Creating Shared Value andSustainability Report 2022
Advancing regenerative food systems at scale

A message
from our
Chairmanand CEO

Contents3

Our progress against
our commitments

4

Our approach

10 On the road to net zero
15 Looking at thewhole landscape
19 More regenerative
practices on farms
23 Protecting biodiversity
25 Regenerating the water cycle
29 Ingredients produced
sustainably
33 Human rights andresilient communities
37 Supporting tasty andbalanced diets
42 Food safety and quality

Standing firm on our commitments.
Facing last year’s challenges was difficult, but doing so
has only strengthened our resolve. Just as the COVID-19
pandemic began to ease, supply chain disruptions
worsened, inflation surged and energy shortages tookhold. The invasion of Ukraine and its knock-on effects werealso felt around the world. Every business, communityand household faced tough choices in navigating our
turbulent world.
Nestlé remains committed to nutrition, health and wellness.
The company has made great progress in reducing thesodium, sugar and saturated fat in its products over the
past decade and that work continues. At the same time, we
are working to advance regenerative food systems and help
address food security. Drawing on our strong foundation in
Creating Shared Value we focus our energy and resources
to make a positive impact at scale.
Our greenhouse gas emissions have fallen below our 2018baseline even as we have grown, demonstrating that we aremaking progress on our Net Zero Roadmap. This journey
is not without challenges – we source raw materials fromhundreds of thousands of smallholder farmers who needcustomized technical assistance at a local level to help
them stay deforestation-free and make the transition toregenerative practices. We are supporting farmers throughinitiatives like the Nescafé Plan 2030 and our income
accelerator program for cocoa-farming families.

43 Packaging and circularity

After years of progress, the recent rise in food insecurity
is deeply concerning. Our commitment to maintaining
everyday basic food supplies and providing affordable
nutrition is unwavering. In 2022, we delivered
approximately 130 billion servings of affordable nutrition
fortified with at least one of the “big four” micronutrients:
iron, iodine, vitamin A and zinc.
With this report, Nestlé becomes the first company todisclose the nutritional value of its entire global portfolio.
We have benchmarked all in-scope products using the
Health Star Rating (HSR) system – a nutrient profilingsystem applied by the Access to Nutrition Initiative (ATNI)– and we have also disclosed sales from our wide range of
specialized nutrition products, which are not covered by the
HSR system.
As a global company, we have a role to play in international
efforts to combat societal issues. In 2022, Nestlé experts
participated in discussions in support of the UN Treaty
on Plastic Pollution, the UN Climate Change Conference(COP27) in Egypt, the UN Biodiversity Conference (COP15)
in Montreal and World Water Week, to name just a few.
While some may doubt our motives and question the levelof corporate influence in international negotiations likethese, in reality, we are there to push for policymakers tomake faster progress, raise standards and drive change
across our industries.
Our advocacy work is carried out in a responsible manner.
We are pleased to rank first among 25 food and beverage

47 Opportunities foryoung people
51 Our diverse andinclusive culture
55 An employer of choice
Nestlé CEO Mark
Schneider (left)
and Chairman Paul
Bulcke (right) in
Vevey, Switzerland.

companies benchmarked in ATNI’s Spotlight on Lobbying
scorecard, released in December 2022. We aim to leadthe way, and do so in part, through our continued support
for initiatives that seek to drive change, such as the
UN Global Compact.

63 About this reportover the past fifteen years and, as these regulations are
implemented, aim to continue our leadership in bothtransparency and performance. We invite you to read andenjoy this report and share your feedback with us.

After the invasion of Ukraine, our focus has been on
keeping our employees and their families safe, maintaining
our Ukrainian operations wherever possible and supporting
the Ukrainian people. Nestlé has committed more than
CHF 55 million to the people of Ukraine, including ourrecent CHF 40 million investment in a new production
facility, underlining our commitment to helping thecountry rebuild.
New regulations mean that from 2024, our sustainability
reporting will no longer be a voluntary exercise. We areproud to have been a leader in sustainability reporting

59 The foundations of
ethical businessPaul Bulcke

U. Mark Schneider

Chairman

Chief Executive Officer

Welcome to the Nestlé
Creating Shared Value andSustainability Report 2022.
We report on the topics that are
most material to our stakeholders
and our business. In this report
we cover our approach andperformance on each topic,
supported with expert voices
and case studies.

Creating Shared Value and Sustainability Report 2022

2

Our progressagainst ourcommitments

We are aiming for ourcoffee supply chain to beassessed deforestation-freeby 2025.

2022 data for KPIs on this pageare EY assured.
The EY limited assurance reportand conclusion can be foundat www.nestle.com/assurancestatement
Our Reporting Scope andMethodology for ESG KPIs
document provides details anddefinitions and can be found here

About Nestlé

COMMITMENTKEY PERFORMANCE INDICATOR

2020

2021

2022

275 000

We aim to reduce our greenhouse gas (GHG) emissions by 20% by 2025 and 50% by 2030 from2018 levels, on the road to net zero by 2050 at the latest

Million tonnes of CO2e reductions compared with business-asusual scenario1

N/A

-4.0

-6.42

We aim to achieve and maintain 100% assessed deforestation-free primary supply chains (formeat, palm oil, pulp and paper, soy and sugar) by 2022 and 2025 for cocoa and coffee

Percentage of our primary supply chains for meat, palm oil, pulp
and paper, soy and sugar assessed as deforestation-free (%)

N/A

97.2%

99.1%

Countries we sell in

We aim to source 20% of key ingredients through regenerative agriculture methods by 2025
and 50% by 2030

Percentage of key ingredients sourced throughregenerative agriculture methods3 (%)

N/A

N/A

6.8%

94.4

We aim to reduce water use in our factories by 6 million m3 between 2021 and 2023

Water use reduction in factories (million m3)

-1.69

-2.30

-2.38

We aim for 100% of key ingredients volumes to be produced sustainably by 20304

Percentage of key ingredients produced sustainably (%)

N/A

16.3%

22%5

Number of servings of affordable nutrition with micronutrient
fortification (MNF) (billions)

120.0

128.66129.2

By 2025, we aim to design above 95% of our plastic packaging for recycling
and continue to work toward 100% being recyclable or reusable

Percentage of plastic packaging designed for recycling7 (%)

74.8%

74.9%

81.9%

By 2025, we aim to reduce virgin plastics by one third, versus our 2018 baseline

Percentage virgin plastic reduction (versus 2018 baseline) (%)

-4.0%

-8.1%

-10.5%

By 2030, our ambition is to help 10 million young people around the world have access toeconomic opportunities

Millions of young people around the world with access toeconomic opportunities since 2017

2.45

3.89

5.62

We aim to increase the proportion of women in our top 200+ senior executive positions to
30% by 2022

Percentage of women in the top 200+ senior
executive positions (%)

Employees acrossall our operations

188
BillionGroup sales in CHF

Table of contents

25.6%

27.2%

30.2%

Read more about independent
assurance of this report on
page 63.
1. Our current KPI compares our GHG
emissions in 2022 with a businessas-usual scenario. We will report
reductions against our 2018 baseline andprogress toward our commitments infuture reports.
2. A significant change in our calculation
methodology in 2022 means data for 2021
and 2022 are not comparable.
3. In 2022, only the following sources areincluded in regenerative agriculture
volumes: fresh milk, Ecuadorian cocoa,
green coffee and Libby’s vegetables
sourced through direct procurement/
Farmer Connect or for Nespresso, Nestlé
Nutrition cereals and vegetables that are
traceable back to a farm/cooperative level
and raw materials that are covered by
the Living Soils initiative with Earthworm
Foundation for Nestlé France. The
denominator includes all raw materials
in scope.
4. Key ingredients refers to 14 key
agricultural raw materials that cover 95%
of our annual sourcing by volume: cereals
and grains; cocoa; coconut; coffee; dairy;
fish and seafood; hazelnuts; meat, poultry
and eggs; palm oil; pulp and paper; soy;
spices; sugar; and vegetables.
5. Change in definition in 2022 means
year-on-year data are not comparable.
See Ingredients produced sustainably.
6. Number corrected to adjust for someproducts that were reclassified.
7. As per Ellen MacArthur
Foundation definitions.

Creating Shared Value and Sustainability Report 2022

3

Our
approach

Advancing regenerative
food systems
we stayed true to our course and, as we survey
our progress to date, it is even clearer that weare on the right path. Indeed, it is the only truly
pragmatic course to take.

Rob Cameron
Global Head of Public Affairs
and ESG Engagement, Nestlé

Climate achievements
As 2023 began, much of the northernhemisphere was gripped by extreme weather.
Across North America a so-called “once in a
century freeze” spelt death and destruction
for some, and chaos and disruption for
many. In Europe, extraordinary warmth
triggered a welcome fall in gas prices but saw
meteorological records tumble throughout
the continent. Meanwhile, countries from
Australia to Nigeria and Pakistan were still
recovering from the devastating floods
experienced in 2022. Climate change is now
a lived experience, not a future projection. For
a company as dependent on agriculture as
Nestlé, this matters – greatly – and is why weare so determined to play our part by reaching
net zero no later than 2050.
In last year’s report, we set out the case foraction to advance regenerative food systems.
Of course, 2022 saw many unexpected andextreme challenges. Notwithstanding these,

At Nestlé, we are making it ourbusiness to advance regenerative foodsystems at scale – our own resilience andsuccess depend on it.

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In terms of achievements during the year,
our greenhouse gas emissions fell below
our 2018 baseline for the first time, despitecompany growth. Our emissions fell by 6.4
million tonnes compared with a business-asusual-scenario, and we will endeavor to further
reduce them, even as we grow.

Rob
Cameronspeaking
at COP27
in Egypt inNovember
2022 onregenerative
agriculture.

At Nestlé, we recognize that immediate actions
and reductions are needed so we have taken
steps to reduce our Scope 1 and 2 emissions.
However, the greater part of our emissions isfrom Scope 3 and this is where our promise toadvance regenerative food systems at scale iscoming to life. We recognize that achieving net
zero is not possible unless there are actions
taken to fight deforestation and to restore
degraded forests and plant new trees.
This is why we are so committed to our Forest
Positive strategy. This strategy puts people atthe center, with concern for livelihoods, land
rights and human rights. For maximum andlong-lasting impact, our actions must be taken
in a context that goes beyond the farmgate
and into our broader sourcing landscape.
We also know that it is not possible for us
to achieve net zero without fully scaling up
regenerative agriculture practices. We are
adopting a similar, people-centric approach as
we have for forests by supporting farmers tomake the transition to regenerative agriculture.
During 2022, we worked closely with farmers
around the world to help them adopt practices
that will help store carbon in soil while
improving soil health, biodiversity, and water

security and quality. In an external context, theconcept of a “just transition” was frequently
discussed during 2022 and at Nestlé we areplaying our part in the move from concept
to delivery.

No stone left unturned

Of course, emissions from some commodities
such as dairy are higher than others. We are
exploring – and deploying – a wide variety oftools to make deep and rapid cuts in methane
emissions. Some stakeholders would have us
diversify from dairy altogether. That is not ourway. The atmosphere makes no distinction
between who owns the source of emissions
and simply transferring ownership somewhere
else will not help. We are committed todriving those emissions down and that iswhat we are doing.
There was some welcome progress in theinternational arena in 2022. While progress at
the COP27 Climate Conference was less thanhoped for, it was far better than many had
feared. And the UN Biodiversity Conferenceagreement to protect and preserve 30% of theplanet and 30% of degraded ecoystems by
2030 showed that international agreement ispossible, and we look forward to playing ourpart in delivering on this goal. The Uruguay
round of talks in pursuit of a legally binding
global plastics treaty was another important
step forward on a highly complex issue. As a
final note, our presence at such international
events, along with many other like-mindedbusinesses, is to encourage policymakers
to act. We want to see a “high-level playing
field” and we will continue to raise our voicein pursuit of a just transition to a net zero andregenerative food system. All of our advocacy
activities are carried out in line with the aims
and ambitions of the Paris Climate Agreement.

Creating Shared Value and Sustainability Report 2022

4Strategy overview
Our purpose is to unlock the power of food to enhancequality of life for everyone, today and for generations tocome. Creating Shared Value is the way we set out toachieve this purpose. It is an approach to business thatseeks to be good for us, our shareholders, society andthe planet. Our value creation strategy builds from thisfoundation in our product portfolio.

A climate-centered approach
The climate crisis is exacerbating the global food crisis. An
unsustainable food system – responsible for up to a thirdof the world’s emissions – is making the problem worse.
We must move rapidly to a better way of nourishing our
growing population, equitably, affordably and sustainably.
This is why we want to accelerate the shift to regenerative
farming in this decade. By 2030, we expect half of our
key ingredient volumes will come from farms engaged
in practices that enrich the soils, replenish natural water
cycles and/or soak up carbon. Building on actions that
ensure our key supply chains are deforestation-free, we
are applying this same regenerative mindset to help local
communities protect forests and restore ecosystems. We
want to help preserve the natural resources that all aspectsof life, food and our business rely on.
The shift to regenerative farming will only succeed byputting farmers’ needs and aspirations at the center – thisis not only fair, we believe it’s a condition for success. Thismeans partnering with the more than 600 000 farmers
in our supply chain to share, develop and embed new
approaches together, while backing them up where neededwith the technical and financial help they need to start andsustain the journey. It also means respecting the rights
of communities and indigenous peoples in the places ouringredients come from. And we must go further – helping
farmers in the most climate-vulnerable regions to increase
their resilience, adapt to adverse weather, while paying
them more for products they grow regeneratively, so theirfamilies and communities also prosper from helping tobuild a better food system.

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Consumer appetite for change is accelerating, too. Ourreach means we have a unique opportunity to deliver onand drive up demand for sustainable, nutritious diets.
This is why we are reformulating our products, rapidly
expanding our portfolio of plant-based choices and working
with farmers to rethink every dimension of dairy to become
net zero. Good food is at the center of our business, so
we want to use the breadth of our products and brands
to make sustainable choices available and attractive toeveryone, everywhere.
Even as we grow, we will continue to endeavor to drive
down our emissions and get to net zero. We aim to halve
our carbon footprint this decade from 2018 levels and willreport our progress, transparently. To achieve that, we
are working on transforming every aspect of our business– from switching our trucks to alternative fuels and ourfactories to renewable electricity, to improving circular
packaging solutions that reduce plastic and can be moreeasily recycled or reused. These transformations are notjust good for the climate: becoming a business that puts
regeneration at the core of our company reduces ourcosts and makes us more resilient – and this is good for
Nestlé, too.

Our B Corp-certified brands

In April 2022, Nespresso became B Corp-Certified, joining
a global community of businesses that meet the highest
standards of sustainability and social responsibility.
Nestlé Health Sciences North America also achieved
this certification in November. The move means thatapproximately 10% of Nestlé global sales are now
B-Corp certified.

Nestlé viewpoint

The impactof our brands
Maureen Kingston
Global Marketing Strategy LeadHow our brands are contributing toour strategy.

Elsewhere, Gerber is taking action to deliver waste-free
factories and carbon-neutral recipes, while Cerelac aims
to source 100% of its key ingredients through regenerative
agriculture methods by 2030 – well ahead of our global
commitment of 50%.
It is exciting to see our brands taking ownership of theirsustainability journeys and delivering meaningful impact.

Our brands play a critical role in delivering our global
sustainability commitments. Each brand’s contribution is
unique, reflecting the differing sustainability challenges andopportunities that each category faces. Yet collectively, theirefforts cumulate in our corporate sustainability impact.
With this in mind, we have developed the Brand
Contribution Framework, to help each brand identify therole they will play in helping us achieve our corporate
goals. Our brands identify how they can best contributeacross three commitment areas: People, families and pets,
People and planet, and People in communities. Oncethey have identified the topics within each area to focus on,each brand makes a sustainability promise, with supporting
actions and indicators for measuring progress, and selects
minimum one area where they want to lead the way incomparison with their peers. The brands’ actions are thenbrought to life through our packaging and communications,to inform our consumers who increasingly are seeking to
make sustainable choices.

Brands in action

There are plenty of examples among our well-known
brands. Purina PetCare has been working with farmers
in France to improve soil health and sequester carbon
since 2020. Nestlé Waters is working at a local level, fromnational parkland in Spain to farmlands in Pakistan, to help
regenerate the local water cycle. The Nestlé Waters brands
don’t see regenerative practices as one element of theirsustainability promise, but as central to the entire effort.

Creating Shared Value and Sustainability Report 2022

5

GovernanceOur governance structure
BOARD COMMITTEES
Sustainability
Committee (SC)BOARD OF DIRECTORSThe board is responsible for the company’s strategy
and organization, including financial and non-financial
reporting. This comprises identifying and enforcing
both statutory and internal disclosure rules on ESG
matters, particularly where ESG risks may affect
the Company’s performance.

Sound governance is integral to building
trust and maintaining our license tooperate. It is a cornerstone of our ability
to create shared value.

deforestation, plastic packaging designed for recycling,
reduction of water use in factories, affordable nutrition withmicronutrients and the global youth initiative. Full details ofboard-level remuneration and bonuses are available in ourCompensation Report.
The ESG and Sustainability Council oversees oursustainability strategy. The Council is chaired by our
Executive Vice President (EVP) Head of Strategic
Business Units and Marketing and Sales. The Council
has the following workstreams: 2050 Net Zero,
Sustainable Packaging, Water, Sustainable Sourcing
and Communications and Advocacy. The structure helps
to accelerate and standardize decision-making on a
global level.

Our governance structure reflects our purpose, enables
our strategy, and supports our commitments. Our
environmental, social, governance (ESG) and sustainability
strategy is at the heart of our decision-making. Oursustainability agenda and performance is reviewed by the
Sustainability Committee of the Board of Directors.
The Board of Directors, which includes 12 independent
members, along with the Chairman, CEO and Executive
Board, is responsible for supervising our Creating Shared
Value strategy and program. Executive Board remuneration
is linked to ESG indicators. ESG objectives (15% of thetarget) are annually set by the Compensation Committee
and reflect selected performance measures from the
Nestlé ESG/Sustainability agenda. For 2022, they relate toSound governanceunderpins sustainability
performance. Shown here,
our Chairman addressing
stakeholders for our
2022 AGM.

In 2022, the Council welcomed three new members – theHead of Zone North America and the Head of Zone Greater
China, as Nestlé added two new geographical Zones to
its management structure, and the Deputy EVP and Chief
Communications Officer. The Council meets every monthand regularly reports to the full Executive Board.
We monitor our Creating Shared Value and sustainability
performance against key performance indicators using aninternal dashboard. Performance data are generated on aquarterly basis and progress is reviewed by the ESG and
Sustainability Council.
For full details of our governance structure, see our latest
Corporate Governance Report.

The SC reviews theCompany’s sustainability
agenda including themeasures which ensure
the Company’s long-termsustainability strategy
and its ability to createshared value.

Audit
Committee (AC)The AC is informedof the content of ournon-financial reporting
and audit process of
selected assured metrics.

EXECUTIVE BOARD

CREATING SHARED VALUE (CSV) COUNCILThe Company’s Executive Board is responsible for the
execution of the Company’s sustainability strategy,
which includes the handling of the mandatory
reporting obligations, with delegation to the ESG and
Sustainability Council.

The CSV Council is an external advisory bodythat advises senior management on a range ofsustainability issues.

ESG & SUSTAINABILITY COUNCILZONES &
MARKET
MANAGEMENTThe ESG and Sustainability Council provides strategic
leadership and execution support, and drives theimplementation of Nestlé’s sustainability strategy,
including our 2050 Net Zero Roadmap, ensuring focus
and alignment.
Five workstreams:– 2050 Net Zero
– Sustainable Packaging– Water– Sustainable Sourcing– Communications and Advocacy

Management is
responsible for
ensuring the provisionof relevant data
for the Group nonfinancial reporting,and for complying
with the non-financial
reporting obligations
at local level.
Key:

ESG STRATEGY & DEPLOYMENT UNIT
Ensures execution, monitors external developments,
and defines KPIs in support of Nestlé’s sustainability
strategy. Coordinates sustainability activities and has theoversight of internal ESG data and external disclosures.
It also advises Nestlé’s ESG and Sustainability Council.

Board level
Nestlé executive
External advisory
Approves
Reports
Advises

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Creating Shared Value and Sustainability Report 2022

6

MajorOur material topics

Materiality matrix

In 2022, we worked with an independent third party to
conduct desk research and interviews with 55 internal andexternal stakeholders. The desk research identified 29 shortand long-term material topics that were then explored during
the interviews. The external stakeholders included suppliers,
investors, customers, non-governmental organizations andbusiness associations. Internally, they included executive
board members, functional heads and market heads. Theirrespective tasks were to classify Nestlé’s impact on each
topic and each topic’s impact on Nestlé.
The process was overseen by the ESG and Sustainability
Council and the outcomes were reviewed by the
Sustainability Committee of the Board. The results are
helping us identify risks and opportunities and adjust our
strategies and priorities accordingly.

Materiality assessment results
The results of our 2022 materiality assessment aresupporting decisions on where to focus our resources.
Enterprise Risk Management (ERM) is the process ofidentifying and addressing risk. The full alignment of ourmateriality and ERM processes help give us essential shortand long-term visibility on key topics.

Table of contents

Risk management
At a Group level, our approach to risk is aligned to our
purpose, with a focus on operational, strategic, complianceand reputational risk across our financial and nonfinancial landscapes. A risk assessment at Group level isconducted annually.
ESG topics are built into our ERM process. This helps
to ensure that the full range of sustainability topics areincorporated into the risks and opportunities that areconsidered across the company.
Risks relating to the environmental and social impact of
the supply chain, including exposure to human rights
risks, are reviewed at Group management level. There isalso a detailed supplier risk program in the procurement
function. If required, cases relating to our risk assessment
processes are escalated to the Executive Board and related
findings are reflected in decision-making processes at an
operational and strategic level.
As a business leader, we are committed to transparency
and action on climate-related risks and opportunities.
As such, we have aligned our reporting with therecommendations of the Taskforce on Climate-related
Financial Disclosures (TCFD). Our TCFD-aligned
disclosures, including our analysis undertaken in 2022, canbe found in our 2022 Climate Risk and Impact report.

Significant
Moderate

Since 2020, ecological impacts (affecting natural resources,
biodiversity and ecosystems) and circular economy wereamong the topics to have gained importance for bothinternal and external stakeholders. All these topics arecovered in this report.

8

Ecological impacts

7

GHG emissions*19
22

Employee health& safety6Physical impacts ofclimate change*

14

Health and nutrition

10

Environmental & social
impacts of ingredientsupply chain

18

Product quality & safety

Advancing regeneration
1

Access & affordability

16

Product labeling &marketingAnimal welfare

24 Business ethics

5

Air emissions

13

Community relations

12

3

4

6

7

Protecting biodiversity

Circular economy

8

Regenerating the water cycle

Human rights &labor practices

23 Employee acquisition,

20 Packaging lifecycle

management

talent management &retention***21

2

On the road to net zero

28 Customer satisfaction

15

11

9

Ingredients produced
sustainably
10

Employee engagement,
diversity & inclusion**

11

Human rights andresilient communities

2

Systemic risk
management

17

3

Critical risk
management

29 Business models &25Management of thelegal & regulatoryenvironment

Changing consumption
patterns
innovation & technology

27

Cybersecurity &information security

12

13

Supporting tasty andbalanced diets
14

15

16

17

Food safety and quality
18

Packaging and circularity
19 20
4Negligible

The world constantly changes. We need to stay on top of
those changes and how they can affect our stakeholders
and our operations. Specifically, we need to identify
where Nestlé has the greatest impact on society and theenvironment. We also need to know which topics have thegreatest potential to influence our business success. This is
why we carry out a comprehensive materiality assessment
at least every two years.

Water management

5

Impact of Nestlé on people and the environment

It is critical to identify our key risks andmaterial issues. By understanding which
topics impact our stakeholders andbusiness the most, we can determine
where our focus should be.

