Creating Shared Value in the supply chain

Introduction to Nestl

The worlds leading nutrition, health and wellness company

Employs c330,000 people across 83 countries More than 7,000 people work across 19 UK sites 300 million worth of products exported every year to over 50 countries

Produces some of Britains most popular brands

E.g. KIT KAT, NESCAF, SMARTIES, GO CAT, SHREDDIES Over one billion KIT KATs produced in the UK every year

Nestl's culture

Corporate business principles are basis of organisations culture Guide behaviours and ways of operating Protect stakeholder interests
Consumers Human rights and labour practices Employees Suppliers and customers The environment

Nestl's principles embedded in its approach to Corporate Social Responsibility

Corporate Social Responsibility (CSR)

CSR involves considering business impacts on all stakeholders Nestl's raw materials grown in wide range of countries

Nestl's initiatives aim to create value for all

Creating Shared Value

Important to take a broad view of its responsibilities

Creating Shared Value (CSV)

An integral way of doing business for Nestl Based on codes of conduct and business principles

Aims to create value in 3 key areas

Water, Rural development, Nutrition

But goes beyond legal compliance Focuses on sustainability

Creating shared value in the supply chain

Each stage of supply chain adds value to next 2/3 of Nestl global expenditure on raw materials 40% of this goes on 3 ingredients milk, coffee, cocoa

Issues in supply chain affect quality and quantity of raw materials (e.g. cocoa beans)

Issues facing Nestl

Nestl operates within complex supply chain

Thousands of farmers in many different countries Farmers may use old methods

Supplier countries often have poor infrastructure Growing shortage of labour and skills as younger people leave cocoa farming Threatens supply of materials

The Cocoa Plan

Launched in 2009 in Cote dIvoire

Investment of 67m over 10 years Help cocoa farmers be more profitable through training and Fairtrade premium pricing Provide education for their children Improve respect for the environment Enhance quality of life

Aims to:

Ensures high quality, sustainable supply of cocoa for Nestl

Benefits of the Cocoa Plan

Investing in plant research

Improving social conditions

Higher quality seedlings produce typically 50%200% more cocoa Enables cocoa farmers to grow more and sustain a higher income To understand better crop and pest management techniques To improve awareness of child labour issues

Investing in training farmers

Partnership with the World Cocoa Foundation builds and repairs schools within cocoa farming regions School becomes viable option for parents/children and reduces risk of child labour Crops are certificated under the Fairtrade label Nestl pays premium price for beans Improves growers levels of income, helps future growth of communities

Fairtrade

Communicating with stakeholders

Cocoa plan is evolving, growing programme Effective communication helps to:

Nestl communicates through

Identify emerging issues Shape responses Drive improvements

Annual and CSV reports Supplier Code Corporate and Cocoa Plan websites Partnerships e.g. Fair Labor Association, Red Cross, governments