 22% of factories achieving zero waste for disposal, we surpassed our 2015 goal and are now working towards zero waste for disposal in our sites by 2020. o We also retained our industry-leading position in the ‘environmental dimension' of the Dow Jones Sustainability Index Series, scoring 99 out of 100. o With our factories withdrawing 41.2% less water per tonne of product than they did 10 years ago, we have met our 2015 objective. o Our objective of conducting 10000 audits has been exceeded and, already, 61% of the non-compliances identified have been addressed Provided climate change leadership: o We surpassed our 2015 objective by reducing direct GHG emissions per tonne of product by 42.7% versus 2005, resulting in an absolute reduction of 14%. o We are phasing out synthetic refrigerants with high global warming and ozone depleting potential such as HFCs. We have also expanded the use of natural refrigerants by installing 33 new refrigeration systems. Promote transparency and proactive, long-term engagement in climate policy: o We joined the Technical Working Group of the Climate Disclosure Standards Board group and provided climate change information in mainstream corporate filings and reports Improve the environmental performance of our packaging: o In 2015, we avoided the use of 58284 tonnes of packaging material, equivalent to a saving of CHF 95.4 million. Over the last five years, this equates to the avoidance of 442946 tonnes of CO2eq – equivalent to taking 95876 cars off the road for a year. Assess and optimise the environmental impact of our product: o We have completed LCAs for all our product categories, and established and documented Nestlé Category Profiles for 15 categories. Provide meaningful and accurate environmental information and dialogue: o We use a variety of touchpoints to explain the complex topic of environmental sustainability to non-specialists. This includes making science-based information accessible to consumers in 119 countries. Preserve natural capital, including forests: o By the end of 2015, we had purchased 14.4 million tonnes of our 12 priority categories of raw materials: 54% of purchased volumes was traceable and 43% was Responsibly Sourced, in accordance with our RSG requirements. Improve resource efficiency in our operations: o By 2020: Achieve zero waste for disposal in our sites. o By 2020: Reduce direct water withdrawals per tonne of product in every product category to achieve an overall reduction of 35% versus 2010 o By 2016: For Tier 1 suppliers, cover 50% of the total volume sourced from Responsible Sourcing Guideline audited Tier 1 suppliers, with 70% compliance o Mr.Paul Bulcke joined and launched a coalition of leaders, “Champions 12.3” at Davos in February, focusing on accelerating progress towards the fulfilment of the United Nations Sustainable Development Goal (SDG) Target 12.3 that seeks to halve per capita, food waste and reduce food losses by 2030 Provide climate change leadership: o By 2016: All our new ice cream chest, upright and island freezers will use natural refrigerants. o By 2016: Expand the use of natural refrigerants, which do not harm the ozone layer and have a negligible impact on climate change, in our industrial refrigeration systems. o By 2017: All our new refrigerated trucks will use natural refrigerants. o By 2020: All new proprietary cold beverage dispensers of Nestlé Professional will use natural refrigerants. o By 2020: Reduce GHG emissions (scope 1 and 2) per tonne of product in every product category to achieve an overall reduction of 35% in our manufacturing operations versus 2010. o By 2020: Reduce GHG emissions per tonne of product by 10% in our distribution operations versus 2014. o By 2020: Reduce GHG emissions per tonne of product by 10% in the 100 major warehouses we use versus 2014. Promote transparency and proactive, long-term engagement in climate policy: o By 2016: Provide climate change information in our Annual Report package using the Climate Change Reporting Framework developed by the Climate Disclosure Standards Board. o By 2016: Implement Guide for Responsible Corporate Engagement in Climate Policy developed by CDP, the UN Global Compact, Ceres, The Climate Group, the World Wide Fund for Nature (WWF) and the World Resources Institute (WRI). Improve the environmental performance of our packaging: o By 2017: Continue to systematically analyse and optimise our packaging portfolio, avoiding the use of at least 100000 tonnes of packaging material from 2015 to 2017. Assess and optimise the environmental impact of our product: o By 2017: Identify or update and address sustainability hotspots for 15 product categories. o By 2017: Further enlarge the scope of our databases on agricultural raw materials used in EcodEX. Provide meaningful and accurate environmental information and dialogue: o By 2016: Fact-based environmental information will be accessible to consumers in all countries, enabling them to make informed choices and improve their own environmental impacts. Preserve natural capital, including forests: o By 2016: 40% of the volume of our 12 priority categories of raw materials will be assessed against our Responsible Sourcing Guideline requirements and is compliant, or improvement plans to preserve natural capital are ongoing. Pascal Gréverath - pascal.greverath@nestle.com