The topics identified as among the most important by bothinternal and external stakeholders are:
– Health and nutrition– Environmental and social impacts of the ingredientsupply chain– Water management– Ecological impacts– Greenhouse gas emissions– Product quality and safety– Packaging lifecycle management

9

The following chaptersand accompanying reports
provide more details on eachmaterial topic:

1

Governance structures& mechanisms

Our diverse and inclusive culture

Organizational set-up
and efficiency

21

26 Data privacy

An employer of choice

management

Negligible

Moderate

22 23

Significant

The foundations of
ethical businessMajor

24 25 26 27

Importance and impact on Nestlé’s business successAnnual Review* Chapters Looking at the whole landscape and Moreregenerative practices on farms also cover this topic.

** An Employer of choice also covers this topic.
*** Opportunities for young people also covers this topic.

28 29

TCFD Report6

Our materiality process

Material
topicsselection

Establish
external
context

Stakeholder
engagement

Materiality
assessment​

Review
strategies

Publish in
CSV andSustainability
ReportSustainability
Accounting Standards
Board (SASB) aligned
material topics selected

AI software analysis andanalysis of environment

55 interviews conducted
and surveys collected

Quantitativeand qualitative
input assessed

Identify risks andopportunities in results
and adjust priorities
accordingly

Share results internallyand externally

Creating Shared Value and Sustainability Report 2022

7

Stakeholder
engagement

Key topics covered?
– Corporate strategy andworkplace culture– Employee and management
performance, staff welfare
and benefits– Sustainability and regeneration– Internal and external reportingof non-compliance concernsand questions

We engage with stakeholders at a local, regional, national
and international level. When doing so, we apply the
Nestlé Corporate Business Principle of “transparent
interaction and communication” to foster collaboration,knowledge sharing, open discussion and deep dialogue.

Throughout the year, we also consult regularly with our
CSV Council, an external advisory council establishedin 2009 and formed of a group of experts from a broad
range of fields, from corporate responsibility, strategy andsustainability to nutrition, water and rural development.
The Council has an advisory role. In 2022, topics discussed
included implementation of the Nestlé packaging visionand commitments, progress on our Net Zero Roadmap
and regenerative agriculture commitments, the roll outof our income accelerator program and our commitment
to provide transparency on the nutritional value of the
Nestlé portfolio. The Council also discussed how todevelop our sustainability reporting in light of incoming
regulatory requirements.
In 2022, we were pleased to be ranked first among
25 food and beverage companies benchmarked in the
ATNI’s Spotlight on Lobbying scorecard, released in
December 2022. Nestlé received the highest score forits policy commitments and management systems, andthe second highest score for disclosures.

Table of contents

Employees

How did we engage?
– Regular internal
communication campaigns– Regular forums andpanel events– Regular surveys and webinars– Periodic performance anddevelopment reviews– Collective action for employees

Considering external feedback isfundamental to our approach.

Our stakeholder universe is large and varied and we engage
with our stakeholders in many different ways. However,each project, launch, collaboration, campaign and event
has a common purpose: to help advance regenerative foodsystems at scale.

Examples of engagement in 2022

Nestlé employees speaking at
a workshop at COP27 in Egypt
in November 2022, on efforts
to advance regenerative foodsystems at scale.

What did we do?
– Ran Employee Resource
Groups focused on people withdisabilities, such as THRIVE– Continued to create an
open culture and dialogue
around disability with our
NestAbility network– Promoted the inclusion ofpeople with disabilities throughmembership of the ILO Global
Business and Disability Networkand signing The Valuable
500 commitment to elevatedisability inclusion to ourleadership agenda– Continued to raise awarenessof Speak Up, our internal andexternal reporting channel for
non-compliance concerns andquestions. The global rolloutof the channel was completed
during the year

Suppliers

How did we engage?
– Periodic supplier meetings
and workshops– Regular safety training
for contractors– Annual conferences– Periodic audits andassessments
Key topics covered?
– Advancing regenerative foodsystems at scale– Human rights and labor rights– Internal and external
stakeholder performance
What did we do?
– Piloted the Child Risk
Assessment Framework toolkit
with a supplier in 2021 andcompleted the pilot in 2022
– Took part in and sponsored theSustainable Brands Conferencein San Diego, United States,
where we shared our progresson advancing regenerative foodsystems at scale, focusing on
our Nescafé, Libby’s and Gerberbrands in particular– Launched the Nescafé Plan
2030 as an online webinar.
Over 1000 registrants were inattendance – including suppliers– Worked with an independent
third party to interview
55 internal and external
stakeholders as part of ourmateriality assessment.
These included suppliersand customers– World Water Week panel eventand engagement with suppliers

Consumers

How did we engage?
– Brand campaigns– Key opinion leader labs
– Site visits and open days
– Annual Nestlé CSV &Sustainability Report– Interaction via social
media channels
Key topics covered?
– Connecting brand sustainability
plans with key opinion leaders– Company performanceand strategy– Sustainability performanceand strategy
What did we do?
– Held a stakeholder engagement
initiative with key opinion
leaders before the launch of
the Nescafé Plan 2030 – thefeedback was used to refine thefinal details– Engaged consumers, media
and partners to amplify adialogue around diversity andinclusion with Nestlé Canada,
KitKat Chocolatory and Friendsof Ruby– Communicated Generation
Regeneration proof points
related to our promise toadvance regenerative foodsystems at scale

Customers

How did we engage?
– Regular leadership meetings– Nestlé Net Zero Roadmap
communications– Forum and panel events– Workshops on joint
sustainability roadmaps
Key topics covered?
– Nestlé Net Zero Roadmap
and commitments– Brand and category
sustainability strategies– Recyclable orreusable packaging– Alternative delivery systems(refill and reuse)– Plant-based and“Better for you” options
What did we do?
– Responded to sustainability
requests including through
EcoVadis and CDP– Nestlé Professional organized a
LinkedIn webinar about Nescafé
Plan 2030 for its out-of-homecustomers and provided a
specific social media toolkit
and website banners; over 500
people attended the webcast– Nestlé was recognized as a
Giga-Guru partner – a supplierwith a SMART goal andpublicly reported emissions
reductions – under Walmart’s
Project Gigaton– Built joint roadmaps and actionplans together with customers,
unlocking synergies.
– Continued partnership testing ofrefill-and-reuse delivery systems
and scalable business models

Investors and analysts

How did we engage?
– Annual General Meeting– Regular investor meetings andinvestor days
– Regular analyst calls– Periodic Chairman’s
Roundtables– Annual Nestlé CSV &Sustainability Report
Key topics covered?
– Company performanceand results– Business development, goals
and forecasts– Company sustainability
strategy performance,development and outlook,including environmental,social and governance issues
and commitments– Implications of climatechange, COVID-19 andgeo‑political issues
What did we do?
– Engaged with the investmentcommunity through our
Annual General Meeting andregular investor meetings andanalyst calls– Held Chairman’s Roundtables
virtually and face-to-faceduring the year withinvestors in Germany, Japan,
Singapore, Switzerland andthe United Kingdom

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Governments, internationalorganizations, NGOs

How did we engage?
– Participation at the 27th
Conference of the Parties tothe United Nations Framework
Convention on Climate Change(COP27) and the United Nations
Biodiversity Conference (COP15)
event in Montreal– Supporting the UN Treaty on
Plastic Pollution negotiations– Participation at UN General
Assembly Week in New YorkKey topics covered?
– Food system issues andclimate change– Regenerative agriculture– “Water positive” development– Plastics pollution– Biodiversity
What did we do?
– Worked with the Governmentof Egypt to help journalists
understand food systems
issues ahead of COP27. We alsosponsored pavilions and stands.
Nestlé’s Head of Operations
spoke on accelerating
the transition to resilient
food systems– Took part in a panel event
during World Water Week
in Stockholm, where the
UN Water Mandate and the“water positive” concept
were discussed– Called for leaders to create
a global framework to
tackle plastic pollution
through the World Economic
Forum ahead of the UN
Environment Assembly

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Global partnerships

How did we engage?
– Developed new partnerships– Participated in global events
Key topics covered?
– Plastics use andtackling pollution– Corporate responsibility,
strategy and sustainability– Nutrition, water andrural development– Emergency relief
What did we do?
– Entered a global partnershipwith World Central Kitchen,a non-profit organization thatspecializes in providing meals
for people who have been
affected by catastrophic events.
– Entered the Business Coalition
for a Global Plastics Treaty,
to support the developmentof an ambitious, effective
and legally binding UN treaty
to end plastic pollution. The
coalition is convened by the
Ellen MacArthur Foundationand WWF and supported bystrategic NGO partners

Industry associations

How did we engage?
– Development initiatives– Regular forums andpanel events– Annual conferences– Regular communication
campaigns
Key topics covered?
– Corporate climate action– Safeguarding natural resources– Employee health and well-being
What did we do?
– Continued to work with theWorld Business Council for
Sustainable Development on
corporate climate action– Provided ongoing support to
the International Chamber ofCommerce and Business for
Nature in calling for strong
action by policymakers tosafeguard natural resources– Continued to work with theConsumer Goods Forum, as amember of the Employee Healthand Well-being working group.
– Worked with the CEO Water
Mandate and WASH4Work

Academia and the science
community
How did we engage?
– The World Food Forum– Regular stakeholder
consultations– Nestlé International
Nutrition Symposium

Key topics covered?
– Transforming foodinnovation through scienceand collaboration– Present and future
nutrition challenges– Preserving nutritional goodness
from farm to fork
What did we do?
– Co-organized with Swiss Food
& Nutrition Valley an official side
event during the FAO Scienceand Innovation Forum. The
focus was transforming foodinnovation through scienceand collaboration– Carried out consultations with
global health experts to gather
insights on present and future
nutrition challenges and inform
our nutrition approach– Hosted more than 20
leading scientists at the
Nestlé International Nutrition
Symposium to assess scientificevidence on preserving
nutritional goodness fromfarm to fork

Nestlé sponsored stands
and pavillions at COP27.

Farmers, local communities
and young people
How did we engage?
– Income accelerator
program launch– Nescafé 2030 Plan
– Pilot projects for farmers– Development initiatives– Forums and panel events– Community engagement
and investment

Key topics covered?
– Farmer agronomy support– Net zero in dairy– Economic opportunities
for young people
What did we do?
– Launched our innovative
income accelerator program,with a digital stakeholder event,attended by 470 participantsfrom 44 countries– Continued to offer farmers close
agronomy support and worked
directly with them on various
pilot projects. This includes
our international network of
14 R+D Accelerators– Gave farmers a platform
for their voices to be heard
at COP27– Created the Youth
Entrepreneurship Platform, or
YEP, a single, online location
where young people candiscover the wide range of help
we can offer to bring innovation
to life

Our global partnership withWorld Central Kitchen helps
provide meals for people
facing catastrophic events.

Community engagement
Nestlé has been engaged in giving programs since ourfoundation over 150 years ago. Today, improving access tohealthier foods, as well as providing relief to people andcommunities during disasters, helps support what we do.
In 2022, we donated more than CHF 120 million, and mostof our contributions were related to food access.
In Ukraine, since the invasion, our focus has been on
keeping our employees and their families safe, maintaining
our operations wherever possible, as well as supporting
the people of Ukraine. In 2022, Nestlé committed a
CHF 40 million investment for a new production facility andmore than CHF 14 million in contributions to the people of
Ukraine, together with the International Federation of Red
Cross and Red Crescent Societies. We have provided morethan 4200 tonnes of food donations through various local
and international partner organizations. With the UkraiNEST
Foundation, we organized an employee fundraising torestore the homes of our colleagues in the country.
In June 2022, Nestlé entered a global partnership withWorld Central Kitchen, a non-profit organization thatspecializes in providing meals for people who have been
affected by catastrophic events. Nestlé has supported
World Central Kitchen in an initial one-year agreement andwith a CHF 1 million donation to its Climate Disaster Fund.
During the year, we engaged with World Central Kitchen to
support various communities stricken by extreme weather
events related to the climate crisis, including those affectedby floods in Pakistan, as well hurricanes Fiona and Ian in
Puerto Rico and the United States.
Our offices and 344 factories around the world support
their local communities in many ways, including throughjob creation and economic growth. They also organize
charitable activities, including support for events in andaround Vevey, Switzerland, home to our headquarters.

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9

On the roadto net zero

NET ZERO ROADMAP

Progress on our roadmap to 20% reduction in greenhouse gas emissions
by 2025 and 50% reduction by 2030 and net zero by 2050
2018 baseline (million tonnes of CO2e)

Peak carbon

110

99.7* Business-as-usual scenario
93.3 Actual emissions

100
90

6.4

94.3*

2018 baseline
80

Million tonnes of CO2e reductions comparedwith business-as-usual scenario
68%
Ingredientsourcing

28%
Manufacturing

4%
Packaging

70
60
50

Key initiatives
delivering GHG
emissions reductionsin 2022

40
30
20
10
0

2018

2019

2020

2022

2021

2030

Net Zero Roadmap launched

GHG EMISSIONSRENEWABLE ELECTRICITY

Total Scope 1, 2 and 3 GHG emissions

Renewable electricity sourced
in all our sites at year end (%)(million tonnes of CO2e)
Scope 1(emitted directly)
Scope 2(emitted indirectly
market-based)

2020

2021

121.52*120.62*116.59

50.5% in 2020

2022

63.7% in 2021
115.83

78.4% in 2022

112.90108.90

Scope 3(in scope for
Net Zero Roadmap)

2018 baseline:
In scope for Net Zero Roadmap

Scope 3(not in scope for
Net Zero Roadmap)

100%
by 2025

Climate change is already here.
Urgent action is needed. At Nestlé,
we have put peak carbon behind us
and are driving down emissions in ouroperations and supply chain.

1.63
3.30

1.44
3.35

0.76
3.24

SDG CONTRIBUTIONS* Restated due to acquisitions, divestures, emissions factor
restatements and adjusted scope.

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Background

Scope 3 emissions: Nestlé’s Forest Positive strategy andRegenerative Agriculture Framework.

Climate change is no longer a future concern. It isalready here. In 2022, much of the northern hemisphere
experienced extreme heat, drought and wildfires.
Hurricanes battered North America and the Caribbean.
Devastating flooding hit Nigeria and Pakistan and Asia wasaffected by heavy typhoons. Meanwhile, data from NASAshows that global temperatures have increased by up to
1.01°C since pre-industrial times. What is less well known
perhaps – sea levels are over 10cm higher than in 1993,
the ocean is more than three times as hot as it was in 1980
and arctic sea ice has shrunk by an average of 12.6% every
decade since 1979.

Alongside the focus on Scope 3, we are working tosystematically reduce emissions in Scopes 1 and 2, byreducing the carbon footprint of our factories and fleet cars.

Approach
In 2020, we launched our Net Zero Roadmap, a Science
Based Targets initiative (SBTi)-aligned plan to reduce
Nestlé’s emissions. It has enabled us to put peak carbon
emissions behind us and make progress toward ourgreenhouse gas (GHG) emissions reduction targets for 2025
(20% reduction) and 2030 (50% reduction).
Because climate intersects every part of our company, it
forms one of the five workstreams of our ESG Strategy and
Deployment Unit.
A detailed analysis of our GHG emissions, carried out whensetting our 2018 baseline, showed that 95% of our footprint
was made up of Scope 3 emissions from activities in our
supply chain such as farming and land use, and just 5%
was Scope 1 and 2 emissions from our own operations.
Dairy and livestock ingredients are our largest single sourceof emissions – dairy alone accounts for one-third of our
total emissions.
To make progress toward our net zero commitment, we
focus primarily on our upstream supply chain including ourdairy and livestock sourcing. We have developed two main
strategic approaches upstream that will help tackle ourTable of contents

Climate-smart
sourcing

This allows us to recognize and reward the moreprogressive farmers that have already made the necessarytransition. At the same time, we recognize the hugechallenge farmers in country B face and continue to provide
technical and financial support to bring their methods up
to where our industry needs them to be. It’s a two-foldapproach – a fair reward mechanism and a just transition –that underpins how much volume we shift and to where.

Harder in practice

Benjamin Ware
Head of Climate Change andSustainable Sourcing

Food system topics such as land-use change, agricultural
production, packaging and waste management are linked
to up to one-third of global greenhouse gas emissions. At
the same time, the effects of climate change have alreadybegun to impact food systems. Altered weather patterns
are affecting growing seasons and making crop yields lesspredictable, while increases in extreme weather such as
droughts and floods are threatening food security.
We must continue to act to help avoid the worst potential
climate scenarios and protect vulnerable communities,
including those whose livelihoods depend on agriculture.

Nestlé viewpoint

How shifts in sourcing can reduce ourcarbon footprint.
Production of Brominata™,
a red seaweed-based
feed supplement withpotential to decrease
enteric methane production
by ruminants.

Innovation to tackle
farm emissions
When dairy cows digest their feed they produce methane,
which has a far greater global warming potential thanCO2. So-called “enteric fermentation” is the largest sourceof emissions in fresh milk production, followed by feed
production and manure.
Working with external partners, we are exploring the useof novel feed supplements, wearable devices, improved
nutrition and immunological approaches that decrease
enteric methane production, but do not negatively impact
the yield of nutritious and safe milk or animal welfare andhealth. For example, in the United States, we are facilitating
research to assess the efficacy and the human, animal andenvironmental health and safety aspects of a seaweedbased feed supplement, which has the potential to reduce
enteric methane emissions significantly.
In parallel, we are looking at scientific approaches toreduce emissions related to manure management andfeed production. We test and validate these innovativetechnologies in our research farm network prior to rollingthem out in our supply chains. For example, in the UnitedStates, we are rolling out vermicomposting, which uses
worms to naturally degrade manure with lower methane
production – replacing the need to capture and store thegas. The worms also remove up to 99% of wastewatercontaminants and generate castings that can be used as
fertilizer to improve soil health. This practice targets one of
the largest sources of emissions on many dairy farms.

Around the world farmers are at different stages of thetransition toward regenerative agriculture practices. One
way we can reduce our footprint is by switching morevolumes to suppliers, cooperatives and farmers in countriesof origin that already have regenerative agriculture practices
in place – while helping farmers in other regions to makethe shift as well, supporting a just transition.
The bulk of our carbon footprint is already present when
we purchase raw materials such as dairy, coffee, cocoa,
palm oil and meat. Packaging and shipping are muchless significant – only a fraction of the carbon footprintcompared with how the raw material is produced. Thismeans selecting ingredients produced using climate-smart
practices can make a significant difference, even if they areshipped from further away.

While that sounds simple in theory, in practice it’s notstraightforward. Our decisions need to be backed up by
accurate emissions data mapped at farm level. And while
we already collect and validate this with our suppliers fordairy, cocoa, coffee and palm oil, there’s still work to do.
Additionally, in many places, we have pre-agreed volumecommitments upon which people’s livelihoods depend.
Clearly, economic viability and security of supply still
factor in purchasing decisions. And let’s not forget taste –different regions often grow different varieties of a crop that
can taste slightly different and impact recipes.
Despite these challenges, shifting sourcing in this way isalready underway, as exemplified by the total volume of ourcommodities now coming from assessed deforestation-freeverified origins or certified as sustainably produced. Thisaccounts for 25% of the Scope 3 emissions saved throughimplementation of our Net Zero Roadmap.
For more information on climate-related risks andopportunities, see our Climate Risk and Impact report.

A reward mechanism

Let’s take coffee beans as a hypothetical example. Imagine
that well-established farmers in country A are alreadypracticing agroforestry, such as intercropping trees fortimber with coffee trees and employing smart irrigation
techniques. Meanwhile, farmers in country B have focusedon amplifying monoculture-intensive coffee production but
have not yet embraced sustainable measures.
If the carbon data show that a unit of coffee from country A
has a carbon footprint of 3kg, while the same amount fromcountry B has a carbon footprint of 5kg, then by shifting
bigger volumes to country A, we can notably reduce ourcarbon footprint.
Sourcing from locations already implementing practices suchas agroforestry can reduce our carbon footprint.

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Scope 1 and 2 emissions

All of our Scope 1 and 2 emissions are being addressed aspart of our Net Zero Roadmap, and our actions contributeto our absolute emissions reductions.

Performance
In 2022, our GHG emissions remained decoupled frombusiness growth, as we again achieved higher revenues
and lower absolute emissions. Our total absolute Scope 1,
2 and 3 GHG emissions reduced from 120.6 million* in 2021
to 112.9 million in 2022.
As per our SBTi approved roadmap, our in-scope
emissions have now reduced by 6.4 million tonnes to93.3 million tonnes compared with a projected businessas-usual scenario of 99.7 million tonnes. In addition, actual
emissions of 93.3 million tonnes have fallen below our2018 baseline of 94.3 million tonnes for the first time since
introducing our Net Zero Roadmap, despite revenue growthover the same four-year period. Emissions reductions are
the result of a wide range of projects in our agricultural
supply chains, as well as in our factories. All reductions
associated with a project meet the accounting principles set
out in the GHG Protocol Corporate and Project standards.
We are proud of our progress but know there is more to do
to reduce our absolute emissions on our way to net zeroby 2050 at the latest. We are still adapting our approachin response to what we learn. Many of our emissions
reduction projects will take time to implement but weremain confident they will yield results to keep us on track.
In addition to these emissions reduction projects,
we secured 4.3 million tonnes of CO2e removals byimplementing nature-based solutions that transfer
CO2e from the atmosphere into carbon stores. Our net
zero commitment does not rely on offsetting. These
removals take place within our supply chains and thelandscapes where we source our raw materials, and help
restore forests, wetlands and peatlands, or improve land
management. Secured removals are the total carbon thatwill be captured and stored (e.g. in trees or soils) over the20- or 30-year lifetime of a project. Every year, we will track
the actual carbon removal and storage across our value
chain in the reporting period (known as delivered removals
or ex-post carbon accounting). These removals will bereported as progress in line with the SBTi FLAG guidance(released November 2022).

Table of contents

The Nestlé Waters“glass train”,
to return Vittel
and S.Pellegrino
bottles, marks a
new step toward
more sustainabletransport.

We continued to make progress toward our commitment tosource 100% renewable electricity across our sites globallyby 2025, reaching 78.4% renewable electricity sourced
in our manufacturing sites in 2022 (2021: 63.7%). Our
factories in Australia, India, Indonesia, New Zealand, South
Africa, Thailand and Vietnam increased their purchasesof renewable electricity this year. In Europe, 93% of ourfactories were running on 100% renewable electricity. The
majority of the renewable electricity we use is generated
offsite by third-party suppliers. In addition to the 78.4%
of renewable electricity sourced, we currently have onsite
generation at nine factories in Europe and the Middle East,and this may expand in the future.
In North America, Nestlé completed its second large-scalesolar energy farm investment. Combined, the solar energy
farms will represent nearly 50% of Nestlé’s electricity in
the United States, thereby halving its Scope 2 greenhousegas emissions.

