Communicating Creating Shared Value

Global Seminar

Lundquist Online CSR

Communications

21 October 2010

John BeeCommunications Manager Public Affairs Nestlé S.A

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Contents

• Creating Shared Value - a definition

• 2009 Performance highlights

• Communications history

• Recent developments

• Global yardsticks

• Reaction to date

• Questions

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Creating Shared Value: refined definition

“In Creating Shared Value, a company consciously identifies areas of focus, where: a) shareholders’ interest and society’s interest strongly intersect; and b) where value creation can be optimized for both.

“At Nestlé, we have analyzed our value chain and determined that the areas of greatest potential for joint value optimization with society are Water, Rural Development, and Nutrition."

"Development which meets the needs of the present without compromising the ability of future generations to meet their own needs"

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Nestlé Creating Shared Value: 3 focus areas

Rural Development Water Nutrition

REDUCING OUR ENVIRONMENTAL FOOTPRINT AND REDUCING OPERATIONAL COSTS

HELPING FARMERS IMPROVE EARNINGS AND ASSURING OUR SUPPLY OF QUALITY RAW MATERIALS

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2009 Performance Highlights

IMPROVING WORKERS’ EARNING CAPACITY AND CREATING A SKILLED WORKFORCE

IMPROVED NUTRITION FOR THE CONSUMER AND INCREASING SALES/PROFITABILITY FOR NESTLÉ

2004: The NestléCommitment to Africa

2005: The Nestlé Concept of CSR as implemented in Latin America

2006: The Nestlé Water Management Report

2007: The Nestlé Creating Shared Value Report

Reporting on Creating Shared Value 2004-2008

2008: The Nestlé CSV and Nutrition Report

2009: The Nestlé Creating Shared Value report

2010:Nestlé

Report on Rural

Development

CSV communications history

• Pre-2004: mailed reports to shareholders, opinion former database• 2005: first engagements in external congresses (eg BBC 2015)• 2006: first public report launch, New York, first use of online video• 2007: systematic engagement in water debate, ongoing video use. First

stakeholder engagement events• 2008: first full CSV report public launch; dedicated CSV area on

nestle.com; multiple video and photographic case studies• 2009: full launch of CSV concept at UN (New York). CSV Advisory Board

convened. Launch of www.creatingsharedvalue.org as vehicle for dialogue.

• 2010 Reporting fully online and GRI aligned. London CSV Forum attracts 4000 online visitors

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Creating Shared Value at Nestléwww.nestle.com/csv

Searchable repertoire of all community engagements (CSV and other): www.community.nestle.com

Non-Nestlé content and forum for dialogue: www.creatingsharedvalue.org

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Nestlé Creating Shared Value Advisory Board

• Michael Porter, Harvard Business School• Jeffrey Sachs, Columbia Earth Institute• John Elkington, Founder, SustainAbility• Nancy Birdsall, Exec. Director, Global

Development Institute• Ajay Vashee, President, World Farmers’

Federation• Joachim von Braun, Chairman, IFPRI• Venkatesh Mannar, Founder and President.

Micronutrient Initiative• Kraisid Tontrisirin, Former Director of Nutrition,

FAO• Robert Black, Professor in International Health,

Johns Hopkins Bloomberg School of Public Health. • Irv Rosenberg, Professor of Nutrition, Tufts

University• Robert Thompson, former Director of Agriculture,

World Bank• Ismael Serageldin, Biblioteca Alexandrina• Ruth O’niango, Founder and Director at Rural

Outreach Programme

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CSV Global Forum 2010- May 27, London

May 26 Dinner with 52 leading UK opinion formers

May 27 Forum: 4 panels - Creating Shared Value, Rural Development, Nutrition and Development, Water

– 250+ guests total including participants in Healthy Kids day– Voting on questions asked at each session: poll of KOLs– Live global webcast over www.creatingsharedvalue.org/ www.nestle.com/csv– Announcement of Creating Shared Value Prize winner

May 28 CSV Advisory Board meeting

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Creating Shared Value fora in Nestlé markets

Rio de Janeiro, Brazil23 November 2009

Mexico City, Mexico12 October 2009

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Nestlé Creating Shared Value Prize

– 540 Applicants

– Screening Committees (Nutrition, Water, Rural Development)

– Winner chosen by CSV Advisory Board:

– International Development Enterprises (IDE) Cambodia

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UN Global Compact and Millennium Development Goals 2009 UNGC Progress:Human Rights • Danish Institute of Human Rights analysis• Cocoa Plan: focus on Child Labour• Member, UNGC Human Rights Working Group

Labour • New HQ employee relations Centre of Expertise• Gender balance• Member, UNGC Labour Rights Working Group

Environment • Nespresso Ecolaboration programme• Co-led McKinsey Water Resources Review• IWMI study on water in supply chain, Punjab• Updated Policy on Environmental Sustainability

Participation in the Carbon Disclosure Project

Anti-corruption • CARE programme extended to include business integrity

2009 MDG Progress:Poverty and hunger• CSV in the dairy sector, Pakistan• Cocoa Plan income generation for farmers• Popularly Positioned Products: income generation

Education• Zakoura Foundation in Morocco• Nestlé Healthy Kids Global Programme

Gender equality• Gender Balance Workshops• Village Women’s Dairy Development Programme

Child Mortality/Maternal Health• Micronutrient Fortified Affordable products

HIV/AIDS, malaria and other diseases• Focus in Sustainable Tree Crops Programme• Employee programmes in e.g. South Africa

Environment• Nespresso Ecoloboration• Renewable Energy• Plastic bottle recycling promotion • Packaging optimisation

Global partnerships• CSV Advisory Board, IFRC, ICI, UNGC/CEO Water Mandate, Fairtrade,

Rainforest Alliance, Utz, RSPO

Nestlé ESG analyst ratings

rating Nestlé 19th out of Global 100

AAA rating (best-in class)

Nestlé’s Performance in Fulfilling Responsibilities to SocietyNet Ratings,* by Country, 2009

*"Among the very best" and "Above average" minus "Below average" and "Among the very worst”

Nestlé’s Competitive Performance in Fulfilling Responsibilities to Society Competitive Net Ratings,* by Country, 2009

* “Competitive net rating” scores were calculated by subtracting the average net performance rating of six companies from Nestlé’s net performance rating (above average minus below average)

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More available at: www.nestle.com/csv and www.creatingsharedvalue.org

Questions and Comments?