6.4

Million tonnes ofCO2e reductions
compared withbusiness-asusual scenario

4.3

Million tonnes ofCO2e removals
secured in 2022

Some factories are also switching to renewable sourcesof thermal energy. In Indonesia, one factory has switchedfrom fossil fuels to locally supplied rice-husk-based biofuel.
A second factory is expected to complete the switch in2023. We have introduced industrial heat pumps replacing
the use of fossil fuels in La Penilla, Spain, saving 2000
tonnes of CO2e, per year, and in Konolfingen and Orbein Switzerland, saving 1000 tonnes of CO2e per year. Our
Nestlé Waters facility in Henniez, Switzerland, works with athird-party biogas plant, which collects manure, Nespresso

coffee grounds (from capsule recycling) and other locally
produced industrial organic waste to convert into renewableenergy. The electricity produced is injected into the Swissgrid, while part of the heat is valorized at the Henniez
factory. The bottling site used 74% of renewable energy in2022. A liquid by-product of the process serves as a highly
efficient and odorless organic fertilizer and is recovered andused by the contributing farmers.
As part of our Net Zero Roadmap, we committed toswitching our global car fleet to lower emissions options by2022. At the end of the year, 41% of our fleet had switched
to lower-emissions options. We compensated emissions
from the remaining 59% that we could not switch, mainly
as a result of a lack of available vehicles and infrastructure
in some markets. We will seek to increase the proportionof lower-emission vehicles in our fleet as availability andinfrastructure improves.
As part of our ongoing Green Fleet Project, the shift toelectric, biofuel, hybrid or plug-in hybrid vehicles continued
in 2022, with our Green Fleet increasing from 27.2% in 2021
to 41.0% of our entire corporate fleet. Meanwhile, we rolled
out electric trucks in Germany, Italy, Spain, Sweden and
Switzerland, along with hydrogen trucks in Switzerland.
Energy consumption
2020

2021

2022

Energy consumption(Gigajoules)

81 385 568

82 779 476

80 131 120

Energy consumed that isrenewable energy (%)

23.1

25.3

30.6

Energy consumed that was
12.2
supplied from grid electricity (%)

10.2

6.0

10.7

Million tonnes ofCO2e reductions
achieved comparedwith a business-asusual scenario, andremovals secured
in 2022* Restated due toacquisitions, divestures,emissions factor
restatements andadjusted scope.

Nestlé’s large-scalesolar energy investments
will provide nearly half
our electricity in the
United States.

Dairy is our largest
single source of Scope 3
emissions – something weare hoping to tackle withpilot farms.

41.0%

Global fleet switched
to lower-emission
options (27.2% in
2021, 17.6% in 2020)

Scope 3 emissions

In line with SBTi guidance, our total reported Scope 3
emissions include some categories that are not currently
covered by our SBTi-aligned GHG emissions reduction
target. These emissions accounted for less than 33% of
Scope 3 emissions in the 2018 baseline. These include
consumer use of sold products, purchased services, leased
assets, capital goods and investments. As a result, our total
Scope 3 emissions reported for 2022 (108.9 million tonnes)
are higher than the Scope 3 emissions that fall within our
SBTi-aligned target (89.3 million tonnes).
Dairy ingredients are our single largest source of Scope 3
emissions. We are working with leading universities andNGOs to support net zero efforts in dairy farming aroundthe world (see the Making swiss dairy a climate star casestudy). This includes investing in at least 25 pilot farms in
15 countries to test scalable, low-carbon and regenerative
agriculture practices that may help those farms achieve net
zero GHG emissions.
Currently, we have one pilot farm in South Africa that aims
to achieve net zero in the near future, and another in the
United States aiming for net zero by 2025. Twenty-threeother pilot farms are investigating exciting possibilities
to support net zero efforts. In Spain, we are engaging
with more than 200 dairy farmers to implement emission
reduction practices, which are aimed at reducing theirfootprint by 40% by 2026. In the UK, since 2015 we haveworked with more than 70 farmers to plant more than
42 kilometers of hedgerows and protected more than
40 kilometers of rivers and streams.

Creating Shared Value and Sustainability Report 2022

12

We use the Cool Farm Tool – an external online GHG, waterand biodiversity calculator to help companies calculate theenvironmental footprint of their agricultural raw materials –for key ingredients including dairy. The tool, already being
used to capture primary data in Brazil and Colombia, has
now been rolled out to seven new origins.

Food loss and waste

We also continued our work to lower carbon emissions
associated with our logistics:– Nestlé is investing over CHF 100 million by 2030 in lowcarbon logistics for our three international water brands:
S. Pellegrino, Acqua Panna and Perrier.
– In France, Nestlé Waters launched new rail routes for
Perrier, saving an estimated 11 400 tonnes of CO2e per
year by the end of 2022. The business is also working
with partners to roll out a hydrogen-powered train routein France by 2025. This route will help reduce CO2e by an
estimated 10 000 tonnes per year – a reduction of 89% of
its current emissions.
– Nestlé UK & Ireland designed, built and tested new
curtain-sided rail containers with several partners. The
containers have a raisable roof and can transport doublestacked palletized products by rail. According to Network
Rail, each freight train takes up to 76 heavy goods
vehicles off the roads.
– Together with its logistics and fuel suppliers, Nestlé
Waters is scaling up the use of biofuels, including bioLNG (liquefied natural gas made from processed organic
waste) in trucks and other types of biofuels in ocean
freight logistics to North America. Nestlé UK & Irelandswitched 73% of its owned fleet of trucks from diesel tobio-LNG. Partners of Nestlé Waters in Italy and Germany
have also started incorporating this technology in theirlogistic operations.
– In Germany, work on a new distribution center is underway. The aim is for the center to achieve platinum
certification from the German Sustainable Building
Council. The plan is to reduce both our freight mileage
and CO2 footprint from logistics by around 30% per year.

In 2022, we joined an industry-wide pledge in partnershipwith the Swiss authorities to halve food loss and waste
by 2030. We also became a Waste Warrior Brand to help
prevent food loss and waste at a consumer level. In the UK,
together with major UK supermarkets and organizations,
we signed similar world-leading government pledges tohelp halve food waste by 2030. We make use of agriculturalside streams (e.g. in Nescafé Nativ Cascara), recover foodwaste in factories to use as biofuel and work with farmers
and consumers to minimize waste.

Food loss and waste are unacceptable, though difficult
to tackle in practice. They accounted for around 670 000
tonnes of CO2e in our 2018 baseline study. While this is avery low proportion of our total emissions, we aim to reducefood loss and waste at every stage of our value chain.

Product portfolio and packaging

Our recipe decisions for new and established products
are based on GHG emissions-reducing potential as wellas nutrition, taste and cost. In 2022, Garden Gourmet
received the Solar Impulse Efficient Solution Label, marking
it as a solution that is good for people, the environmentand business.
The Nestlé Professional Future Cup initiative launched acustomer-facing lifecycle assessment tool that helps oursales reps improve transparency to customers, allowing themto make more informed sustainable purchasing choices.

Video: Road torail logistics

Along with several partners,
Nestlé UK & Irelanddeveloped curtain-sided rail
containers with a raisable
roof – taking 76 HGVs off
the road per train.

In China, we are collaborating with several large retailers.
For example, in a collaboration with Alibaba and 18 otherconsumer goods companies, Nestlé is promoting the
Decarbonization-Friendly Actions program in an effort toincrease carbon reduction actions across the industry.
Nestlé is one of the most active companies by providing 26
lower-carbon products in the food and beverage categoryon the Alibaba platform.
In Poland, Nestlé engaged and educated consumers onfood waste by focusing a television commercial of one of
the biggest culinary brands in the country – Winiary.

Nestlé is expanding its
range of plant-based
choices. Pictured here:
Garden Gourmet’s newplant-based Vuna.

Total weight of waste generated in Nestlé factories in
2022 and a breakdown of this total by composition of
the waste(metric tonnes)
Waste
composition

Hazardous
waste generated

Non-hazardous
waste generated

Total

Biomass

839

1 973 909

1 974 748

Mixed waste

33 067926 422959 489

Total

33 9062 900 331

2 934 237

Advocacy

Throughout 2022, we continued to advocate for ambitious
government policies and private sector leadership to
encourage all sectors to move quickly toward rapid andsustained emissions reductions. Examples include:– Working with the World Business Council for Sustainable
Development on corporate climate action and furthering
discussions around issues such as nature and plastics at
Climate Week NYC 2022.
– Advocating for the inclusion of food systems at COP27,
alongside a range of stakeholders and other companies.
We hosted discussions in Sharm El Sheikh on topics
such as ensuring a just transition in food and agriculture
and encouraging a new generation of farmers into
the profession.
– Publicly supporting the Business for Nature campaign for
mandatory disclosure of impacts and dependencies on
biodiversity by large companies and financial institutions
at the CBD COP15 negotiations in Montreal in December.
We are an active member of the Taskforce on Naturerelated Financial Disclosures working group, which is aimed
at advancing the collective understanding of how to reporton double-materiality risks and dependencies related to thenatural environment. This complements our membershipof the Corporate Engagement Program run by the Science
Based Targets Network.
We have taken steps to enhance transparency on our
advocacy and lobbying activities, such as publishing our2022 Climate Advocacy Report.

Food waste is an issue wetake seriously. For example,
spent coffee grounds areburned and used as biogas
at our Henniez bottled
water plant.

The development of environmental footprint labelingschemes in Europe gained significant momentum in 2022.
Nestlé is closely following the main initiatives to help push
for a harmonized European system. Our actions include:– France: pilot testing some Nestlé products against EcoScore and Planet-Score– Belgium: closely monitoring the roll out of Eco-Score on
products for retailer Colruyt– UK: a nine-month R&D partnership with Foundation Earthhas helped develop a UK methodology for measuring
carbon, water usage, eutrophication and biodiversity loss
from farm to shelf for 12 Nestlé products. An EU ProductEnvironmental Footprint methodology (covering farm tofork) is underway.

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13

Making Swiss dairy
a climate star

Outlook
We will continue working hard to reduce GHG emissions
across our operations and value chain. We aim to accelerate
Scope 3 emissions reductions by focusing on actions
at the farm level. Actions will include the scaling up ofregenerative agriculture practices and the implementationof our Forest Positive strategy.
Helping farmers in higher-carbon origins to improve theirpractices will be a priority as we begin sourcing higher
volumes from origins with lower-carbon footprints.
Additionally, we will seek further opportunities to reduce
emissions from our vehicle fleet and third-party logistics,
and to source more renewable electricity in our operations.
We will continue our wide-ranging engagement work withgovernments and international organizations, particularly
on reducing deforestation risk and protecting nature. Oneof our advocacy objectives for 2023 is to encourage theplacement of regenerative food systems at the heart ofnational climate plans and for this to be a central focus for
COP28 negotiators in the United Arab Emirates.

A partnership to lower emissionsin Switzerland.
Dairy and livestock are the single largest
source of Nestlé emissions; reducing
them is essential for achieving our overall
climate ambitions.
Rolling out Nestlé-brandedhydrogen-fueled trucks in
Switzerland.

Around the world, we are seeking ways tomake a difference in each local context. Fromlooking at how cows are fed and how manure
is managed, to using silvopasture, cover crops
and renewable energy production – no stone isbeing left unturned.
No two local contexts are the same – but manyof the lessons are transferable. This is one of
the reasons we are so excited by our KlimaStaR
project in Switzerland. Partnering with anotherof the country’s leading dairy processors,
Emmi, along with the ZMP and aaremilchcooperatives, we have pulled together acoalition that includes local government,
the AgroCleanTech platform and two Swiss
universities (ETH Zürich and the Universityof Applied Sciences for Agricultural, Forest
and Food Sciences). Our aim is to reduce
emissions in Swiss dairy and improve scientificunderstanding of the processes involved.

Thousands of tonnes ofemissions reductions

Together, we hope to reduce GHG emissions
on up to 300 participating farms by 20%
by 2027 – a GHG reduction of 15 000
tonnes of CO2e. Our four priority areas
are optimal feeding, animal longevity,
manure management and energy use. Eachparticipating dairy farm will be offered tailormade solutions for reducing their carbon
footprint. Actions will include improving
feeding, herd management, energy usage,
and fertilizer usage. We also hope to reduce
competition between animal feed and fooddesigned for human consumption by 20%.
Actions in this area will include improving
meadow fodder quality, cross-farm trade inmeadow fodder and land exchange.

The project will also include a practical
exploration of the conflicting goals ofgrassland-based, site-adapted and climatefriendly milk production. We also want to test
the use of simple, measurable GHG indicatorsand better understand the relationshipbetween GHG reduction measures and feedfood competition.
The lessons learned can then be sharedinternally and with our partners to help us all
replicate the results in other farms. We believe
this project can only help our other efforts
around the world to become more effective.

Advanced technology
can optimize operations
and energy usage on
Swiss farms.

Rudolf Bigler’s dairy
farm in Mooseedorf,
Switzerland – part of apartnership to lower dairy
emissions in the country.

The Swiss Federal Office of Agriculture is
supporting the project, with GHG emissions indairy among the country’s largest areas after
mobility, heating and power.

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14

Looking at thewhole landscape

100% ASSESSED DEFORESTATION-FREE BY 2022

100% PALM OIL ASSESSED DEFORESTATION-FREE BY 2022

4% Unknown

99.1%
assessed deforestationfree in our primary
supply chains*
4.1 million tonnes

1% Unknown
21.5% Assessedfrom the sky
15.1% Assessedon the ground
63.4% Traceable
to non-very-highrisk origins

95.6% of palm
oil assessed as
deforestation-free
445 kilotonnes

89% Assessedfrom the sky
6% Assessedon the ground
1% Traceable
to non-very-highrisk origin

100% PULP AND PAPER ASSESSED DEFORESTATION-FREE BY 2022

0.1% Unknown
99.9% of pulp andpaper assessed as
deforestation-free
1165 kilotonnes

0.3% Assessedon the ground
99.6% Traceable
to non-very-highrisk origins* For meat, palm oil, pulp and paper,soy and sugar
100% MEAT ASSESSED DEFORESTATION-FREE BY 2022

100% SOY ASSESSED DEFORESTATION-FREE BY 2022

100% SUGAR ASSESSED DEFORESTATION-FREE BY 2022

1% Unknown
1% Unknown
99.9% of meatassessed as
deforestation-free

0.1% Unknown
99.9% Traceable
to non-very-highrisk origins

157 kilotonnes

99.3% of soyassessed as
deforestation-free
509 kilotonnes

12% Assessedfrom the ground
87% Traceable
to non-very-highrisk origins

99.3% of sugar
assessed as
deforestation-free
1804 kilotonnes

26% Assessedfrom the sky
29% Assessedon the ground
44% Traceable
to non-very-highrisk origins

TREES SECURED FOR PLANTING

Aim to grow 200 million trees by 2030 in
our supply chain and sourcing landscapesConserving and restoring natural habitats
within our supply chains is essential. But
it’s only the start. We are looking beyond
the farm level to help positively transform
whole landscapes.

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Cumulative number of trees secured for planting

24.6m

2021

2022

Trees secured for planting within the year

12.4m

2030

37.0m

200m

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Approach
Our landscape work is most visible in our
Forest Positive strategy and water initiatives by
our Nestlé Waters business.
The conservation and restoration of forests form an
important part of our Net Zero Roadmap. Launched
in June 2021, our Forest Positive strategy builds on a
decade of work to end deforestation in our supply chains.
It recognizes the need to collectively move from managing
risk to genuinely focusing on how we can achieve a positive
impact in the critical landscapes that underpin the foodsystems in which we are important actors. An external
advisory council of independent experts advises us on
the implementation of our strategy.
Our approach has three pillars:

Deforestation-free supply chains

In 2010, Nestlé committed to achieving and maintaining
deforestation-free primary supply chains. We aimed toachieve this:– By 2022 for meat, palm oil, pulp and paper, soy and sugar
primary supply chains– By 2025 for coffee and cocoa

Background
Forests absorb approximately 2.6 billion tonnes of carbon
dioxide every year. This is the equivalent to one thirdof the CO2 released from burning fossil fuels. As home
to 80% of land-based species, forests are also critical
for the preservation of biodiversity and provide nutrition,
shelter, energy, medicine and livelihoods for around
1.6 billion people.
As the global population grows, and demand for food alongwith it, remaining forests and other natural ecosystems are
at risk of being converted into farmland. Forests are also at
increased risk of wildfires.
Efforts are being made to protect the forestland thatremains. Provisionally agreed legislative requirements on
deforestation-free products, updated by the European
Commission in 2022, seek to increase the list ofcommodities that must prove their deforestation-freestatus, with increased protections for indigenous rights.
At Nestlé, we believe that a forest positive future depends
on a broad approach that includes assessing deforestation
risks, conserving and restoring forests, respecting
community and land rights, and investing in sustainableproduction landscapes. We cannot achieve our net zerotargets without a forest positive approach.

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A farmer in Costa
Rica inspects anagroforestry projecton his land.

Our Responsible Sourcing Standard is the tool that we
use to manage this. Our objective is to ensure that the raw
materials we buy do not originate from:– Areas converted from High Carbon Stock forests– Areas converted from natural ecosystems such as
wetlands or savannas– Conversion of peatlands of any depth, except wherefarming practices protect peat
– International Union for Conservation of Nature protectedareas categories I-IV
– UNESCO World Heritage Sites and wetlands on the
Ramsar List

Long-term forest conservation and restoration

Our Global Reforestation Program (GRP) is aimed at helping
to conserve and restore land and natural ecosystems in our
supply chain and sourcing landscapes, while respecting therights of Indigenous Peoples and Local Communities andpromoting sustainable livelihoods. The selected projects
are designed to have positive long-term impacts on people,
nature and the climate. We aim to grow 200 million trees
by 2030.

Sustainable landscapes

Forest conservation and restoration is about much morethan keeping trees standing and natural ecosystems intact.
It is about reshaping incentives and how people behave
to help protect the forests for the long term. We areengaging with key partners and Indigenous Peoples andLocal Communities at a landscape level to identify projects
that can have a positive impact at a scale we could notachieve alone. Our actions include rewarding suppliers forpractices that keep trees standing, helping to regenerate
the land and respecting human rights. Our aim is to support
15 sustainable landscape initiatives by 2023.

Global Reforestation Program

Our Global Reforestation Program aims to grow 200 million trees by 2030 in our sourcing landscapes to create apositive long-term impact on people, nature and the climate. Projects will help restore natural forest landscapes,
introduce agroforestry systems for suitable crops and support other natural ecosystem restoration activities.

Phase 1:
Steps of initialinvestigation

Phase 2:Elements assessedin pre-feasibility
study

Phase 3:
Process to activatea project

Phase 1

Phase 2Phase 3Phase 4Phase 5Investigation

Pre-feasibility
study

Project
activation

Implementationand monitoring

Lifetimemonitoring– Map Nestlé’ssourcing locations– Conduct investigationand scoping– Identify project
opportunities in acountry or region
meeting project criteria– Conduct due-diligencescreening for carbonclaims challenges andopportunities related
to local context– Eligible locations– Scale ofreforestation potential– Carbon sequestration
potential– Indicative project costs– Risks– Environmental andsocial co-benefit
opportunities– Applicable carbon
accounting
methodologies– Develop project
design document andmonitoring plan, to
include:– Detailed project plan
– Timelines– Costs– Carbon calculations– Sign contract andscope of work
– Allocate funding– Activate partners andlocal partnerships

Phase 4:
Actions to
implement
and monitor– Grow seedlings innurseries– Plant trees– Conduct short- andlong-term monitoringof trees planted,
carbon sequesteredand other co-benefit
outcomes

Phase 5:
Project lifetime
monitoring– Conduct long-termmonitoring of trees
planted, carbon
sequestered and otherco-benefits

We map our supply chains to know where the raw
materials that we buy come from. In at-risk origins, we takesteps to assess that our purchases are not contributing
to deforestation or the conversion of natural habitats.
The techniques we use include satellite mapping andmonitoring, on-the-ground assessments and certification.

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External viewpoint

Proof of concept

A marketplace
for nature-based
solutions
Tom Curtis
Founding Partner of 3Keel

A plan to put buyers and sellers ofsustainability services together.
Landscape Enterprise Networks – the LENs program – is amethodology for buying and selling nature-based solutions
that reduce risk to businesses, while improving the healthof a landscape.
LENs began as an extension of sustainable risk managementin general (i.e. how does soil loss, biodiversity, deforestationand human rights affect Nestlé’s business), with a specificfocus on the dairy farming landscape of a Nestlé factory in
Cumbria, north west England. Here, all the milk that is criticalfor production comes from within a 50 kilometer radius. We
quickly realized that if we understood the landscape risks thatmatter most to Nestlé, we could work out a clear businesscase for them to invest in and take care of that landscape.
But these risks weren’t unique to Nestlé. There wereother sectors with similar interests such as water utility
companies and local government, as well as othercompanies connected to agriculture. We realized thatwhile different businesses had different needs from thelandscape, those needs could be delivered by similar
sets of land management solutions. These businesses
could therefore co-invest and divide the costs between
them – increasing commercial efficiency dramatically. This
innovation was transformational in making the businesscase for nature-based solutions.

62

Farmers and land managers
funded to introduce
nature‑based measures inthe east of England pilot

Table of contents>10 000

Hectares of land covered in
the east of England pilot

A farmer in Côte d’Ivoire
harvests his cocoa – acrop that lends itself wellto both intercropping
and agroforestry.

From a single project in Cumbria, LENs expanded as
we put this principle into practice through multiple
initiatives across the UK and Europe. For example, LENs
was successfully established in the East of England, an
important area for sourcing wheat for cereals and pet food,in 2021. Here, Nestlé Purina PetCare and Nestlé Cereal
Partners UK are working with water companies and local
authorities, together funding over 62 farmers and land
managers to introduce nature-based measures across morethan 10 000 hectares of land.
LENs makes this possible by creating a place for buying
and selling nature-based solutions. LENs acts as a neutral
broker for transactions between investors and groups ofland managers, who can implement actions on the ground.
Essentially, we built a ‘trading community’.

3.1

Trades also represent a profit-making opportunity for land
managers and farmers, who can now sell nature-based
solutions in addition to their crops. Everything is local andorganized within the regional economy so that outcomes
make sense for the communities and ecosystems we
operate in.

Million tonnes
CO2e secured overa 20-year period
through tree-planting
projects initiated(9.3m in 2021)

Popular measures in the east of England LENs included
planting cover crops, which are intended to protect water
quality and reduce soil erosion; reducing cultivation to
improve soil health, and planting hedgerows. It’s a winwin for everyone: food and pet food are produced withless negative impact, while helping to halt the decline inbiodiversity and regenerate the areas we live in and enjoy.
The success of the program means that LENs will continue
to scale up, both in the UK and globally. Projects are alreadyunderway in Italy, Hungary and Poland. We are excitedby the potential of the model for securing the future of
the landscapes that we, our business partners and ourcommunities depend on.

Performance
The publication of our Human Rights Salient Issue Action
Plan on Indigenous Peoples and Local Communities’ Land
Rights in Q1 2023 is a major milestone. Indigenous rights
are an important consideration in all three pillars of ourForest Positive strategy and this action plan helps reinforce
our Forest Positive activities.

Deforestation-free supply chains
One of our first LENs
landscape projects wasin East Anglia, England.

By the end of 2022, 99.1% of our primary supply chainsfor meat, palm oil, pulp and paper, soy and sugar wereassessed as deforestation-free. Our palm oil supply chain
presents the greatest opportunity to improve, with 95.6%
assessed as deforestation-free.
From experience, we know that the last percentage points
are the hardest to reach, due to the volume sourced
from thousands of smallholders who require customized
technical assistance at a local level.

Long-term forest conservation and restoration in
our supply chains
In 2022, as part of our ongoing Global Reforestation
Program (GRP), we began work to plant 10 million trees inAustralia by 2025 (see the Reforestation in Australia casestudy) as well as launching new projects in China, Ghana
and Thailand leading up to 12.4 million trees. Overall,

we secured 3.1 million tonnes of CO2e removals throughnature-based solutions in 2022. Secured removals arefrom projects that were contracted in 2022 but had notnecessarily been implemented by the end of the year.
In Colombia, a GRP project delivered more than 310 000
trees. Ultimately, it aims to plant 7.5 million trees in andaround farmers’ coffee fields.
In Nicaragua, an ongoing GRP project from 2021 (within
the Nescafé and dairy supply chains) reached its 2022 goalof planting one million trees, as part of a 20-year project toplant 8.6 million trees in total. The project has an estimatedcarbon capture potential of 1.9 million tonnes of CO2e over
20 years. It is expected to improve biodiversity and forest
connectivity, as well as protecting water sheds and creating
additional income for participating farmers.
Similarly, an ongoing GRP project in Honduras (within the
Nescafé supply chain) reached over 500 000 trees plantedby the end of the year. This is part of a 20-year project,
aimed at planting 5 million trees over the course of the firstsix years. The trees will be used as shade trees on coffee
farms and for restoring forests in protected areas.
Through the Nestlé Cocoa Plan, we distributed 1.47 million
forest and fruit trees globally.

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Sustainable landscapes

In line with our ambition to support 15 sustainable
landscape initiatives by 2023, we now have active
landscape projects in Brazil, Chile, Côte d’Ivoire, Indonesia,
Malaysia, Mexico, Peru and Russia.
In 2022, our palm oil team mapped sourcing regions withthe greatest land rights risks against volumes of palm
oil sourced from those regions. This will improve ourunderstanding of land rights risks. The results are being
used to develop a strategy for identifying landscape-levelprojects that Nestlé can support and/or participate in, andcan be duplicated for other raw materials.
In Côte d’Ivoire, the Nestlé Cocoa Plan has been working
in collaboration with the Côte d’Ivoire Ministry of Water
and Forest and Earthworm Foundation to help protect
and restore the Cavally Forest Reserve. Activities include
working with farmers and supporting patrols of the forest to
remove illegal cocoa plantations within the natural reserve.
Work has also been undertaken in the wildlife corridors
of Beki and Bossemati forests near the Ghanaian border.
On a smaller scale, a 2021 pilot project working with thecommunity of Toa Zèo village to protect around 30 hectaresof local and sacred forestland was so successful that in
2022, the model was replicated in other villages. We believe
the model of working at a small scale has the potential
to be rolled out to other communities in the country, andcollectively to make a large impact.

Outlook
We remain focused on achieving our deforestation-freecommitment, including progressing toward having our
cocoa and coffee supply chains assessed as deforestationfree by 2025.
We will also begin to operationalize our Salient Issue Action
Plan on Indigenous Peoples and Local Communities’ land
rights, which was published in Q1 2023.
We will continue to collaborate and promote best practices
through external initiatives including the Consumer
Goods Forum Forest Positive Coalition, the Cocoa andForest Initiative and the Tropical Forest Alliance. We will
also continue to advocate for greater transparency andmore collective action from companies, governments andcivil society.

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Reforestationin Australia
Nestlé has made the ambitious
pledge to plant 10 million trees
in Australia by 2025.

“Our partnership with
Greening Australia andOne Tree Planted is designed
so that the 10 million trees
we plant in Australia will bemaintained and cared for
until they reach maturity,delivering tangible longterm environmental andeconomic benefits.”
Sandra Martínez
CEO, Nestlé Oceania

The project is part of the Nestlé Global
Reforestation Program, which aims to plant andgrow 200 million trees globally by 2030 in theregions we source from, helping to secure ourpath to net-zero emissions by 2050.
In Australia, the trees will be planted inlocations linked to agricultural areas whereNestlé sources raw materials. Working
hand in hand with local landholders andcommunities, the trees will help conserve local
biodiversity, improve water quality and restore
degraded soils.

Saplings of indigenous
Australian trees areprepared for planting.

Unique challengeWith over 132 million hectares of unique andvaried native forests, Australia has the seventh
largest forest area in the world, making up
3% of the world’s forests. However, Australia
is also highly vulnerable to the effects ofclimate change, having already experienced
a rise in average temperatures and long-termchanges in rainfall, as well as more intenseand damaging storms, longer fire seasons andmore extreme weather.
The 10 million trees – a mix of native plant
species – will sequester an estimated 2.1
million tonnes of CO2e over a 25-year carbon
crediting period. In fact, averaged over the
project lifetime, this is equivalent to fuelemissions from more than 25 000 cars eachyear, according to Australian government
numbers. The project kicked off at the tail endof the 2022 planting season, with over 200 000
trees planted across almost 100 hectares in
New South Wales and Victoria.

Around 65 different species were selected,
including the Eucalyptus Strzelecki, an
indigenous plant that is nationally vulnerable
to extinction, the Allocasuarina littoralis, a
key food source for the Yellow-tailed Black
Cockatoo and the Leptospermum lanigerus,
commonly known as the “Woolly Tea-tree”, aspecies that attracts pollinators.

Restoring diverse landscapes

To ensure the project is correctly managed
and monitored, Nestlé is partnering with
One Tree Planted, Greening Australia andCanopy. These organizations are committed
to restoring Australia’s diverse landscapes andprotecting biodiversity in ways that benefit
communities, economies and nature. They
will ensure that the trees are monitored across
28 years as they mature, delivering long-term
environmental and economic benefits.

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More regenerative
practices on farms
BackgroundThe 20th century saw extraordinary population andeconomic growth, enabled by an evolution in agriculture.
This delivered affordable food to many, but also contributed
to an over-exploitation of natural resources and, at times,
led to negative social impacts.
We need an agricultural system that sustains and improves
the use of resources. Climate and nature-smart agriculture –or regenerative agriculture – will increasingly form the basis
for success in achieving this.

REGENERATIVE AGRICULTURE

Progress toward 50% of key ingredients throughregenerative agriculture methods by 2030*
6.8%
in 202220%
by 202550%
by 2030

The food systems of which we are a part have delivered
great benefits to the world and withstood great shocks –not least in recent years. But the multiple threats of climatechange, unprecedented biodiversity loss, social inequality
and risks to human rights, to name but a few, demand a
fresh approach.

6.8%

Key ingredients sourced
through regenerative
agriculture methods

Currently, there is no detailed, standard definition ofregenerative agriculture – although many organizations
are working on one. However, the general principles andpractices of regenerative agriculture are aimed at improving
soil health and fertility, protecting water resources andsafeguarding biodiversity.
Restoring soil health can also help capture increased levelsof carbon in soils and plant biomass. Healthier soils are
more resilient to the impacts of climate change and may
increase yields, helping to improve farmers’ livelihoods inthe long term.

Regenerative agriculture has the potential
to play a critical role in improving soil
health, sequestering carbon, supportingfood security, restoring water cycles
and biodiversity. This is why we areinvesting in it.
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For Nestlé, sourcing 20% of our key ingredients fromregenerative agriculture methods by 2025 and 50% by
2030 will be important for us to achieve the goals in our Net
Zero Roadmap.

* In 2022, only the following sources are included in regenerative agriculture volumes:
fresh milk, Ecuadorian cocoa, green coffee and Libby’s vegetables sourced through direct
procurement/Farmer Connect or for Nespresso, Nestlé Nutrition cereals and vegetables thatare traceable back to a farm/cooperative level and raw materials that are covered by the Living
Soils initiative with Earthworm Foundation for Nestlé France. The denominator includes all raw
materials in scope.
See our Reporting Scope and Methodology for ESG KPIs document for full details.

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Nestlé is providing financial
and other support tohelp farmers switch toregenerative agriculture.

External viewpoint

The human side ofregenerative agriculture
Kealy Sloan
Sustainable Food Lab Program
Manager, Agriculture & Development

Approach
We aim to source 20% of our key ingredients throughregenerative agriculture methods by 2025 (and 50%
by 2030). In 2022, we launched the Nestlé Agriculture
Framework to better explain our approach to regenerative
agriculture. It defines the three key resources of any
agricultural system: soil, water, and biodiversity as the focus
of collective restoration efforts.

Nestlé’s regenerative agriculture model
Diverse cropping
systems and livestock
integration*

Collective andlandscape actions

Why companies need to support
a just transition.
Global trade can play a powerful role in alleviating poverty.
Companies that source raw materials from smallholder
farmers have an opportunity – and an obligation – toensure that their trading terms and sustainability programs
enable farmers to afford a decent standard of living, or a“living income”.
When we talk about living income, we’re talking about
more than farmer livelihoods. Farmers who can afford
a decent standard of living are better able to invest inregenerative agriculture and protect the environment. Thisin turn provides a more sustainable future for farming
and contributes to a healthier planet. The social and theenvironmental elements are intrinsically linked – to makeprogress in one, you must support both.

The framework includes key concepts from conservation
agriculture, sustainable intensification, climate-smart
farming, agroecology, low-input farming, precision farming
and others to create an approach that actively helps
improve and restore natural resources.
Farmers are at the center of our model. They are the ones
managing resources and making decisions on practices
depending on their specific individual circumstances.
Where introducing regenerative agriculture practices
generates initial risks or costs for smallholder farmers, we
may provide technical, collaborative or financial assistanceto support a just transition.

Ultimately, a company’s role is to provide an enabling
environment in which farming households can thrive.
This is with the understanding that farming households
are independent business people who make their own
decisions and engage in their own livelihood strategies.

Nestlé employs more than 700 sourcing specialists andmore than 5500 staff to help us purchase fresh ingredientsaround the world. Our teams work with farmers to mange
resources and identify the best agricultural practices foreach local context.

In our work with leading companies and brands suchas Nescafé, we’ve come to understand that it’s criticalfor companies to address the key drivers of income
improvement – price, productivity, efficiency, land size anddiversified income sources.

As part of our approach, we encourage industry alignment
on common frameworks and metrics for regenerative
agriculture. Notably, we are members of the SAI Platform,
which is one of several bodies working toward aregenerative agriculture definition.

There are three main areas of action for a company toconsider in relation to these key drivers to create anenvironment in which households can thrive.

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Soil health

Biodiversity* Whenever possible and relevant.

Water security
and quality

First – and arguably most important – is to ensure that theway the company does business supports farmers. By this,
we mean trading practices that provide a stable market
and de-risk farmers or ensure a good return on a farming
household’s investments. For example, through the use of
conditional cash transfers or incentives.
The second is to provide agronomic support that helps
farming households to improve productivity and efficiency,
which can be achieved via training programs and newmaterials. The third is to support farming households
to build better farm business management and support
diversified income generation.
The Nescafé brand and Nestlé more broadly have a long
history of working to improve farmer livelihoods and thehealth of the planet. The brand’s work with farmers has
continued to evolve over time, starting with agronomic
support and supplemented with business-skill building
through “agripreneurship” programs. With the new pilot
programs to test conditional cash incentives, the Nescafé
program is continuing its evolution, charting new frontiers
at the intersection of farmer livelihoods and regenerative
agriculture. We look forward to continuing our work with
Nescafé to calibrate program components and support
learning within Nescafé, across Nestlé and to the broader
sector. The work holds important potential for smallholder
farming households and the coffee industry at large, andwe are excited to be a part of the process.

Brands like Nescafé can support farming households to build better farmbusiness management and support diversified income generation.

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Outlook

In Brazil, Nestlé Ninho now recognizes different levels ofregenerative practices by paying tiered premiums on milk
prices. These practices reduced and removed 107 000
tonnes of CO2e in 2022 alone.

By 2025, Nestlé will invest CHF 1.2 billion to spark
regenerative agriculture across our supply chains. We
will continue to fund pilot projects and scale successful
initiatives. We will continue working toward a common
regenerative agriculture framework. We will also continue
to co-invest with farmers to help them transition toregenerative agriculture, as well as pay premiums forregenerative agriculture goods. Our brands and markets willseek to develop more opportunities to launch regenerative
agriculture activities around the world.

In Colombia, a CHF 1.6 million investment in a five-year
grassland regeneration project entered its second year.
Involving 38 farmers, a total of 390 hectares have beennaturally regenerated – by allowing woodland to grow next
to the pastureland. A total of 11 970 tonnes of CO2e havebeen sequestered.
In Chile, Nestlé Nido has been gradually replacing synthetic
fertilizers with biofertilizers in maize, pastures and othersupplementary crops. Biofertilizers offer many benefits
because of their free-living bacteria, which promote plant
growth, improve productivity through the strengtheningof root systems, lower production costs and mitigate
the emissions of greenhouse gases. In 2022, the project
reduced 4500 tonnes of CO2e.

Performance
In 2022, we sourced 6.8% of key ingredients fromfarmers transitioning to regenerative agriculture methods,
keeping us on track to achieve 20% by 2025 and 50% by2030. In 2022, only the following sources are included inregenerative agriculture volumes: fresh milk, Ecuadoriancocoa, green coffee and Libby’s vegetables sourced throughdirect procurement/Farmer Connect or for Nespresso, Nestlé
Nutrition cereals and vegetables that are traceable back toa farm/cooperative level and raw materials that are coveredby the Living Soils initiative with Earthworm Foundation for
Nestlé France. The denominator includes all raw materials
in scope. See our Reporting Scope and Methodology for
ESG KPIs document for full details.

In Colombia, 390 acresof natural woodland
have been regenerated.

419 228

Farmers trained
through Farmer
Connect (435 500
in 2021)

Enrique Vega
Dairy Strategy and Policy
Manager Nestlé Chile

The Nestlé Institute of Agricultural Sciences launched in
2022 to advance technology and research in the field.
In the north of France, Nestlé has been working with
farmers on regenerative agriculture methods since 2018.
Our work is part of the Sols Vivants (Living Soils) initiative,
involving partners such as Earthworm Foundation andsupermarket chain Lidl. Our Purina PetCare brand joined
the effort in 2020, where they are supporting the transition
to regenerative agriculture methods with a big effort onagroforestry. The initiative involves mainly wheat crops
but also corn, sugar beet and vegetables. Together, weare supporting farmers technically and financially tomake the transition to regenerative agriculture. By theend of 2022, we engaged 180 farmers and 10 suppliers
under the Sols Vivants initiative covering around 15 000
hectares in different regions, resulting in 72 000 tonnes ofraw materials.

Table of contents“We’re one of the first regions
to trial increased use of
biofertilization. This is a win-win
initiative: good for the planet andgood for farmers as it’s also morecost-effective than using synthetic
fertilizer on crops like maize.”

Video:
Living Soils initiative

In the United States, we are working with partners tomeasure the outcomes of regenerative practices usedby pumpkin farmers supplying Libby’s in central Illinois,covering more than 70 fields and over 6000 acres. The
project has collected in-field data such as tillage type,fertilizer usage, and soil sample data, to help verify andquantify the environmental benefits of the regenerative
practices used to grow our pumpkins. The data showedsignificant gains. Introducing sustainable, reduced tillage
practices saves soil from being lost to erosion as compared
to conventional crop tillage practices. With the help of covercrops, soil erosion rates are 40% lower than the averagefor the state. Cover crops have also helped farmers reduce
CO2e by 732 tonnes compared with conventional practices(equivalent to removing 157 cars from the road for a year).

A Nescafé agronomist
works with local coffee
growers in Indonesia.
A coffee plantationin Indonesia, where
the Nescafé Plan
2030 has begun
supporting regenerative
agriculture projects.

In China, we started a partnership with Syngenta Groupto build a regenerative agriculture demonstration farm.
This farm is a unique opportunity to promote regenerative
agriculture trials and offer training to farmers. It also has thepotential to support commercial cooperation in the supplyof low-carbon wheat, corn and other raw materials.
As part of the Nescafé Plan 2030 strategy (see the Uplifting
lives and livelihoods case study), we started supporting
regenerative agriculture practices for coffee farmers in
Brazil, China, Côte d’Ivoire, India, Indonesia, Mexico, thePhilippines, Thailand and Vietnam in 2022.

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21

Uplifting lives
and livelihoods

Coffee: a catalyst for change“Climate change is putting
coffee-growing areas underpressure. Building on 10 years’
experience of the Nescafé Plan,
we’re accelerating our work to
help tackle climate change andaddress social and economic
challenges in Nescafé value
chains.”Regenerative agriculture is an evolving
concept. In 2022, coffee (along with dairy) was
the first raw material where Nestlé developed adetailed regenerative agriculture toolkit.
The toolkit defines the objective ofregenerative agriculture at Nescafé – tomaximize soil health, to capture carbon in
the ground and to prevent its release into
the atmosphere. There are three main areasof work: protecting soil health, rejuvenating
coffee plots and preserving biodiversity, with
the necessary actions outlined in each area.

David Rennie
Head of Nestlé Coffee Brands

Nescafé Plan 2030 green coffee

See the full Nescafé Plan 2030 infographic

Agroforestry

What the launch of the
Nescafé Plan 2030 means
for the coffee sector.
Every second, 5500 cups of Nescafé areconsumed around the world. One in every
seven cups of coffee drunk every day is a
Nescafé. This means the brand touches the
lives of hundreds of millions of people, not justin the more than 20 origin countries where its
coffee is sourced, but also in the more than
175 countries where it is sold. As such, Nescafé
has an opportunity to lead the coffee sector’ssustainability drive.
Launched in 2022, the Nescafé Plan 2030
builds on the decade-long work of the Nescafé
Plan and the legacy of the Nescafé brand,
dating back to 1960, in helping coffee farmers
to adopt best practices. It is highly ambitious.
As part of a fully integrated strategy, Nescafé
will help farmers use regenerative agriculture

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to simultaneously achieve lower GHG
emissions, improved incomes and better social
conditions. This will represent an investmentof CHF 1 billion by 2030, supported by Nestlé’sinvestment in its regenerative agriculture andnet zero journeys.
The plan is a key part of the Nestlé Net
Zero Roadmap. With many of Nestlé’semissions originating in its agricultural
supply chain, Nescafé aims to contribute to
Nestlé’s commitment to halve greenhousegas emissions by 2030 and reach net zero
greenhouse gas emissions by 2050.
The plan is also aimed at delivering coffee
that is 100% produced sustainably by 2025
(including assessed as deforestation-free), with
20% of the brand’s coffee to be sourced fromregenerative agriculture methods within thesame timeframe (rising to 50% by 2030).

Land restoration

Green borders(riparian buffers)

Financial support

Human rights andchild protection

Actions include training farmers inregenerative agriculture practices and –supported by the Nestlé Global Reforestation
Program – an existing pipeline of projects toplant 20 million trees in and around coffee
farms in eight countries by 2026. Nescafé
expects this will have a positive impact on
biodiversity in coffee fields as well as reducing
GHG emissions.
While regenerative agriculture is central to
the Nescafé Plan 2030, the plan is holistic.
We will provide training to help farmers
transition to regenerative practices andhelp to improve farming families’ incomes.
There is an emphasis on rethinking andredesigning packaging, transitioning factories
to renewable energy and improving logistics to
reduce emissions.

Coffee farmers harvest
their crops by handin Vietnam.
Some of theregenerative andsustainable activities
being implemented
under the Nescafé
Plan 2030.

To achieve maximum impact, Nescafé plans
to expand regenerative agriculture initiatives
across seven countries where it sources 90%
of its coffee: Brazil, Colombia, Côte d’Ivoire,
Honduras, Indonesia, Mexico and Vietnam. In
Côte d’Ivoire, Indonesia and Mexico, the brandis piloting a financial support mechanism
to help smallholder farmers accelerate thetransition to regenerative agriculture.

5500

cups of Nescafé
are consumed
around the world
every second

Women andyouth empowerment

Optimized fertilization(including organic
fertilizers)

Reduce greenhouse gas emissions

Farm renovation

Increase farmers’ income

Cover crops

Income diversification(including intercropping)This is just a taste of things to come as
Nescafé seeks to renew the world of coffee anduplift lives and livelihoods with every cup.

Create better social conditions

Creating Shared Value and Sustainability Report 2022

22

Protecting
biodiversity

FOUR REALMS

Background

Approach

Biodiversity is declining faster than ever before. Today,
nearly a quarter of all animal and plant species are under
the threat of extinction.

Our Net Zero Roadmap includes strategies that can help
protect and restore biodiversity and reduce greenhousegas emissions. We are leveraging lessons learned from ourregenerative agriculture program and our Forest Positive
strategy, and our experience in sustainable sourcing andwater stewardship activities to better integrate biodiversity
considerations.

The current approach to agriculture is a contributing factor
to biodiversity loss. Thriving natural ecosystems have, overthe decades, been replaced with expansive farming areas.
This leads to the loss of habitats, displacement of species
and environmental impacts from the overuse or productionof pesticides, fertilizers and manure. Yet, we depend uponbiodiversity (particularly pollinators) for our business.
There is a way for agriculture to protect and restore
biodiversity – switching to more regenerative practices. As
a global food and beverage company, Nestlé is working tospark regenerative agriculture practices in our supply chain(and with others in the food industry). This includes aiming
to help safeguard biodiversity at the farm, landscape andglobal levels.

To meet increasing stakeholder interest in protecting
biodiversity, including from the financial sector, we haveestablished a cross-functional working group to help guide
Nestlé strategy, particularly identifying, measuring andmonitoring biodiversity impacts in our value chain. Nestlé
also supports the work of the International Chamber ofCommerce and Business For Nature in calling for strong
action by policymakers to safeguard natural resources.
Further information on our approach can be found in our
Climate Risk and Impact report.

Currently ourapproach covers
four realms:
air, water, farmland
and forestland.
Air
Main initiative:
Net Zero Roadmap
Water
Main initiative:
Water stewardship
Farmland
Main initiative:
Regenerative
agriculture
Forests
Main initiative:
Forest Positive
strategy

SDG CONTRIBUTIONS

The global food system, nature andclimate change are intrinsically linked.
Our efforts to help protect biodiversity
complement our Net Zero Roadmap.

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A Hoopoe bird in a field
in France, near where
our Vittel brand has
implemented watershed
regeneration projects.

Creating Shared Value and Sustainability Report 2022

23

Harnessing nature and its diversity as an asset are thedrivers of the Nespresso vision for regenerative coffee
agriculture. By 2030, Nespresso is aiming to have 95% of
its green coffee volume rated bronze on the Rainforest
Alliance Regenerative Coffee Scorecard (of which 70% will
be gold). By 2025, 10 priority areas, representing over 60%of the area managed under the Nespresso AAA Sustainable
Quality™ Program (in hectares), will have an action planin place.
For Nescafé, biodiversity is also key, as highlighted in thecase study (right) on Nescafé Origens Colmeia limitededition coffee, which includes a jar of honey made fromlocal honeybees.

Performance
Nestlé and the wider food industry are continuing todevelop an understanding of the importance of biodiversity
and the role of business in helping safeguard it. We arean active advocate in several global forums, working
groups and organizations, and we engage with investors
on biodiversity on a regular basis. We participate indiscussions related to the United Nations Convention
on Biological Diversity and consistently supported thepolitical intention to agree a Global Biodiversity Framework
throughout 2022. We are a signatory to the Businessfor Nature COP15 business statement on mandatory
assessment and disclosure on biodiversity and we have aleadership role in the International Chambers of Commerce
Working Group on Biodiversity.
In 2022, we carried out an assessment to identify, monitor
and measure biodiversity impacts in our supply chain, witha view to establishing a baseline for action. This builds on
the steps we are already taking in many of our ingredientsupply chains.
For example, we have studied the breadth of animal life
present on dairy farms in Spain to assess what additional
support to provide. At the 15 pilot farms assessed to date,
we have distributed nearly 100 bird boxes to support bird
populations. We plan to double the number of farms in thispilot by 2025.

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A forest
shade tree
towersabove acocoa fieldin Côted’Ivoire.

In Côte d’Ivoire, the Nestlé Cocoa Plan has been helping torestore the protected forests of Beki and Bossematie near
the border with Ghana. These forests are seen as a pivotal
habitat for Côte d’Ivoire’s elephant population, which once
numbered thousands but is now estimated at just 225
elephants. Through a partnership with local cooperatives,
SODEFOR, the Ministry of Water and Forests, the Rainforest
Alliance and others, the Nestlé Cocoa Plan has reforested
43 hectares in the Beki Forest, created management plans
for a buffer zone up to five kilometers around the forest andraised awareness among community members within thesebuffer zones on the importance of forest protection.
Hedges play an important role in providing habitats for
insects, birds and small mammals, and also sequester
carbon. Yet, in the Netherlands, around 90% of hedgerows
have been lost since 1900. Nestlé Professional teamed
up with the Hoogheggen Foundation to help restore
biodiversity in the country. For every Nescafé machine soldfor professional use, 2.5 meters of hedgerow were planted.

Outlook
We aim to strengthen our leadership and advocacy
on biodiversity and to accelerate the integration of
biodiversity considerations into our Net Zero Roadmap.
We will continue to engage in various forums and globalorganizations on climate, nature and biodiversity to advancecollective action on these critical topics.

Honeybees boost
coffee beans andbiodiversity“Produced in harmony, in the sameplace, using the same resources,
Colmeia places the power of regenerative
agriculture in our hands. Colmeia
provides more than compensation.
It is about adding value and taking
responsibility, to create a conscious
brand where the whole chain ofcoffee beans, plants, bees and people
grow stronger.”
Taissara Martins
ESG Manager for Coffee Brands in Brazil

Bees play an essential role inhealthy ecosystems. However,
the world’s bee population is in
rapid decline, posing a serious
threat to global agriculture andfuture food supply.
Bees are particularly important in coffee
production. Studies show bees can increasecoffee crop yield, improve quality and boost
sustainable coffee production.

Beehives to farms

Innovative partnership

Assisted pollination allows producers to reducethe impact of farming on the environment andpreserve biodiversity. The presence of bees
even helps to reduce the amount of inputs
used in coffee plantations, as bees help plants
consume fewer resources in production, andwith increased productivity, there is also an
important reduction in the carbon footprintof the farm. The project was managed withthe help of technology start-up Agrobee– a company that brings beekeepers andfarmers together to promote pollination andprovides training in efficient management andsustainable insect practices in the field.

Sweet combination

To bring the story of this exciting collaboration
to life, Colmeia is sold as a special limitededition Arabica coffee that includes a tasty
pot of honey made by the very same bees
that pollinated the coffee flowers. Hexagonal
packaging mimics the honeycombs andconnections of the hives and can be upcycled
as a vase after use.
Although it was a first edition, the Colmeia
concept is proving highly attractive. The
product sold out in 120 days and earned media
coverage worth BRL 7 million (USD 1.2 million)
in just 30 days, so the benefit of bees can be
felt across the value chain.

To tackle this imbalance, Nestlé Origens do
Brasil launched an innovative project called
Colmeia – meaning beehive – in March 2022.

Assisted
pollination
can begood forbiodiversity
and reducecarbon.

The aim is to significantly increase pollination
rates by introducing bee colonies to coffeeproducing family farms across three major
regions in the southeast and northeast of
Brazil: Chapada Diamantina (Bahia), Serras
do Alto Paranaíba (Cerrado Mineiro) and São
Sebastião do Paraíso (South of Minas).

Creating Shared Value and Sustainability Report 2022

24

Regenerating
the water cycle
BackgroundIn 2022, widespread flooding and drought affected many
countries around the world. This was recognized as a signof climate change acceleration. Europe, the west of North
America and China’s Yangtze River area all experienced
historic levels of drought. Meanwhile, devastating floods inPakistan affected around 33 million people.

NESTLÉ GROUP

We aim to reduce water use in our factories
by 6 million m3 between 2021 and 2023
(million m3)

Total water withdrawn
Total water consumed
Total water discharged

The availability of clean, safe water is under increasing
threat. Water stress – where demand exceeds the amountof good quality water available – is a growing problem
as the climate changes and populations increase. Unlessaction is taken, it is estimated that by 2050, water stresswill affect more than half the world’s population.
Agriculture accounts for 70% of all water withdrawals
worldwide. In some regions, water consumption to produce
food for a growing, urbanized population is increasingpressure on the natural water cycle. In other regions,agricultural inputs such as fertilizers can potentially affect
the quality of water sources.

2020

56.2

2022

2021

115.4

39.0

98.0

43.9

97.1

Water
withdrawn
Mm3
59.2

59.0
53.2

Livelihoods, health and sanitation, and biodiversity can all
be affected when the water cycle is disrupted, as can foodproduction. We depend on a reliable source of agricultural
raw materials from 100 countries. Many of these supply
chains are in countries where water stress is high andaccess to sanitation and hygiene is limited.

Water is vital to all life. In our case, we
depend on it in our supply chains andfor our operations. Water stewardshipis critical, for our business, for thecommunities in our value chain and forthe environment.
Table of contents

We recognize the need to play our part in helping toprotect, restore and renew water sources. For years, wehave implemented programs to continuously improve water
efficiency and reduce water withdrawals in our factories,
even as production volumes increase. Since 2021, ourbottled-water business has gone even further – seeking tohelp create a positive water impact everywhere it operates.

Reduction
in wateruse Mm3

1.69

2.30

2.38

SDG CONTRIBUTIONSCreating Shared Value and Sustainability Report 2022

25

Approach

Our Nestlé Waters
business is helping tocreate a positive water
impact at the catchmentlevel – such as here withAcqua Panna in Italy.

Our new Water workstream meets monthly and reports to
the Head of ESG Strategy and Deployment, with oversightfrom the ESG and Sustainability Council.
Nestlé performs regular assessments of local water
resources and water use inside and outside its factories,
including possible future risks. We engage withstakeholders and monitor external research findings.

Water partnerships and advocacy

Strategy

We manage our strategy across five pillars. In each of these
five pillars we consider the following four approaches:– The local and wider catchment level– Compliance as a minimum– Best practice in water resources management– Collective action

A river in France, with ariparian buffer (vegetation)
helping to protect it.

OUR WATER PILLARS

Across Nestlé, wewill continue towork to achieve
good water resource
management
throughout ouroperations andagricultural
supply chains.

In addition to providing safe drinking water and sanitation
for Nestlé employees, we support access to water for thecommunities surrounding our direct operations and in our
supply chains. Our new Human Rights Salient Issue Action
Plan on the Right to Water and Sanitation, addresses ourapproach in this area in depth (see performance section).

Nestlé factories serving our
Nestlé Waters business
Agricultural supply chain
Nestlé factories
Water in communities
Water partnerships
and advocacy

Nestlé Waters

Our bottled-water business includes brands such as Perrier,
S.Pellegrino, Vittel and Buxton. Our pledge is to lead theregeneration of the water cycle and to help create a positive
water impact everywhere our water business operates by2025. We have also committed to certifying all our Nestlé
Waters sites to the Alliance for Water Stewardship (AWS)Standard by 2025.

Agricultural supply chain

Water is a shared resource, requiring collaborative care.
We work together with other water users and partners toaddress watershed challenges and to ensure that water
resources are managed in a way that is ecologicallysustainable, socially equitable and economically beneficial.
We are dedicated members of:– The World Economic Forum’s 2030 Water ResourcesGroup (2030 WRG), focused on sustainable water
management to help countries achieve water security by
2030 through collective action.
– The CEO Water Mandate, a UN Global Compact initiativethat unites business leaders on water, sanitation andSustainable Development Goals.
– The WASH4Work initiative, which asks businesses to takeaction to address WASH challenges in the workplace,in communities where the business operates and insupply chains.
– The Alliance for Water Stewardship (AWS) TechnicalCommittee and Agriculture Working Group. Nestlé
representatives have also contributed to the work of the
AWS Board.

Nestlé Waters has
committed to certifying allsites to the AWS Standard
by 2025.

We use the Nestlé Responsible Sourcing Standard tospecify what we expect in terms of water use and water
management practices in our agricultural supply chains.
Traceability is key to identifying areas of water risk in our
supply chains. We assess the water footprint of important
agricultural commodities and identify opportunities wherewater management practices can be improved.

Nestlé factories

We aim to reduce water use in our factories by 6 million m3
between 2021 and 2023. We monitor water withdrawals
and water quality at our factories. We promote recycling
and reusing water where possible and closely monitor thequality of the water we discharge to ensure no downstream
negative impact and guarantee regulatory compliance.

Water in communities

100%

Water discharged
at our factories ismonitored for quality

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Access to safe drinking water and sanitation is a basic
human right and safe water, sanitation and hygiene (WASH)
contributes to health, well-being and community resilience.
We believe businesses have a role to play in helping ensurethat people have access to water and sanitation.

Creating Shared Value and Sustainability Report 2022

26

Nestlé viewpoint

factories. In 2022, total water withdrawals at Nestlé
factories were 97.1 million m3 (2021: 98 million m3). We
delivered absolute savings of 2.38 million m3 of water,
keeping us on track to reduce water use in our factories
by 6 million m3 between 2021 and 2023 as planned. The
remaining reduction was due to changes in our business.

Small actions
make a splash

Of our total water withdrawals, 36.1% were in regions with‘high’ or ‘extremely high’ baseline water stress in 2022, aslight increase from 2021.

This work was a success thanks to strong relationships
with partners and local stakeholders. Sharing data andknowledge has built trust over time.

Direct water withdrawals per tonne of total product showthat Bottled water and PetCare are the most water-efficient
categories. Our Confectionery and Powdered and liquid
beverages categories show the greatest improvements
compared to 2010.

Next year we’ll complete a project with the Natural Park
to restore the Castanya River. The river has been partially
blocked by landslides, following fierce storms. Water
continues to flow under the debris but several aquatic
species, such as the endangered Montseny newt, areunable to cross the barrier. Once the area is restored, thepark team will be able to re-introduce the species to thelower reaches of the river – with the two populations being
able to naturally reach each other again.

There were five water-related incidents that incurred a fineor penalty in 2022 as per the CDP reporting framework.
These incidents either pertained to exceeding certain
discharge limits or were administrative in nature, and theimposed fines or penalties were not material. All incidents
were reported in a timely manner to local environmental
authorities and resolved. We have identified the causesof these incidents and put in place measures to preventa recurrence.

The power of teamwork
Cisco Mayorgas
Water Resources Manager,
Nestlé Waters

A look at how Nestlé Waters isregenerating a local water cycle in Spain.
Our Viladrau water bottling plant in Spain is located in theMontseny Natural Park. Recent changes in rainfall patterns
and more unpredictable storms have impacted local
biodiversity. To help address this, Nestlé Spain has adopted
a series of targeted actions to protect endemic species.
Our first project is aimed at restoring wetlands, inpartnership with a team of local biologists and theMontseny Natural Park. Declared a Biosphere Reserve
by UNESCO in 1978, for many years the park was left
untouched. Vegetation grew, forests became dense andthe wetlands began to naturally silt up.
In March 2022, Nestlé Spain funded the re-excavationof four interconnected ponds that had disappeared. We
carefully removed silt deposits, transferred plants andprotected the area from park visitors. During the process,we uncovered a spring that now helps to maintain flow andrefill the ponds. Initial results show that despite one of thedriest summers on record, the ponds remained full andaquatic life thrived.
Working with biologists we identified red frogs as a key
marker species for the ponds’ biodiversity. We’ll know more
about how they are doing after the breeding season.

We believe if we can demonstrate that our small actions
can have an impact, we can replicate them in other areasof Spain and other countries facing similar challenges.
Perhaps we can inspire even greater collaboration.

Performance
Nestlé Waters

Nestlé Waters follows the Alliance for Water Stewardship(AWS) International Water Stewardship Standard on all
its sites. The AWS is a global membership collaborationthat promotes the adoption of a universal framework forthe sustainable use of water – the AWS Standard. We
contribute to the work of the Technical Committee andAgriculture Working Group. Nestlé representatives havealso contributed to the work of the AWS Board and its
International Standard Development Committee, which
first developed the AWS standard. During 2022, 21 Nestlé
Waters sites were AWS certified (against 19 in 2021).

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21

Nestlé Waters sites
certified to the AWS
Standard (19 in 2021)

5

Water incidents
in 2022Since 2021, Nestlé Waters has been identifying andimplementing projects designed to help regenerate local
water cycles in areas where they operate. In 2022, projects
included a drip irrigation program in Sheikhupura, Pakistan;
pond renaturation to support local wildlife in Viladrau, Spain(see Nestlé viewpoint, left); and restoring water quality
in Khanom Chin canal, Thailand. These projects havedelivered a volumetric water benefit of 2.3 million cubic
meters so far.
Nestlé Waters has shared research to develop waterpositive methodologies in an open-source format,
contributing to new modules of the World Resources
Institute’s Volumetric Water Benefit Accounting
methodology. This work helps organizations andbusinesses calculate the volumetric water benefits ofany water stewardship project.

Water withdrawals at our factories
Cisco Mayorgas reviews
regeneration work in
Montseny Natural Park,
Catalonia.

Assessing the water
footprint in our commodity
supply chain is one way tofind areas of improvement.

2.3

Million m3

Water withdrawals at our factories by product categories(m3 per tonne of product)
2010

2021

2022

% reduction
since 2010

Milk products

5.5

3.58

3.7

32.7

Confectionery

7.2

3.08

2.68

62.8

Nutrition and healthcare

13.6

8.39

8.68

36.2

PetCare

1.2

1.16

1.25

-3.9

Powdered andliquid beverages

13.9

5.93

6.18

55.5

Prepared dishes andcooking aids

5.5

3.13

3.08

44.0

Bottled water

1.7

1.52

1.48

13.2

Category

Percentage of water withdrawn inregions with ‘high’ or ‘extremely
high’ baseline water stress

Percentage of water consumed inregions with ‘high’ or ‘extremely
high’ baseline water stress

Volumetric water
benefits delivered
through projects

36.1%(35.4% in 2021)

51.5%(49.1% in 2021)

The need to improve water withdrawals and consumption
was highlighted by 2022’s droughts around the globe.
We continuously strive to improve water savings at Nestlé

Creating Shared Value and Sustainability Report 2022

27

Becoming morewater secure

Water in communities

In Q1 2023, we launched our new Human Rights Salient
Issue Action Plan on the human right to water andsanitation. The action plan reinforces WASH at the heart ofour water stewardship program and is aimed at focusing
our attention on preventing and mitigating WASH risks in
our operations and supply chain. It forms part of a suite ofaction plans covering all our salient human rights issues.
In terms of country-specific activity, farmers in Cauca,
Colombia used Community Development Funds provided
by Nespresso to build water treatment plants on local
aqueducts. This will provide more than 44 000 people inthese two regions with access to clean, safe drinking water.
As different communities have different priorities, it’s
important for us to understand their unique needs. Our
Community Relations Process tool, developed in 2019,has been rolled out in our medium-to-high-risk markets.
It helps identify local community members to involve in
our tailored WASH interventions.

A WASH
point inCôte d’Ivoire
installed
through ourpartnershipwith theInternational
Federationof Red Cross
and RedCrescent
Societies(IFRC).

East
Anglia,England,home toone ofour LENs
projects.

Water Partnerships and Advocacy

In 2022, we began a landscape project in East Anglia, UK aspart of a Landscape Enterprise Networks (LENs) initiative.
This holistic regeneration initiative includes aiming to havea positive impact on water quality through planting covercrops (see the A marketplace for nature-based solutions
external viewpoint).
Nestlé, along with other WASH4Work members, signed abusiness declaration at the COP27 UN Climate Conferencein Egypt (the latest in the UN’s series of climate change
summits) to mobilize the leadership and partnershipneeded to shape a more climate-resilient water sanitationand hygiene-secure world.
Separately, in Stockholm, during World Water Week (anannual, global event focused on water issues), Nestlé
organized a panel event alongside three NGO partners:
Water Aid, the Toilet Board Coalition and the Global Water
Partnership focused on taking a rights-based approach
to WASH. Nestlé Waters also participated in an event on
the topic of regenerating water cycles, which included
input from the Swiss Agency for Development, water
strategy analyst Bluerisk and the International Union forConservation of Nature. The UN Global Compact initiative
CEO Water Mandate was discussed along with the “water
positive” concept, associated methodologies and the needto develop transformative projects with long-term benefits
at the catchment level.

OutlookDuring 2023, we will continue to work toward improved
water resource management and water stewardship.
We are also beginning an in-depth study to estimate
the water co-benefits of the agriculture and nature-based
solution projects within our Net Zero Roadmap foraddressing shared water challenges.

Table of contents

Access to safe, affordable andreliable water, sanitation andhygiene – known as WASH – isa basic human right. Yet billions
of people around the world still
do not have access to safe andclean water.
At Nestlé, we are in a unique position to help
increase access to water and sanitation for our
employees who work in our factories, for thecommunities living around our operations andfor the people working in the farms that supply
us. Our approach is twofold: assess, address,
monitor and report on risks in our value chain,and engage with wider society and business tocollectively help people become more watersecure and climate resilient“Water is a shared resource, so
caring for it must be throughjoint collaborative actions.
Through partnerships in thelocations where we operate,
I believe we can make a difference
and inspire more comprehensive
WASH approaches.”
Sheikh Waqar Ahmad
Head of Corporate Affairs &Sustainability at Nestlé Pakistan

Water in Pakistan

The situation for communities in Pakistan is agood example of the need for this integrationof programs. Pakistan is one of the mostwater-stressed countries in the world, with thebulk of its freshwater being used in agriculture.
On top of this, in 2022, the country faced
extreme drought and water shortages followedby the worst monsoon floods in a decade,with countless homes washed away and vital
farmland destroyed.

Our pledge evolves

We were a founding member and co-chair of
the World Business Council for Sustainable
Development WASH Pledge in September
2014. By signing this pledge, Nestlé and over
50 other global businesses committed to
implementing WASH for all employees in every
location we operate in.
Since then, the urgency to address waterrelated climate risks has intensified. Theserisks, which arise from too much water, too
little water or polluted water, have a direct
impact on WASH, especially for the mostvulnerable. We believe it is time for companies
to bring their WASH and climate actions
together. This is why in November 2022,
we called for businesses to apply a climate
resilience framework for WASH programs
through the WASH4Work platform.

To help people tackle these extreme climatechange impacts and become more water
secure, we identified Pakistan as one of ourpriority countries in our Salient Issues Action
Plan on the Right to Water and Sanitation,
published in Q1 2023.
All four of our factories and other sites
in Kabirwala, Islamabad, Port Qasim andSheikhupura meet the WASH Pledge
requirements, strengthening the rights of over
7500 employees. In addition, we have set up
six drinking water facilities, which provide
access to clean and safe water to over 60 000
people every day, and we monitor theseregularly for quality.
Through our water education program, as partof Nestlé for Healthier Kids, we reached out to
35 000 children and 250 teachers in schools in
2022 on the benefits of drinking more water.
Together, our efforts ladder up to Sustainable
Development Goal 6, on clean water andsanitation, and Goal 17, on partnerships for
the Goals.
In the future, we plan to work with global
and local stakeholders to develop and apply
a climate-resilient WASH framework to ourwater, sanitation and hygiene programs andinvestments, and to continue to leverage ourbroad reach and influence.

A Nestlésupported
WASH
initiative inPakistan.

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28

Ingredients produced
sustainably

PRODUCED SUSTAINABLY

PALM OIL

100% key ingredients produced sustainably by 2030*

100% certified sustainablepalm oil sourced by 2023

(16.3% in 2021)

2022 data comprises Roundtable on Sustainable Palm Oil
certifications and credits as follows: 20.0% segregated, 1.6%
mass balance, 45.6% book and claims without including
credits from independant smallholders, 3.7% book andclaims from independent smallholders only.

16.3% in 2021
22.0% in 2022**

58.7% in 2020
71.1% in 2021
71.0% in 2022
Sustainable
key ingredients sourced* Key ingredients refers
to 14 key agricultural raw
materials that cover 95%
of our annual sourcing byvolume: cereals and grains;cocoa; coconut; coffee;
dairy; fish and seafood;hazelnuts; meat, poultry
and eggs; palm oil; pulp
and paper; soy; spices;sugar; and vegetables.

22.0%
in 2022**

Sustainablepalm oil sourced

100%
by 2023** Change in definition in
2022 means year-on-year
data are not comparable.

We can deliver a positive impact byensuring that the raw materials in our
products have been produced sustainably
and with respect for people, planet
and nature.

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COCOA

COFFEE

CAGE-FREE EGGS

100% cocoa sourced through the
Nestlé Cocoa Plan by 2025

100% sustainably produced coffee
by 2025

100% cage-free eggs
sourced globally by 2025

The % cocoa sourced through the Nestlé Cocoa Plan includes
volumes of Rainforest Alliance certified mass balance cocoathat are not accounted for in the global Produced Sustainably
indicator above.

87.0% Nescafé Plan (81.5% in 2021)
93.1% Nespresso AAA Sustainable Quality™ Program(92.6% in 2021)

48.0% in 2020

75.0% in 2020

76.3% in 2021

50.6% in 2021

82.8% in 2021

71.7% in 2022

68.3% in 2022

88.0% in 2022

Sustainablecocoa sourced

Sustainable
coffee sourced

100%

100%

by 2025

by 2025

Cage-free eggs sourced

100%
by 2025

SDG CONTRIBUTIONSCreating Shared Value and Sustainability Report 2022

29

BackgroundWe rely on long-term supplies of high-quality, sustainably
produced raw materials. Their sustainability depends on
different factors, including agricultural practices used andtheir impact on critical forests and natural ecosystems,
and the extent to which human rights and animal welfare
practices are respected and promoted.
Challenges related to agriculture often have their roots inor are exacerbated by poverty. Supporting communities,
facilitating and incentivizing better farming practices
and helping improve livelihoods are all crucial concerns
at Nestlé.

SUSTAINABLE
SOURCING: OUR
FOUR PILLARSOF ACTIVITY
Transparency
Improve traceabilityof the origins of
our raw materials
and enhance ourunderstandingof how they
are produced

The ability to map our supply chains is essential toascertaining whether ingredients have been produced
sustainably. Without traceability, we cannot assess
conditions or support our suppliers – large and small –to improve.

Environment
Contribute toconserving andrestoring theenvironment andnatural resources

By reporting transparently on these issues, we canpush ourselves and the wider industry to meet current
commitments and become increasingly ambitious in
the future. Our aim is for 100% of our key ingredientsto be produced sustainably by 2030.

Human rights
Respect and promote
the rights of peoplein our supply chains

Approach
Over the course of 2021 and 2022, we developed andrefined a new Produced Sustainably Framework. This
framework is designed to enable continuous improvement
across Nestlé’s supply chain to achieve full implementationof Human Rights and Environmental Due Diligence(HREDD) and delivery of positive impacts on people,
nature and climate in Nestlé’s sourcing origins.

Animal welfare
Contribute tocontinuously
improving how
animals in our supply
chains are treated

It applies to 14 key ingredients that represent 95% of ourannual sourcing by volume. They are: cereals and grains;cocoa; coconut; coffee; dairy; fish and seafood; hazelnuts;
meat, poultry and eggs; palm oil; pulp and paper; soy;
spices; sugar; and vegetables.
Once fully implemented, the Produced Sustainably
Framework will mean that:– The material is traceable back to the point of origin (farmor group of farms)– Human rights and environmental due diligence (HREDD)
systems are in place at direct supplier level to assess,address and report on the potential or actual impacts
identified in the supply chain– The volumes Nestlé buys through its direct suppliers arecompliant with the Nestlé Responsible Sourcing Standard
requirements at production level

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In 2022, we decided to split our original key performanceindicator (KPI) into two. The framework’s main KPI
measures the performance of volumes at origin level
against the requirements of our Responsible Sourcing
Standard. For 2022, we reported against that KPI,
as follows:– A material is produced sustainably either when it can betraced to low-risk countries or when it has been assessed
as compliant with our Responsible Sourcing Standard
through one of the following means:– certification– second or third-party farm assessments– on-the-ground programs in which Nestlé directly works
with producers (e.g. Nestlé Cocoa Plan, Nescafé Plan or
Nespresso AAA Sustainable Quality™ Program).
Our Responsible Sourcing Standard sets out nonnegotiable requirements and ways of working with ourdirect suppliers, which we expect them to roll out to theirown partners in turn.
We work closely with our direct suppliers to map our
upstream supply chains and, where needed, to carry out
farm assessments with partner organizations. If gaps arefound, the supplier develops an action plan. If a supplierrefuses to improve or fails to close identified gaps, we may
terminate the business relationship.
A second KPI measuring our suppliers’ Human Rights andEnvironmental Due Diligence will be introduced in 2025
(see Outlook).

External viewpoint

Inspiring actionin SabahQuek Karl Yen
Country Head for Malaysia
at Earthworm Foundation

How Nestlé and Earthworm are working
to make palm oil more sustainable.
Conservation is something I am passionate about. I studied
Forestry and began my career in the palm oil industry
before I joined Earthworm. I now lead the Earthworm
Foundation team in Malaysia, where we take a holistic
approach to responsible sourcing across clearly definedsourcing areas, collaborating with key stakeholders fromthe private and public sectors, farmer associations and civilsociety in tackling climate change, biodiversity and humanrights risks. We call it the landscape approach.
This is incredibly important in the state of Sabah
in Northern Borneo, where palm is by far the mostplanted crop. Supplying 6.2% of the world’s palm oil in
2020, the crop has driven both economic development
and deforestation.

Communities and smallholders are the key

In parallel, we are engaging with local communities in
Sabah on forest protection and restoration, as well as
training smallholders on sustainability, wildlife protection,
farm productivity and income diversification in Nestlé’s
supply chain. So, we are building solutions with a real
sense of the big picture. Collectively we hope to assist
5000 smallholder farmers through conservation initiatives,income diversification and good agricultural practices.
We hope to see a 50% reduction in deforestation in key
sensitive areas in Sabah by 2025.
Another example of our work together is our Workers andFamilies Program. The industry in Sabah relies heavily on
Indonesian and Filipino migrant workers, whose children
often live with them in remote plantations. These children
face limited access to education, healthcare and birth
registration, which are all risks linked to child labor. The
risks are broader than any one supply chain, so we seek
to address the root causes and take a holistic approach.
Our activities include developing a Child Risk Assessment
Framework (CRAF) toolkit with Nestlé in 2020, which wasthen piloted with a supplier in 2021 and early 2022.
We work with those who really want to transform, whowant to be innovative, try new methods and inspire others.
As long as the landscape approach creates economic,
social and environmental value for everyone, others will
replicate our actions willingly.

5000

Aim to assist
smallholder farmers
through conservation
initiatives.

50%

Aim to reduce
deforesation in
key sensitive areas
by 2025.

Earthworm is partnering with Nestlé on a number of
initiatives, including the Sabah landscape initiative where
we are driving collective action and holistic change in thiscritical sourcing region. We hope to show smallholder
farmers what’s possible when we combine sustainableeconomic development, forest conservation, decent work
opportunities and resilient livelihoods for communities.

Sabah, Malaysia, thelocation of a palm oil
initiative with Earthworm(see the Inspiring action in
Sabah external viewpoint).

We bring together everyone linked to palm oil – companies
like Nestlé but also NGOs, civil society, experts,
governments, mills, plantations, farmers and communities– to find the best ways to regenerate nature and improve
people’s lives. Our team, who come from a diverse
background including the palm oil industry, works handin hand with farmers on the ground to find pragmatic
solutions that can be replicated across other commodities.

We partner with Earthworm on a variety ofsustainable sourcing initiatives around the world.

Creating Shared Value and Sustainability Report 2022

30

Scientific approaches toregenerative agriculture

An Ivorian Cocoa farmer
prunes a tree to improve
productivity and reduce
the risk of plant disease.

In February 2022, we announced the creation of the
Nestlé Institute of Agricultural Sciences to translate novel
agricultural science into concrete applications and to
identify and develop the most promising regenerative
agriculture technologies. Based in Lausanne, Switzerland,
the organization has a decentralized structure andincorporates Nestlé’s existing plant sciences researchfacilities in France, as well as numerous research farms
around the world.

The Nespresso AAA Sustainable Quality™ Program isa coffee sourcing program designed to ensure thecontinued supply of high-quality coffee while improving
the livelihoods of farmers and their communities, andprotecting the environment.

157 157

Number of farmers in
the Nestlé Cocoa Plan

Coffee plantlets at the plantscience unit of the Nestlé
Institute of Agricultural
Sciences (France), where
research into more reslient
coffee varieties has been
carried out since 1986.

Performance
In 2022, 22.0% of our key ingredients were produced
sustainably, meeting our criteria for transparency,
environmental and social standards, and animal welfare.

Transparency

Multiple commodity- and issue-specific reports werereleased during the year, such as the Nestlé Cocoa Plan
Progress Report and Towards Forest Positive Cocoa report.
Nespresso’s The Positive Cup: Accelerate positive impact
to 2030 report was published in early 2023. Nescafé also
engaged with over 1000 registrants in a live event for thelaunch of the Nescafé Plan 2030.

Environment

In 2022, we continued efforts to help protect and restore
the environment through the implementation of our Net
Zero Roadmap. Examples of this include biodiversity impact
assessments, farmer training in regenerative agriculture
techniques, our Forest Positive strategy and projects to
help regenerate local water cycles. For 2022, for the firsttime, we are reporting progress toward our commitment
to source 20% of our key ingredients through regenerative
agriculture methods by 2025.
Notably, our network of at least 25 pilot farms in 15
countries aiming for net zero continues to serve as a proof

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All of the eggs that we purchase for our food products are
now certified cage-free in Europe and the United States and71.7% are cage-free worldwide. We are on track to achieve
100% cage-free eggs globally by 2025.

Nespresso

The Institute has three focus areas: plant sciences, dairylivestock sciences and agricultural systems sciences. In
plant sciences, the team is selecting plant-based alternative
ingredients for our recipes. We are also breeding coffee
and cocoa varieties that combine higher productivity withdisease and drought resistance. In Mexico, for example,
such new coffee varieties are already delivering 50% higher
yields and a 30% reduction in carbon footprint.
To decrease emissions related to our dairy sourcing, wetest and validate existing and new scientific approaches
including feed supplements, wearable technologies,
immunological approaches and manure management
options. In agricultural system sciences, our focus on
new agronomic practices and methods to quantify theirimpact on soil health, carbon sequestration and biodiversity
outcomes aims to accelerate the transition to regenerative
agriculture sourcing.

Animal welfare

of concept for reducing and removing greenhouse gas
emissions, using cutting-edge technology and regenerative
farming methods.
In palm oil, we remain committed to sourcing 100%Roundtable on Sustainable Palm Oil (RSPO) certified
supplies in 2023, even if there is today already a large
market supply shortage of RSPO-certified palm kerneloil. We are working with industry bodies to demonstrate,
regardless of this market situation, our 100% commitment
to the due date.

Since 2009, Nespresso has reduced the carbon footprintof a Nespresso cup of coffee by 24%*. The AAA Program
pays premiums for coffee that has been grown according
to AAA principles. In 2022, the AAA Program integrated
the newly released Rainforest Alliance Regenerative Coffee
Scorecard. The Scorecard is designed with a continuous
improvement approach to regenerative agriculture, fromachieving greater efficiencies to the redesign of farms.
It outlines three performance ratings: bronze, silver andgold according to the adoption of identified regenerative
practices across criteria on soil, ecosystems, crops andfinancial management. As part of this scorecard, throughthe Nespresso AAA Sustainable Quality™ Program farmers
are compensated for making a positive contribution tonature by adopting regenerative practices and producing
in ways that restore and protect biodiversity in and aroundproduction areas.
In April 2022, Nespresso became B Corp-certified, joining
a global community of businesses that meet the highest
standards of sustainability and social responsibility.

* Carbon footprint
reduction of a cup of 40ml
of Nespresso coffee in 2020(vs 2009 LCA study), as
measured by independent
external partner Quantis.

A coffee farmer inBrazil – one of our major
sourcing origins.

Human rights

During 2022, we worked closely with external expert
organizations to develop action plans that address 10
salient issues identified in our Human Rights Framework
and Roadmap. These were published in Q1 2023.
We also saw progress on existing programs that addresshuman rights. During the year, the volume of cocoa sourced
through the Nestlé Cocoa Plan increased to 68.3% of total
cocoa sourced. The plan extended its coverage in Brazil andthe groundwork was laid to bring producers in Cameroon
and Nigeria into the plan. The program is designed to
improve livelihoods in cocoa-growing communities,
covering 3462 farmers in Brazil.

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31

A grainof hope

OutlookIn 2022, we refined our Produced Sustainably frameworkand decided to split our original KPI into two. From 2025,
we will report a second KPI, which will assess the maturityof our direct suppliers’ Human Rights and Environmental
Due Diligence (HREDD) management systems andprocesses. This KPI is designed to help us comply withmandatory HREDD legislation and ensure that suppliers
are cascading HREDD requirements throughout the supply
chain. This new KPI will be in addition to the existingproduced sustainably indicator, which assesses theperformance of volumes at a production level against social,environmental and animal welfare criteria set out in our
Responsible Sourcing Standard.
Additionally, we will begin tracking progress against theimplementation of our salient issue action plans, publishedin Q1 2023, as identified in our Human Rights Framework
and Roadmap. These are crucial to strengthen our levelof due diligence across our value chain and to support
enabling environments for the respect and promotion ofhuman rights.

Lowering our carbon footprint inrice farming.

A dairy farmer at
one of the farms
that supplies us in
Cumbria, England.

Agriculture holds huge potential for improving
lives and helping to protect the environment.
With this in mind, over the last two years we
implemented two regenerative agriculture pilot
programs in our rice supply chain in the UnitedStates. Through this, we hoped to reduce
CO2e emissions, water and fertilizer usage,and input costs for farmers – helping to boost
their margins.
Our US-based Purina PetCare brand is Nestlé’slargest rice user, so we joined forces withthe sustainable rice program of brewing
company Anheuser-Busch and Indigo
Agriculture – an innovative agtech company
leveraging science and technology to help
improve the sustainability and profitability of
the agriculture industry. We partnered further
with Indigo to trial a program within Nestlé’sGerber brand.

Precision crop spraying
by drone can reduce
chemical usage andcarbon footprints.

More CO2 can be captured
in the soil by adopting
regenerative agriculture.

From hands-on advice at the farm to remotetechnical support, the Indigo team brought
new ideas to life for Bowers and otherArkansas rice farmers, such as minimizing
tillage, alternate wetting and drying irrigation,
precision drone-controlled crop spraying andfurrow irrigation.

Indigo has worked with the
Climate Action Reserve to help
develop the most rigorous soil
carbon methodology on themarket – and is currently the
only soil carbon program thathas produced credits at scale
under this standard.

Outstanding results

The newly adopted regenerative agriculture
practices at the Bowers farm achieved thedesired effect without any reduction in yield.
This win-win, pragmatic and collaborative
approach by Indigo is helping convince
farmers like Trey Bowers to place their trust in
Nestlé’s regenerative agriculture practices.
And the Bowers farm is just one example.
In total, our Purina PetCare program
encompassed 72 000 bushels from nine
farmers. It is expected to save over 461 million
liters of water and create GHG savings of 300
tonnes of CO2e.
Already the potential of the project is clear.
Scale up toward 2023-2025 is estimated todeliver 83 000 tonnes of CO2e savings – theequivalent of taking 6000 cars off the roadfor three years – across 190 000 cumulative
acres of land, an area about the size of
New York City.

The Indigo technical team knows what it
takes to make a difference thanks to realworld experience – many of their experts
are former or active rice farmers. At theBowers Farm, a 1800-hectare father-andson operation in Arkansas that produces rice
for Gerber, we trialed a sustainable farming
program to reduce emissions, nitrogen usage
and groundwater usage. These programs
support farmers in their transition toward
more sustainable farming practices acrosstheir operations.
Technology
has a roleto play inregenerative
agriculture –includingadvancedmonitoring.

Table of contents“I’m all about wanting thisworld to stay sustainable
and to keep everythingfor everybody to have longterm. I’m trying to leavesomething for my kids. I
want Bowers to be in a place
where if they want to farm,they can just farm.”
Trey Bowers
FarmerCreating Shared Value and Sustainability Report 2022

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Human rights andresilient communities
Background

Approach

People and respect for human rights are at the core of
Nestlé’s culture and values and an intrinsic part of thetransition to a just, equitable and regenerative food system.

We have been working to incorporate human rights in all
aspects of our business for many years. Today, humanrights elements have been mainstreamed into 22 Nestlé
policies and embedded across our governance structures.

Providing fair and resilient livelihoods with safe anddignified work, while reducing inequalities, can advanceand promote human rights. At the same time, contributions
to global emissions can be reduced by accelerating thetransition to regenerative practices. We want to reward
farmers in our supply chains for producing quality
ingredients and making positive contributions to theircommunities and the environment.
We aim to use our scale, experience and resources tocontribute to this vision, by raising awareness of humanrights, promoting best practices and empowering people
across our operations and within our supply chains.

SDG CONTRIBUTIONS

Our board-level Sustainability Committee will ensure that
we carry out due diligence and report on our most severe
human rights-related risks. It also oversees our compliancewith our pledges and the regulatory framework.
In addition, our ESG and Sustainability Council advises our
executive management on making informed and fact-based
decisions to manage salient issues in the upstream supply
chain. It is supported by the work of an internal Human
Rights Community of around 40 people from different
functions with human rights responsibilities.

We were early adopters of the United Nations Guiding
Principles on Business and Human Rights and theOrganisation for Economic Co-operation and Development
Guidelines for Multinational Enterprises. We have also
piloted multiple programs to assess and remedy risks on
the ground.

Advancing human rights throughout
agricultural value chains is key tothe transition toward a fairer, moreregenerative global food system andbuilding a more resilient future forour planet and its people.
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Through strong governance, forward-looking advocacy andleading transparency, we want to be at the forefront of ourindustry. Our work in this area will further strengthen ourcontribution to the UN’s Sustainable Development Goals(SDGs). Our Human Rights Framework and Roadmap – andthe resultant action plans addressing our salient issues– will help us stay ahead of emerging human rights due
diligence legislation in different markets where we operate.

Human rights touch
almost every aspect of oursustainability approach.

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33

Due diligence is at the heart of our new
Human Rights Framework
To enhance our ability to assess, address and report on
human rights risks, we have developed dedicated actionplans for each of our salient issues.
Our action plans are designed to articulate our strategy forassessing, addressing and reporting on each salient issue,
defining what we need to do across our value chain, as wellas what collective action can be taken. They are supportedby the following enablers:

Enabler 2

Enabler 1

Governanceand incentives

Policies andcontrol systems

We will integrate humanrights at all levels of ourgovernance structure.

Our Human Rights Framework

Our Human Rights Framework and Roadmap, published in
2021, describes our multifaceted role in promoting a justtransition that prioritizes people. It places due diligence at
the core of our approach and defines the five enablers that
support our work.
It also identifies 10 salient issues where human rights
may be most at risk in our business and value chain. We
published action plans for each of these salient issues in
Q1 2023 and have committed to reporting on our progressin implementing them by 2025.
Stakeholder engagement and partnerships have long been
an important part of our strategy. We collaborate with awide range of organizations on human rights issues, suchas the Fair Labor Association and the International Cocoa
Initiative, among many others.

By 2025, we will report on our progresson implementing all our salient issue
action plans.
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We will leverage our policies
and control systems toensure human rights areembedded throughout
the organization.

Due
Diligence

The Nestlé Cocoa
Plan has beenworking to improve
human rights in Côte
d’Ivoire since 2012.

Assess – Address – Report

Salient Issues
Action Plans
Enabler 3

Enabler 4

We will engage with key
stakeholders and advocate
for smart due diligencelegislation and collective
action on the ground.

We will partner withthought-leading andboots-on-the-groundorganizations.

Engagement
and advocacy

Strategic
partnerships

Enabler 5

Transparency and reporting

We will provide a high level of transparency of the
progress we make and the challenges we face.

Nestlé viewpoint

Connecting
the dots
Barbara Wettstein
Human Rights Manager,
Sustainable Sourcing

Operationalizing our human rights
action plans.
After 13 years in Nestlé’s Public Affairs team I madethe unusual move from a communications role to an
operational one in Nestlé, as a Human Rights Manager.
I’m grateful to Nestlé for the opportunity because it is achance for me to dive deeper into the nitty gritty of thisimportant topic. My main challenge over the next 12 months
will be the operationalization of our salient issue actionplans in the supply chain.

A clearer understanding

Overall, implementing the action plans will give us a better
understanding of the risks we face and help make sure we
invest our time and resources in the right places. Some of
the granularity required might seem time consuming now
but in the long term the approach will make the team more
efficient and systematic.
We will, of course, continue to complement our efforts inour supply chains with collective action. We will promotecollaboration between our multiple stakeholders andwork to strengthen the links between Nestlé’s global andmarket-level teams – particularly those in priority countries
identified by our action plans through a risk assessment.
And we will engage with civil society and government toenable the right conditions to tackle the root causes ofhuman rights risks in order to trigger a positive impact on
the ground.
We’ve learnt a lot over the years about how to enhance
our ability to assess, address and report transparently onhuman rights risks. Now we’re further strengthening thatapproach. It will be challenging. There are many moving
pieces – all going at different speeds. So, it will take timeto create synergies and bring different areas up to the nextlevel. But, by bringing the big picture into focus, we aim toultimately accomplish real change on the ground.

What excites me is not just the importance of this work,
but the challenge involved. To bring our salient issue
action plans to life, we will need teamwork across ahuge spectrum of the company, breaking down silos andconnecting the dots. This is because human rights is suchan interconnected topic that touches on multiple areas, suchas our climate, water, regenerative agriculture, sustainablesourcing and Forest Positive strategies, among others.
We need to look at human rights from a systems
perspective. For example, Indigenous Peoples’ and Local
Communities’ land rights and deforestation risks are clearly
linked, so it makes sense for teams to combine efforts andresources to deal with the root causes of both. My role is toensure there is a thread that links human rights initiatives
across all our 14 key ingredients and build synergies acrossthe different projects my sustainable sourcing colleagues
are driving.
This truly cross-commodity approach will give us the
chance to learn from best practices already used insome areas of the business and apply them to others –introducing consistent systems, processes and tools
where needed.

Our salient issue action plans include gender equality
and living income approaches.

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34

Performance
In 2022, we developed action plans for our salient issues
and published them in Q1 2023. These plans are the criticallink between our ambitions for advancing human rights
and our ability to accomplish real change on the ground, allwhile strengthening our due diligence approach.

We are also developing reporting indicators for each action
plan. We continue to train new employees on human rights
through mandatory training and will be updating training
for specific functions as action plans are rolled out.

Action plans work by initiating direct steps across ourvalue chain to assess and address human rights risks,
and to monitor and report on prevention and remediation
activities. They are also an expression of how we can use
our influence to actively support collective engagement
and collaboration between stakeholders to address the root
causes of human rights issues.
Our internal Human Rights Community worked withexternal expert organizations to jointly create action
frameworks, core actions and timelines. For instance, todevelop the action plan on Indigenous Peoples’ and Local
Communities’ Land Rights, we worked with Proforest andLandesa, on living income we worked with Sustainable
Food Lab and on the Right to Water and Sanitation, we
collaborated with twentyfifty.

Child Labor Monitoring
and Remediation
System performance

Now published, we will start implementing these actionplans in 2023. To maximize effectiveness, each action plan
will be integrated into relevant ingredient strategies, suchas the Nestlé Cocoa Plan for cocoa, the Nescafé Plan 2030
for coffee and our dairy sourcing strategy.

Our salient issues

Our income accelerator
program is an example
of our human rights
work in action.

– Right to water and sanitation– Living income and living wage
– Forced labor and responsible recruitment– Health and safety at work
– Gender equity, non-discrimination and non-harassment– Freedom of association and collective bargaining– Indigenous Peoples’ and Local Communities’ land rights– Data protection and privacy– Child labor and access to education– Right to food and access to nutritious, affordable andadequate diets

Improving human rights can bring wider benefits

Our action plans shine a spotlight on how integral humanrights are to all parts of our business. Respecting andpromoting human rights is key to delivering our wider
commitments and our journey to advance regenerative foodsystems at scale.
For example, our income accelerator program in cocoa(see the Toward a living income case study) demonstrates
how we can help improve incomes and contribute toaddressing poverty, which in turn reduces child labor risks
and deforestation risks. Similarly, addressing the right tofood and improving access to nutritious, affordable foodis part of our wider ambitions for enhancing nutrition. Thisaction plan follows a collaboration between Nestlé andTufts University, which examined the nexus between theright to food and regenerative food systems. The right towater and sanitation can be linked to our work on helping
to protect the quality of natural waters and stewarding
water resources.
Our long-term Forest Positive strategy, published in 2021, is
helping us embed protection for Indigenous Peoples’ andLocal Communities’ land rights, while helping smallholder
farmers develop sustainable livelihoods.

Nestlé
has been
helping totackle childlabor risks
in WestAfricasince 2012.

Tackling child labor risks in cocoa

In early 2022, the Nestlé Cocoa Plan announced the launchof an innovative income accelerator program, primarily tohelp tackle child labor risks (see the Toward a living income
case study).
The Nestlé Cocoa Plan has long been innovative. We were
the first company in the cocoa sector to introduce a Child
Labor Monitoring and Remediation System (CLMRS) in our
supply chain and many companies have now adopted this asa leading tool for tackling child labor risks by working directlywith communities on the ground. Our CLMRS prioritizes
access to education, including building and renovating
schools and securing birth certificates for registration.
The CLMRS is a multi-stage process that starts with raisingawareness. Community Liaison People visit farmers andcooperatives and, based on visits and surveys, identify
children at risk. We carry out follow-up visits with each ofthese children and record the number who report that they
are no longer at risk during two consecutive visits. In 2022,
the number of children identified who reported no longer
engaging in activities posing a risk of child labor at the twomost recent follow-up visits was 8155 in Côte d’Ivoire and819 in Ghana.
In the last year the Nestlé Cocoa Plan expanded its reach,to cover 68.0% of Nestlé’s cocoa supply (up from 50.6%)
last year, including a greater presence in Brazil.

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Côte d’Ivoire

Ghana

168 506

6312

8155

819

Cumulative total numberof children who havereceived support

Cumulative total numberof children who havereceived support

Number of children identified
who reported no longer engaging
in activities posing a risk of childlabor at the two most recent
follow-up visits (6307 in 2021,
4838 in 2020)
2021

2022

Households coveredby CLMRS to prevent
and address childlabor risks

69 31872 625

Children covered by
CLMRS to prevent
and address childlabor risks

94 748

Total numberof children who
received support

29 424

Number of children identified
who reported no longer
engaging in activities posing
a risk of child labor at the twomost recent follow-up visits(738 in 2021, 693 in 2020)
2021

2022

Households coveredby CLMRS to prevent
and address childlabor risks

10 71114 797

98 674

Children covered by
CLMRS to prevent
and address childlabor risks

5 978

11 66911 532

Total numberof children who
received support

2809

3503

Creating Shared Value and Sustainability Report 2022

35

Towarda living income

Nestlé Cocoa Plan –Income Accelerator Program

In early 2022, following a successful pilot,
the Nestlé Cocoa Plan launched an innovative
income accelerator program. The programaims to tackle child labor risks by incentivizing
and supporting change in cocoa farming
households, helping them toward a living
income. It does this through a cash incentive,
directly paid to the cocoa-farming family
through mobile money, and support acrossfour areas: pruning to improve cocoa farm
productivity, child education, agroforestry
and additional incomes. Women and genderequality are a key focus.

Why farmers’ incomes matter.
We are working to help address a number ofrisks in our supply chains, from child labor
to deforestation. Often, these challenges
seem unrelated. Yet there is often a common
underlying cause: poverty.

CoffeeOur coffee business is also working to help farmers reach aliving income, for example through the Nescafé Plan 2030,
announced in October 2022 (see the Uplifting lives andlivelihoods case study). Nespresso is working with Fairtradeand other NGO partners to help maximize and protect
the incomes of farmers in its Nespresso AAA Sustainable
Quality™ Program.
Nescafé and Nespresso are also active members of theInternational Coffee Organization’s taskforce, whichcontains a working group led by the non-profit organization
Sustainable Food Lab, exploring living income forcoffee farmers.

Outlook
Our immediate priority is to begin implementing our salientissue action plans. We will carefully monitor progress toensure they are effective.
We are monitoring the income accelerator program andexpect to assess its effectiveness in late 2023. Should thisinitial phase prove successful, we plan to scale up to 30 000
farmers across Côte d’Ivoire and Ghana in 2024. The Nestlé
Cocoa Plan will continue to expand worldwide, notably in
Brazil, Cameroon, Ecuador, Mexico and Nigeria.
Support for progress toward living income is a focus of the
Nescafé Plan 2030 and will also form part of our strategies
for dairy sourcing.

Table of contents

Coffee berries being
harvested. Both Nescafé
and Nespresso are
implementing living income
initiatives to help ensure
coffee farming families earna living wage.

We strongly believe that farming families
should earn an income that allows them tomaintain a decent standard of living. Overthe years, we have worked to help improve
the livelihoods of smallholder farmers bypromoting income diversification, improving
productivity, empowering women and creating
village savings and loans associations – often
in places with no access to banking services.
In 2022, we took a major step forward.

Nescafé – incentivizing regenerative,
resilient coffee farming

During 2022, Nescafé started pilots in Côte
d’Ivoire, Indonesia and Mexico as part of the
Nescafé Plan 2030. The objective is to help andincentivize smallholder farmers to accelerate
their transition to regenerative agriculture
practices. All pilots include conditional cash
incentives for adopting regenerative agriculture
practices. Other complementary measures
will be added, such as income protection withweather insurance and greater access to credit
lines for farmers. Nescafé will monitor progress
throughout 2023 with support from the impact
assessment partnership with Rainforest
Alliance, as well as specialized partners
such as the Sustainable Food Lab, which isdeveloping capabilities for farmer income
assessment, strategy and progress tracking.

A farmerworking
with
Nespresso’s
AAA
Sustainable
Quality™
Program inIndonesia.

The program is now being tested at scalewith over 10 000 farming households in Côte
d’Ivoire. Cocoa farm productivity is supported
through training, equipping and subsidizing
pruning groups. Agroforestry is supported
by distributing forest and fruit trees, while
additional incomes for women are supported
through setting up village savings and loans
associations combined with gender andentrepreneurship training. In the first year,
10 186 hectares were pruned by 385 pruninggroups, 210 570 forest and fruit trees were
distributed and 17 144 people have alreadybeen registered to receive mobile payments
through the program. KIT Royal Tropical
Institute is evaluating the impact of the
program and we will publish results.

Video: Income
accelerator program“As part of the income accelerator
program, I also received bonuses
which notably enabled me tosend my children to school
and which also enabled
me to take on workers forclearing the field andthe brigade group to
prune the rest of my plot.
So it helped me on
those plans.”Allou Ngoran Aimé
Cocoa farmer in Tafissou

Creating Shared Value and Sustainability Report 2022

36

Supporting tasty
and balanced diets

MICRONUTRIENT FORTIFICATION

Number of servings of
total products and ofaffordable products withmicronutrient fortification*(billion)

Number of servings of total productswith micronutrient fortification
Number of servings of affordable
nutrition with micronutrient fortification

Background
Good nutrition is fundamental to everyone’s
health and well-being. A balanced dietshould provide all the nutrients and hydrationa person needs to remain healthy at theirstage in life, in an affordable and sustainable
manner. Food also brings people together indaily life and on special occasions.
However, many people around the world areeither not getting enough food or eating too
much food with limited nutrients, leading
to malnutrition, undernutrition, vitamin andmineral deficiencies or obesity. Affordability
is a key concern – an estimated three billion
people cannot afford a nutritious diet.
Today, making nutritious and sustainable
food affordable and accessible to all is more
important than ever.
With our extensive portfolio, Nestlé is wellplaced to help address these challenges. We
aim to provide tasty, nutritious and affordable
products to people of all life stages around theworld, while inspiring people to enjoy food that
supports their health. In this way, we can help
bring tasty and balanced diets within the reachof billions of people.

We use our R&D expertise to offer a wide
range of foods, beverages and nutrition
services at scale, helping to bring tasty
and balanced diets within reach forbillions of people across all occasions
and life stages.
Table of contents

Our science-based
approach to nutrition

205.3

Through our R&D organization, we innovatewith purpose to unlock the power of foodfor today and for generations to come. Our
breakthrough discoveries provide the scientificbasis for innovations, from nutrition and healthresearch to food safety, material sciences,
agricultural sciences and packaging. We
translate discoveries into tasty, nutritious,
affordable and sustainable products at our
R&D centers for specific categories, such as
dairy, coffee, culinary, confectionery, infant
nutrition and petcare.
Our innovation focus includes:– Delivering early-life, medical andpet nutritional solutions backed bystrong science– Developing technologies to reduce
nutrients of concern, while innovating more
nutrient-dense products by increasing
positive nutrients and ingredients– Making nutritious products affordable
and delivering technologies for
micronutrient fortification– Providing nutritious plant-based products
across categories, brands and geographies– Strengthening our agriculture sciences
expertise to enable the transition toward
regenerative food systems

207.4**

211.4

128.4**

129.2

2021

2022

120.0

2020

* The ‘big four’ micronutrients are iron,vitamin A, iodine and zinc.
** Number corrected to adjust for someproducts that were reclassified.

SDG CONTRIBUTIONS

Our regional R&D centers in Africa, China,
India, Latin America and Southeast Asia
tailor innovations to local nutritional needs
and preferences.

Creating Shared Value and Sustainability Report 2022

37

Plant-based products
Demand for plant-based products continues to create
opportunities for new products across our portfolio, which
also contribute to our sustainability goals. Our expertisein proteins, nutrition, plant sciences and culinary arts
enables us to develop tasty, nutritious and sustainable
plant-based products across brands, categories, formats
and geographies.

Nestlé viewpoint

Preserving nutritional
goodness from farm to fork

Guiding responsible consumption
Sustainability, affordability
and nutritional value are all
key considerations when
we examine the recipies inour portfolio.

Approach
Our focus is on improving the nutritional value of our
products, on offering the pleasure people look for infood through products that are affordable, nutritious andsustainably produced, and on guiding people toward
responsible consumption where it matters most.

Improving the nutritional value of our products

We are continuously improving the nutritional profile of our
products by adding more whole grains, proteins and fibers
while reducing sugars, sodium and saturated fats – withoutcompromising taste.
We have committed to reduce sodium in frequently
consumed products by 2025 and 2030. The commitment
sets maximum limits of salt for different categories of
products, from noodles to snacks and sauces. Initial
reductions are targeted for the end of 2025 and a second
set of further reductions by 2030.

Nestlé has
committed toreduce sodium
in our global
portfolios by2025 and
2030 in key
categories.
Table of contents

Our peer-reviewed nutrient-profiling system has been
helping us to improve the nutritional value of our
products for decades. We recently incorporated a newfeature to benchmark against the global food supply,using an algorithm published in 2021 (Nutrients. 2021
Feb 9;13(2):576). The algorithm considers five nutrientsrecognized by the World Health Organization: sugar,
saturated fat, sodium, fiber and protein. Defined by dietaryguidelines, this evolved profiling system is the base of ourinternal formulation targets that are category specific andtechnically feasible.
Affordable nutrition
Product access and affordability are more important thanever given the social and economic instability and supply
chain constraints the world is facing. Nestlé remains
committed to providing essential food products in markets
worldwide. Our offer includes widely consumed items such
as Maggi bouillon, dairy products and porridges. Many of
our affordable products contribute to addressing common
deficiencies through micronutrient fortification.

We believe all our products can play a role in a balanced
diet. To guide responsible consumption, we provide
information and services to help people make healthierchoices as part of a balanced diet. Examples include:– Voluntarily implementing evidence-based andgovernment-endorsed front-of-pack nutritional labelingschemes such as the Health Star Rating and Nutri-Score– Carefully designed portion sizes for treats – allowing forindulgence in moderation– Recipes and guidance for pairing our foods with fresh
ingredients to create balanced meals.
Responsible marketing
We advertise our products according to strict policies –
especially when it comes to how we communicate tochildren and how we promote breast-milk substitutes.
These include the Nestlé Marketing Communication toChildren Policy and the Nestlé Policy and Proceduresfor the Implementation of the WHO International Codeof Marketing of Breast Milk Substitutes. In addition, we
publish an annual compliance report on our policy for
implementing the WHO Code on the Marketing of Breast
Milk Substitutes. This report provides insight on Nestlé’srobust WHO Code compliance system and highlights thatwhen cases of non-compliance are discovered, Nestlé takes
swift actions to address them.
Nestlé for Healthier Kids
Child malnutrition remains a key societal challenge that has
many forms: under-nutrition, overweight and obesity, andmicronutrient deficiencies. Over 340 million children andadolescents aged 5-19 are overweight or obese.
With the Nestlé for Healthier Kids program (N4HK), webring together all our efforts to support parents andcaregivers to raise healthier kids and to inspire children
themselves. Through nutrition education and services, wehelp promote balanced diets and healthy lifestyle habits
for children aged 3 to 12 years, encouraging kids andparents to:– Eat balanced meals, with more fruits and vegetables– Eat managed portions– Drink water– Be physically active

Petra Klassen Wigger
Global Scientific Advisor Nutrition
and Health

Why nutritional quality needs to beaddressed holistically.
To explore external and diverse scientific perspectives onnutrition and health, in 2022 we hosted the 15th editionof the Nestlé International Nutrition Symposium at Nestlé
Research in Switzerland.
It is well acknowledged that we can only meet the needsof a growing world population through innovation, while
helping to protect the environment and tackle climatechange. The interconnectedness of these topics led us
to choose the theme “Preserving nutritional goodness
from farm to fork”. More than 20 leading inter-disciplinary
experts from around the globe shared current scientificevidence, with a view to driving action on how we produce
and provide healthy, affordable, sustainable and culturally
acceptable diets for all.
There was a consensus on the urgency of providing
nutrient-dense foods that are affordable and produced ina sustainable manner. Experts concluded that nutritional
value should be considered from farm level, sinceagronomic practices and technologies can help maintainand enhance the nutritional quality of the raw materials
we use in our products. For example, growing biofortified
wheat in Ethiopia can help ensure that at-risk children get
enough zinc.
Nutrient profiling is a great tool for improving nutrient
density, taking into account local context including dietaryguidelines. During the symposium, a panel of experts
concluded that fortifying foods with locally relevant
micronutrients remains a cost-effective strategy to address
micronutrient deficiencies and gaps for vulnerable andmarginalized populations. Adequate processing andtechnologies can help preserve or even enhance nutritional
value, for example by improving micronutrient availability
while providing safe and tasty products.
While increasing dietary diversity and nutrient density are
key aspects in improving diets, managing portion size
also has great potential. Eating more foods that are low inenergy but high in nutrients, such as vegetables and fruits,
while eating less foods that are high in energy is in line withdietary recommendations. Research shows that individual
responses to meals vary greatly between people even when
consuming identical foods. Predicting these responses tofoods and personalizing diets present big opportunities forpreventing illness. However, this approach is not available
or affordable for many people today.
Translating all this knowledge into action requires a crossfunctional food systems approach that delivers innovative
solutions. These solutions must be evidence based,
adapted to the local economic and cultural context andable to address challenges related to climate change, a
growing world population and increasing malnutrition,
while effectively managing trade offs. Additionally, there isneed for collective action from governments and privatesector companies. We remain inspired by the insightfulpresentations and interactions and motivated to continue
working together in transitioning to regenerative foodsystems that provide balanced and affordable diets.

“Even with all the challenges that are facing
the world today, I do think we can feed a world
population of 9 to 10 billion healthily, sustainably
and equitably. We need action on all fronts:
modify diets, increase production, reduce waste
and improve food governance. If we fail on food wefail on everything.”
Sir Professor Charles Godfrey
Keynote speaker at the Nestlé International Nutrition Symposium

Creating Shared Value and Sustainability Report 2022

38

Transparency on
our portfolio
Nestlé is the first company
to use the Health Star Rating(HSR) system as the basis
for transparently reporting
nutritional values for our entire
global portfolio.
HSR is a well-respected nutrient profilingsystem used on front-of-pack nutrition labels
in some countries and applied by the Access to
Nutrition Initiative (ATNI). HSR rates products on
the total energy, saturated fat, sodium and sugar
content, which can lower the score, as well as
the fibre, protein, fruit, vegetables, nuts andlegumes content, which can increase the score.
We believe that all products can play a role in abalanced diet. Given our broad global portfolio,
we provide visibility of the nutritional value offour different groups of products:– Products with a calculated HSR of less than
1.5. These products are occasional treatseaten in moderation, with portion guidance,
recipes, tips and advice for balanced diets– Products with a calculated HSR of 1.5 to lessthan 3.5. We aim to improve the nutritional
value while providing portion guidance,
recipes, tips, and advice for balanced diets– Products with a calculated HSR of 3.5
or above. We keep or even improve thenutritional value with positive nutrients suchas whole grains and vegetables– Specialized nutrition products sold by our
Nutrition and Nestlé Health Science (NHS)
businesses, which provide specific ortargeted nutrition benefits and for which the
HSR system generally does not apply

Table of contents

Reporting on nutritional value atmarket level

For the first two groups, what we call ouroccasional enjoyment related categories,
we complement our actions with stricter
responsible marketing practices. We also
provide nutrition education programs, services
and support covering all categories, to help
people make informed choices and enjoy all
foods as part of a balanced diet.
As PetCare is an important category for Nestlé,
for additional transparency we report two setsof figures, one excluding PetCare sales within
the Specialized nutrition category and one
including PetCare sales.
In 2022, 37% of net sales excluding PetCarecame from products with a HSR of 3.5 orabove and 20% from products for meeting
specialized nutrition needs.
The nutritional
value ofour portfolio*

When
PetCareexcluded from
specialized
nutrition(79% of net
sales covered)

When
PetCareincludedin specialized
nutrition(97% of net
sales covered)

Net sales from products with a Health Star Rating** of:
HSR of less than 1.5

21%

17%

HSR of 1.5 to less than 3.5

22%

18%

HSR of 3.5 or above

37%

30%

Our markets around the world have worked
for years to improve the nutritional value ofour products. For 2022, we are reportingon the nutritional value of local portfolios in
13 countries*, using the local, governmentendorsed nutrient profiling system. The data is
intended to provide a baseline for an individual
country. The figures may evolve as nutrient
profiling systems evolve, and as we continue toimprove the nutritional profile of our products.
Each national and regional nutrient profilingsystem has distinct characteristics, with adifferent purpose and differences in the foods
included, nutrient thresholds, and labels.
Therefore, we report separately on eachcountry as the figures for different countries
cannot be compared. Details of each nutrient
profiling system and how we applied it to ourglobal and local portfolios are available in
our Nutritional Value Transparency Reporting
Scope and Methodology.
EuropeIn France and Germany, the voluntary NutriScore front-of-pack (FOP) scheme is applied.
Products in scope for the Nutri-Score scheme
contribute to 34% of total net sales in France
and 46% of total net sales in Germany.
France (% net sales)
Specialized nutrition

9

Nutri-Score A

17

Nutri-Score B

3

Nutri-Score C

4

Nutri-Score D

3

Nutri-Score E

7

Other**

57

In the UK, 69% of our portfolio is in scope
for the UK Nutrient Profiling Model, whichassigns foods as either ‘High in Fat, Sugarand Salt’ (HFSS), or not. This model is not a
FOP labelling scheme. Most of our products
in scope of the UK system are classified
favourably as “non-HFSS”.

20%

57%

net sales (excluding
PetCare) with HSR
of 3.5 or above orSpecialized nutrition* Excludes products that are not foods or beverages for
consumption, and some recent acquisitions.
** Health Star Ratings are calculated based on the recipe
for each product and are not necessarily included on the
product label.

6

Nutri-Score A

3

Nutri-Score B

11

Nutri-Score C

19

Nutri-Score D

7

Nutri-Score E

6

Other**

48

Specialized nutrition

9

0 Warning legends

37

1 Warning legends

15

UK (% net sales)

2 Warning legends

33

Specialized nutrition

8

Specialized nutrition

4

3 Warning legends

0

Healthier Choice43

Non-HFSS

42

Other**

6

No Logo

44

HFSS

27

Other**

5

Other**

27

Asia and Oceania
In Australia and New Zealand, the HealthStar Rating (HSR) FOP scheme is voluntarily
applied. Products in scope for the HSR
contribute to 51% of total net sales in thesetwo countries.
Australia/New Zealand(% net sales)
Specialized nutrition

8

HSR 3.5 and above

14

HSR between 1.5 and 3.0

17

HSR less than 1.5

20

Other**

41

In Malaysia, the Healthier Choice Logo system isapplied. This voluntary system provides specificnutrition criteria for a range of categories, and
56% of net sales in Malaysia are from products
in scope for the scheme.

Malaysia (% net sales)
Specialized nutrition

10

Healthier Choice12

No Logo44

Other**

34

Germany (% net sales)
Specialized nutrition

Brazil (% net sales)

Singapore (% net sales)

In Thailand, the Healthier Choice Logo system
is applied. This system provides specificnutrition criteria for a range of categories, and
74% of net sales in Thailand are from products
in scope for the scheme.

Thailand (% net sales)
Specialized nutrition

10

Healthier Choice31

No Logo43

Other**

16

Latin America
Several Latin American countries have
implemented mandatory nutritional labelling
schemes based on nutrient-specific warning
legends. Although these appear similar, eachcountry has specific criteria. For example,
the energy content of foods and beverages
is a separate criterion in Argentina, Chile andMexico only.
In Argentina, the front-of-pack legislation willtake effect in May 2023.

Argentina (% net sales)

35%

In Brazil, the front-of-pack legislation will takeeffect in October 2023.

UK GOVERNMENTNUTRIENT PROFILING MODEL

Net sales from products where HSR is not applied:
Specialized nutrition

In Singapore, the Healthier Choice Symbol
system is applied. This voluntary systemprovides specific nutrition criteria for a range ofcategories, and 87% of net sales in Singapore
are from products in scope for the scheme.

Specialized nutrition

3

0 Warning legends

33

1 Warning legends

8

2 Warning legends

4

3 Warning legends

2

4 Warning legends

4

5 Warning legends

0

Other**

46

In Chile, specialized nutrition products andfoods and beverages without warning legends
represent 37% of our sales.

Chile (% net sales)
Specialized nutrition

4

0 Warning legends

33

1 Warning legends

11

2 Warning legends

13

3 Warning legends

26

4 Warning legends<1

Other**

13

In Mexico, the implementation of warning
legends has started in October 2020.

Mexico (% net sales)
Specialized nutrition

18

0 Warning legends

40

1 Warning legends

5

2 Warning legends

13

3 Warning legends

5

4 Warning legends

0

5 Warning legends

0

Other**

19

In Peru, specialized nutrition products andfoods and beverages without warning legends
represent 35% of our sales.

Peru (% net sales)
Specialized nutrition

6

0 Warning legends

29

1 Warning legends

14

2 Warning legends

42

3 Warning legends

0

Other**

9

Some market-level figures have been rounded to achieve 100% for each country.
* We originally planned to report on 14 countries including Colombia, which due to changes in
the government-endorsed profiling system in December 2022 will now be included in future reporting.
**Other: Products from our PetCare business, non-food items such as coffee machines, and food products not in scope for the local nutrient profiling system,
such as pure coffee in some cases. The detailed scope of assessed products in each country is available in our Nutritional Value Transparency Reporting Scope and Methodology.

Creating Shared Value and Sustainability Report 2022

39

Affordable nutrition

Purina launched Pro Plan
during 2022 – a multiformat pet food supplement
to support pets’ health.

In Brazil, Nestlé launched
two ceral bars co-createdwith young people in a
Sao Paulo favela and NGO
Gerando Falcões.

In Pakistan, children
are often iron deficient,which is why we launched
Bunyad Iron+.

Performance
We continue to make progress in each area of
our approach.

Improving the nutritional value of our products

In 2022, we reduced the sodium content in products,
including our Malher Chicken Noodle Soup Fortified andMahler Seafood Creamy Soup. We will report measurable
progress in line with our sodium reduction commitment in
the future. Product innovation is helping us to reduce sugarin our products while still providing great taste. For example,
our Coffee Mate brand in North America has expanded
its zero-sugar range to eight varieties in the last year, and
our Starbucks brand launched Starbucks Zero with 0g
added sugars.
In the United States, our Lean Cuisine brand offers four
frozen meals certified by the American Heart Association
as meeting its standards for fat, sodium and cholesterollevels. While many factors affect heart disease, diets low insaturated fat and cholesterol may reduce the risk.
To meet toddlers’ unique nutritional needs, we introduced
Gerber Powerblend cereals in China and India. These are
made from diverse food groups such as whole grains,

Table of contents

legumes, milk and fruits. In Nigeria, our Golden Morn cereal
brand contains over 50% whole grains, is fortified withessential nutrients such as vitamin A and iron and is mainly
made from locally sourced ingredients. Overall, 91% of ourcereal products and 99% of our cereal products aimed at kids
and teens have whole grains as the number one ingredient.
In the spring of 2022, the United States experienced asevere infant formula shortage following a recall of anothermanufacturer’s products. We accelerated production andin May 2022 flew 500 000 bottle equivalents of Nestlé
Health Science’s Alfamino Infant and Alfamino Junior and amillion bottle equivalents of Gerber Good Start Extensive HA– all for babies with cow’s milk protein allergies. This wasfollowed by many more shipments of specialized and nonspecialized Nestlé infant formula, including NAN Supreme
pro and Gerber Gentle.
For cats and dogs, we launched Purina Pro Plan supplements– in multiple formats such as oils, powders and tablets – tosupport mobility, immunity, vitality, healthy skin and coat.

We provided 211.4 billion servings of micronutrient fortified
products from iconic brands such as Maggi, Bear Brand
and Nido in 2022. This total includes 129.2 billion servingsof affordable nutrition. New offerings included affordable,
medium-fat milk powder launched in South Africa, whichis enhanced with locally sourced ingredients containing
calcium, iron, vitamins and zinc. In Pakistan, where one in
two children are iron deficient, we launched Bunyad Iron+,an affordable dairy-based drink fortified with a new sourceof iron that is about three times better absorbed by the
body compared with existing sources.
In Brazil, the Gerando Falcões Fruit and Nut bar was
launched as the first social product from Nestlé. All the
profits were destined to help the lives of residents from
more than four large favelas in Brazil, distributed in three
regions: Maceió, Rio de Janeiro and São Paulo. To date,sales of the bar have generated nearly B$ 200 000 (overCHF 33 000) to help the organization improve lives in
Brazil’s favelas.

Plant-based products

Garden Gourmet
launched theirplant-based
schnitzel in 2022.

Plant-based products generated sales of aroundCHF 1 billion in 2022, posting high single-digit organic
growth. Recent launches include soy-based Milo in
Thailand, Nestlé Veggie plant-based product with probiotics
in Chile, Garden Gourmet Schnitzel in Europe, Garden
Gourmet Voie Gras – an alternative to foie gras – in Spainand Switzerland, and the Gerber Plant-tastic range oforganic foods and snacks for toddlers in Europe andthe United States.
Following the 2021 launch of WUNDA Professional Barista,
our foodservice division Nestlé Professional expanded
its boundaries and launched two new plant-based dairy
alternative products in Greater China offering out-ofhome operators the “By Barista For Barista” oat and pea
versions for hot and cold beverage applications. In Brazil
and Chile, Nestlé Professional launched the Barista Oat
dairy alternative, as well as an innovative powderedplant-based creamer designed for our Nescafé automatic
machines offer.
Our plant-based strategy is not only about creating meatand dairy alternatives. The popular Maggi Veggie Masala
Noodles have the same taste as the original but now
include carrots and beans. Plus, Maggi offers recipes
to cook delicious plant-based meals from scratch.
Plant‑based versions of Wagner Piccolinis provide veganand vegetarian options.
In Latin America, under the Malher brand, we piloted
a powdered, shelf-stable, plant-based protein blend tocomplement egg dishes in a nutritious and affordable way.
When cooking scrambled eggs, omelets and batters, thesoy-based Huevo Más can replace some eggs, but with anequal amount of protein, fewer calories, less cholesteroland saturated fats.

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40

Guiding responsible consumption

To help people enjoy our products as part of a balanced
diet, in 2022 we continued the rollout of The Backstory,
our new on-pack communication system. The Backstory
allows our brands to tell purpose-driven stories on the backof our packs while better organizing all required productinformation, ensuring transparent nutritional informationand providing portion guidance.

31

Countries
with breastmilk substitutecompliance audits(24 in 2021)

We also continued to roll out our digital services. These
include MyMenuplan, where users can create and sharebalanced meals and shop for ingredients. Now available
via 23 websites in different countries, new functionality in
2022 included personal nutritional statistics such as protein
and macronutrient intakes. In addition, MyMenuIQ is now
available via 30 websites and measures the nutritionalbalance of a meal on a scale from 0 to 100 to help people
combine foods for nutritional balance. Finally, five markets
have introduced chatbots to help people find a recipe to use
up ingredients they already have.

Responsible marketing

In 2022, we announced plans to update our Marketing
Communication to Children Policy with a commitment
not to market confectionery, ice cream or water-based
beverages with added sugars to children below 16 years ofage, becoming one of the first in the industry to adopt such
strict standards. There were no material sanctions over CHF
10 million due to products’ labeling or marketing violations
We identified 116 cases of non-compliance with our breastmilk substitute marketing code in 2022. By January 2023,
we had implemented and published our updated policy on
the responsible marketing of breastmilk substitutes witha commitment to unilaterally stop the promotion of infant
formula globally for babies aged 0-6 months.

Nestlé for Healthier Kids
Activities in 2022 included the Nestlé Wellness Campus(NWC), our 10-year flagship school program in thePhilippines, run in collaboration with the Philippine
Department of Education. NWC continued to empower
students, parents and teachers to live healthier lives
throughout the COVID-19 pandemic using online learning
modules. New topics introduced in 2022 in addition to
nutrition included sustainability and waste management.
NWC now reaches more than 10.5 million students in over
20 000 schools.
In Hungary, after a successful pilot, we launched anationwide educational challenge called Etesd az Eszed(Feed your brain), in cooperation with Okos Doboz (SmartBox), the largest Hungarian digital education platform.
The campaign is aimed at increasing children’s knowledgeof healthy lifestyles, nutrition and sustainability. Since
the project’s inception, children have solved more than
127 000 tasks.

The Nestlé Wellness
Campus, now reaches morethan 10.5 million students
in 20 000 schools, teaching
topics such as nutrition,
sustainability and waste
management.

Nestlé Professional and Worldchefs inspire children to eat
healthier. Through a series of events, around 3800 chefs
engaged children on the impact food production andconsumption has on the environment. This year’s theme –Growing a Healthy Future – reached over 95 600 children.

Compliance with the Nestlé Marketing Communication toChildren Policy*
Channel

2021

2022

TV

98.7%

98.4%

Websites

100%

100%

Social media

83.4%

100%

Influencers**

100%

37.5%

Total

95.5%

83.9%

Engaging the culinary profession
Nestlé Professional continued to support various training
and awareness initiatives. Together with the Culinary Arts
Academy Switzerland, Nestlé Professional ran a masterclassfor a Culinary Business Management masters degree
program on nutrition, plant-based, and sustainability topics.

Table of contents

Outlook* For this reporting year,
EU pledge monitoring
results for TV, Influencers,
Websites and Social Media
are used as a proxy for theCompliance with Nestlé
Marketing Communication
to Children Policy. We willkeep using recognizedmonitoring systems toreport against this KPI.
** 100% of the audited
influencers’ posts wereassessed as not appealing
to children below 13 years.
Following a change inmethodology, breaches
for posts not targeted tochildren are also included.

We will continue our efforts to contribute to tasty andbalanced diets. Our evolved nutrient profiling system
will guide us for innovations and help us to further
improve our products through adding more wholegrain,fiber and micronutrients, while reducing sugars, sodium
and saturated fats. We will also continue to address
the varying needs across life stages while keeping our
focus on affordable nutrition. To support the responsible
consumption of treats, we will strengthen our efforts onproviding portion guidance and complementary nutrition
information on pack and through our services. For
continued transparency we will continue to communicate
the nutritional value across the portfolio globally and for arange of countries.

What’s on yourplate kids?
As part of Nestlé for Healthier
Kids, our Nutriplato initiative has
been helping to bring a balanced
diet within reach for thousandsof people in several European
countries, including France, Italy,
Romania and Spain, as well as in
Latin America for five years.
The objective is to help families to eat welland teach their children good nutritional
habits by creating tasty, balanced and varied
meals with portion sizes adapted to the ageof their children. The principle is that meals
should contain a large portion of vegetables,
a protein-rich food (meat, eggs, fish, lentils
or beans) and a portion of either wholegrain
pasta, brown rice or potatoes. The Nutriplato
kit helps people to visualize how much foodfrom each of these food groups they should
aim to eat. It consists of a plate illustrated toshow the space each food group should takeup and a booklet containing science-based
nutritional guidance and seasonal recipes thatare quick and easy to prepare.

As a complement to Nutriplato, in 2022, ourSouth-East European Market launched the
VeggiePlate, to help people make the switch
to a balanced plant-based diet. Developedwith scientific support from the RomanianFoundation for Healthy Eating, the VeggiePlate
uses the same principle of visualising thespace that different plant-based foods shouldtake up on the plate.
A six-month campaign promoting the initiative
included a social media challenge for people toeat plant-based foods on #3outof7 days, plus
a tasting event, expert interviews, a video andtwo conferences attended by 1800 healthcare
professionals. The campaign garnered great
coverage, with 83 separate independent items
about VeggiePlate published online, in print
or in broadcast media, reaching around three
million people in a week.
Originally launched in Romania, the campaign
is now also active in Bosnia and Herzegovina,
Bulgaria, Croatia and Serbia. To be more
inclusive, both Nutriplate and VeggiePlatenutritional guides are available in Braillealphabet and audio versions in Romania, andas of 2023 also in Bulgaria, to increase accessfor people with visual impairments.

Using the plate itself asa guide, VeggiePlate
indicates the proportionof vegetables and healthyprotein-rich foods andcarbohydrates to adults
and families in a fun,actionable way.

Results from a survey in Spain in March 2022
showed that in that country:– 94% of participants rate Nutriplato as a goodor very good approach– 92% of participants said that they hadchanged their nutritional habits thanks
to Nutriplato
Around 6000 healthcare professionals areusing Nutriplato to guide their patients.

Creating Shared Value and Sustainability Report 2022

41

Food safety
and quality

Background
High standards of food safety and quality are
non-negotiable at Nestlé. Quality is integral to our
Corporate Business Principles and embedded in our
purpose and values.

The analytical capabilities of our laboratories enable us tofocus on detecting priority materials such as mineral oils,
microplastics, plant toxins and pesticides. In 2022, Nestlé
markets, laboratories and quality experts received external
recognition from numerous national and international
award schemes.

Approach

Focused on progress

We take care of food safety and quality from field toconsumer homes. We apply international standards infood safety and quality management and help raise thebar in our industry using rigorous processes and leading
scientific techniques. We empower our people to ensure
our products are safe and compliant, enjoyable andnutritious, and in tune with consumer expectations.
Our internal safety and quality processes help us anticipate
and respond to any challenges.
The many factors our food safety and quality systems
must respond to include tightening regulation, changes
to suppliers or ingredients due to factors such as extreme
weather events and geopolitical developments, theintroduction of regenerative agriculture practices and new
packaging materials or systems, and portfolio innovations
such as plant-based products.
We follow international guidelines in relation to risk
management, carefully checking incoming materials,
processes and products in our factories. With more than
800 experts dedicated to specialized analytical testing in
20 industry-leading laboratories worldwide, we perform morethan four million tests a year. And we don’t stop there – wework hard to embed a strong food safety culture throughout
our business, where quality is everyone’s responsibility.
Nestlé experts participate in leading industry forums,
including the Steering Committee and the Stakeholder
Advisory Forum of the Global Food Safety Initiative and the
FSSC Advisory Committee.

Innovations

Safe, high-quality products are at theheart of our purpose to unlock thepower of food to enhance quality oflife for everyone.

Table of contents

Food safety and quality at Nestlé are fueled by scienceand technology and our expertise at the Nestlé Instituteof Food Safety and Analytical Sciences. Digital solutions
are helping us to strengthen key processes, while researchand data analytics can help close gaps in scientificknowledge. In 2022, Nestlé published more than 60 papers
on analytical sciences, food safety research, digital foodsafety and bioanalytics.

By the end of 2022, all inspections and quality control
activities in our manufacturing process were digitized,
improving our ability to prevent defects. We now use
predictive analytics to assess quality risks related tosuppliers and incoming raw materials, and to provide
early warning of potential problems. Beyond our suppliers,
we support external initiatives to build food safety
capabilities globally.
If an incident occurs, we take immediate steps to address it
to prevent repeat occurrences, including a thorough analysis
to identify root causes. The most significant example in 2022
related to the tragic outbreak of Hemolytic Uremic Syndrome(HUS) in France and a potential link to Buitoni Fraich’Up
pizza. We immediately conducted a voluntary recall of all
Fraich’Up pizzas, suspended production, and rolled out an
extensive information campaign aimed at consumers and ourcustomers. Naturally, we fully cooperated with the authorities
to understand the origin of the contamination. Our deepest
sympathies are with the people affected.
In 2022, 98% of our manufacturing and R&D sites werecertified to FSSC22000 – a program recognized by the
Global Food Safety Initiative (GFSI). Of tier-1 supplierfacilities, 91.9% were certified to a similar program. In ourown operations, 100% of corrective actions were addressed
and managed within agreed timeframes. There were 10
product recalls with a potential or actual food safety impact,with foreign bodies and microbiological deviations being
the main causes (2021: 9 recalls).

Outlook
We will continue to reinforce our quality and food safety
culture across the organization, working to continue
strengthening competences, perform more frequent andtargeted testing, enhance verification, stay alert to thelatest research findings in critical risk areas and adapt our
protocols as appropriate, and to make better use of data to
predict and detect potential incidents.

91.9%

Ingredients sourced
from Tier 1 supplierfacilities certified toa GFSI-recognized
food safety
certification program(2021: 88%)

GFSI audits in
our facilities
Major and minor
non-conformance rate
2.85

2.77

2021

2022

Major non-conformancecorrective action rate
4.25

2.14

2021

2022

Minor non-conformancecorrective action rate
1.56

1.52

2021

2022

SDG CONTRIBUTIONSCreating Shared Value and Sustainability Report 2022

42

Packaging andcircularity

VIRGIN PLASTIC REDUCTION

DESIGNED FOR RECYCLING

We aim to reduce ouruse of virgin plastics
by one third by 2025

We aim for >95% of ourplastic packaging to be
designed for recycling
by 2025(versus 2018 baseline)

95%
-4.0%

-10.5%

-8.1%

-33%

81.9%
74.8%

74.9%

2020

2021

BackgroundPackaging helps protect food and beverages, ensure
product quality and safety, and prevent food waste. It canalso provide important information, such as the origins ofingredients and nutritional content.
Globally, the amount of packaging that is inappropriately
created or managed at the end of its life is a serious andpersistent environmental problem. Inappropriate waste
management can also create hazardous conditions forpeople. Reducing packaging waste, increasing reusability
and recyclability, and managing recovered materials
effectively is therefore critical for society.
The infrastructure to collect, sort and reuse or recycle
packaging varies not only by country but also bymunicipality. While packaging recycling schemes in a
few countries have helped to start a circular economy forrecovered materials, many regions are not yet at this stage.
By year-end 2022, we saw Extended Producer
Responsibility (EPR) laws on packaging active in morethan 70 national and local jurisdictions, with an additional
40 laws currently discussing draft legislation on the
topic. These laws, if well designed, could help develop
the necessary infrastructure to collect, sort and recycle
packaging materials.

Packaging waste management is anarea of major concern for society. We areworking toward a future where none of
our packaging ends up in landfill or as
litter in the environment.

Table of contents

With other consumer goods companies, we are making
the sustainable transformation of our packaging an urgent
priority. Improving packaging design, production processes,
reuse and recycling rates and end-of-life management cantherefore make a notable impact on our efforts to reachnet zero emissions by 2050. Packaging is essential to us
and with innovation we are working to minimize the related
environmental impacts.

2018

2020

2022

2021

2025

2022

2025

REUSABLE OR RECYCLABLE

PACKAGING PIECES

Percentage of packaging
that is reusable, recyclable
or compostable*

Packaging pieces placed on
the market(billion)

352

344**

330

85.8%
(85.4% in 2021)

2020

2021

2022

SDG CONTRIBUTIONSOur Reporting Scope andMethodology for ESG KPIs
document provides details
and definitions and can befound here
* Based on the Ellen MacArthur
Foundation Global Commitment
reporting rules** Restated due toacquisitions, divesturesand packaging changes.

Creating Shared Value and Sustainability Report 2022

43

External viewpoint

Approach
Our vision is ambitious: a world in which none of Nestlé’s
packaging, including plastics, ends up in landfill or as litter.

A coalition toclose the loop

We are part of the Ellen MacArthur Foundation’s New
Plastics Economy – an initiative that mobilized the first
voluntary industry action in 2017 – and we have pledged towork as an industry to create a circular economy for plastic.
The first steps are the elimination of unnecessary andproblematic plastic in our packaging. We are also aiming to
reduce virgin plastics by one third and to design above 95%
of our plastic packaging for recycling by 2025.
As a signatory of the Ellen MacArthur Foundation Global
Commitment, we now aim to design above 95% of our
packaging for acceptance in recycling systems by 2025. We
remain committed to getting to 100%. The Commitment’s
success depends not only on our product design, but also
on the development of infrastructure for collection, sorting
and reuse and recycling around the world, particularly for
flexible plastics. Governments have made strong progressin waste management infrastructure development, but
the scale does not yet match the need. This is why wehave restated our commitment in terms that we candirectly impact – design for recycling systems and virginplastics reductions.

Action on plastic waste
Ignacio Gavilan
Director Sustainability,
Consumer Goods Forum
Quality Street introduced
paper-based packaging
for its twist-wrappedsweets worldwide, joining
Smarties, which switched topaper packaging worldwide
in 2021.

Packaging sustainability
innovation
Packaging innovation takes on many forms and is acornerstone to deliver Nestlé’s packaging sustainability
vision. While every innovation in packaging may beunique, they are all required to deliver a balance between
performance, cost and environmental impact, while
ensuring the safety and quality of the products they protect.
Our culture of innovation has been recognized for example
by Fast Company, which named Nestlé USA among theBest Workplaces for Innovators in Sustainability for our
expanded sustainability efforts in recent years and thecreation of new recyclable packaging.

Our intention is to follow the nine Golden Design Rulesof the Consumer Goods Forum’s Plastic Waste Coalitionof Action – voluntary, independent and time-boundcommitments to which all members are aligned in orderto move toward a circular model. One of these rules is to“remove problematic elements from packaging”. We haveidentified several plastic types (including polystyrene) thatare unlikely to be included in municipal recycling systems
around the world and are phasing out this “negative list”
of materials from our packaging portfolio.

With our global reach of 23 R&D centers and the Nestlé
Institute of Packaging Sciences, Nestlé’s R&D packaging,engineering and material scientists are closely collaboratingwith suppliers, start-ups and universities to accelerateinnovation across all packaging types and materials.

OUR PILLARS

Table of contents

We all know there is a problem with plastic waste.
The scale of the issue globally, the impact it is having
on marine life, its carbon footprint and the long-termbuild up of microplastics in the environment all meanthat we have to act.
As with many sustainability challenges, no single actor
can solve the problem alone. The plastic problem is too
systemic. However, the consumer goods sector is in aposition to deliver impactful industry-led solutions – andit must do so.

Collectively, we are seeking to leverage the power ofcoalition members from around the world who represent
a shared revenue of more than one trillion euros and morethan 10% of the global plastic packaging market.

This is why at the Consumer Goods Forum, we arecommitted to engaging in specific efforts to use less andbetter plastic, and to helping create a better system for
managing plastic.
Since 2018, we have endorsed the Ellen MacArthur
Foundation’s vision for a new plastics economy and havebeen working to share knowledge and create partnerships
with multi-national companies such as Nestlé.

We have five pillars of activity:

Pillar 1:
Less packaging – Reduce
Reducing our useof virgin plastics
packaging material,
removing unnecessary
plastics and increasing
recycled content.

The importance of Nestlé’s membershipof the Consumer Goods Forum.

To date, 40 retailers, consumer brands and packaging
converters in the Consumer Goods Forum’s Plastic Waste
Coalition of Action have worked with industry experts,
recyclers and plastics associations from over 25 countries
to develop the Golden Design Rules for plastic packaging.
Thirty-three leading multi-national companies – including
Nestlé – have now signed up to implement one or moreof these rules across their plastic packaging portfolios by2025. These rules are a set of voluntary, independent andtime-bound commitments that aim to minimize waste,streamline designs and simplify the plastic recycling
process – ultimately increasing recycling.

Pillar 2:
Less packaging – Reuse
and refill
Scaling reusable
packaging and bulk
dispensing systems toeliminate the need for
disposable packaging.

Pillar 3:
Better packaging –Redesign
Pioneering alternative
materials, novel
technologies andinnovative packaging
solutions to facilitate
reuse and recycling.

Pillar 4:
Better System – Recycle
Supporting collection,sorting, reuse andrecycling infrastructure toshape a waste-free future.

Pillar 5:
Better system –Rethinking behaviors
Rethinking mindsets
and behaviors at Nestlé,with retail partners andconsumers.

Improved packaging design
can minimize plastic waste
and improve recycling rates.

Creating Shared Value and Sustainability Report 2022

44

Pillar 1: Less packaging – Reduce

In 2022, Nescafé Dolce Gusto unveiled new capsules thatwill save more than 2500 tonnes of polypropylene thanks
to a 13% plastic weight reduction in the capsules. In
Vietnam, Nescafé reduced the thickness of the laminate in
its Granules Sachets sticks – saving 144 tonnes of plastic
annually (the equivalent of 8 million plastic toothbrushes).
Nestlé Waters, in France, achieved more than 1500
tonnes of plastic reductions following a multi-year weight
optimization program for PET bottles that started in 2018.
Similarly, in Mexico, Nestlé Waters reduced the weight of its
500 mL and 4L PET bottles and the gauge of polyethylene
shrink film, resulting in a 166-tonne saving of plastic
per year.

Nescafé is one of several
brands that significantly
reduced its use ofplastic in 2022, throughproduct redesigns andcompostable pods.

Performance
Nestlé is transforming its packaging systems – moving
beyond peak virgin plastic while our business continues togrow. Virgin plastic in our packaging has reduced by 10.5%
since 2018 (adjusted baseline). At year-end 2022, 81.9% of
our plastic packaging was designed for recycling*.
Several factors have affected the percentage of plastic
types used in our packaging by weight (see table), including
acquisitions and divestments, packaging reduction
initiatives, a shift toward paper packaging, product mix
changes and data quality improvements. These factors
impacted both the quantities and recyclability of our plastic
packaging mix.
Of our total packaging, 85.8% by weight was recyclable orreusable in 2022, based on the Ellen MacArthur Foundation
Global Commitment reporting rules, and 36.0% was madefrom renewable materials.
The above factors, combined with our progress in reducing,rethinking and redesigning packaging for individual
products, resulted in a decrease in the weight of packaging
put on the market to 3.6 million tonnes (2021: 3.8 million
tonnes) and in the number of packaging pieces placed on
the market to 330 billion (2021: 344 billion**).

* As per Ellen MacArthur
Foundation definitions.
** Restated due toacquisitions, divesturesand packaging changes.

Table of contents

In 2022, we advocated for a legally binding UN Treaty on
Plastic Pollution. We supported the launch of a collective
advocacy group, the Business Coalition for a Global Plastics
Treaty. We advocated for well-designed Extended Producer
Responsibility legislation and helped public authorities andstakeholders improve infrastructure with 215 activities andprojects around the world. A selection of projects fromacross our five action pillars are described on the right.

Nestlé Waters also continued to increase the recycledcontent in PET bottles globally. In Egypt, they launched theirfirst rPET-containing bottles, supporting the developmentof a circular packaging system where bottles are collected
and recycled, “bottle-to-bottle”. In the UK, Nestlé Waters
also moved the entire Buxton Natural Mineral Water range
to 100% rPET.

Pillar 2: Less packaging – Reuse and refill

In France, we launched a pilot with Carrefour, testing newrefillable solutions for Nescafé, confectionery and petfood
products in two stores. Also in France, we offered products
in Loop reusable packaging in Carrefour for our brands
Nesquik, Ricoré and Chocapic.
Launched in 2019 and now available in more than 40
countries, ALDO™ is a Nestlé Professional innovation,that dispenses powdered beverages. We neatly bundled
ALDO™ to make it perfect for Nescafé, Milo and Coffee
Mate individual dosing in out-of-home channels, reducing
packaging waste in more than 16 500 locations.

Pillar 3: Better packaging – Redesign

In Latin America, we replaced our printed polystyrene tubs
with designed-for-recycling polypropylene tubs for ourice cream. In Brazil our Mucilon brand pouches have been
converted to mono material. This shift delivered more than
44% CO2e reductions versus the previous film structure. We
also replaced the plastic- and aluminum-layered packaging
of Nesquik with grease-resistant coated paper.
In France, starting in 2021, we began changing thewrappers of organic Maggi bouillon cubes from a multilayer laminate that included aluminum to recyclable andsustainably sourced paper.

Pillar 4: Better System – Recycle

Percentage of global plastic
used in our packaging by
weight and type (% of total)

In Malaysia, Nestlé joined forces with Petaling Jaya City
to launch a door-to-door collection and recycling program
as a voluntary recovery initiative. As of 2022, we havesuccessfully collected over 6140 tonnes of post-consumer
packaging waste, of which nearly 4072 tonnes have beenplastic. This pioneering program has been recognized byboth the United Nations Environment Program (UNEP) andthe Ministry of Environment Malaysia as an example ofseparation-at-source good practice.
In Brazil, Nestlé is collaborating with the non-profit
organization Recicleiros, implementing integrated waste
collection models with local cooperatives. In 2022, thecollaboration extended waste collection into additional
states including Piracaia. With 27 617 inhabitants, Piracaia
had no selective collection infrastructure in place. The
collaboration aims help curb plastic waste leakage andincrease recycling.

Material

2021

2022

PET (Polyester)

32.1%

34.8%

PE (Polyethylene)

18.1%

19.1%

PP (Polypropylene)

19.4%

21.6%

PO (Polyolefin)

5.4%

6.6%

Laminates

24.1%

17.2%

Others0.9%

0.7%

Percentage of packaging
made from recycled and/or
renewable materials**

In Fife, Scotland, Nestlé UK & Ireland partnered with Yes
Recycling to process hard-to-recycle plastics. Nestlé – Yes
Recycling’s first investor – has invested GBP 1.65 million(CHF 1.88 million) toward the site, which started operating
at the end of 2022 and aims to offer a 15 000-tonnes
capacity in the production of an alternative to plywood forthe construction, retail and agriculture industries.

36.0%(39.5% in 2021)** Sustainability Accounting Standards
Board Process Foods Standard FB-PF-410a.1

Pillar 5: Better system – Rethinking behaviors

In Europe, Nespresso extended its RELOVE pilot scheme in
2022, allowing customers to return their coffee machines
to a repair center where they are carefully refurbished andprepared for resale. Refurbished machines were alreadyavailable in Canada and Switzerland, before RELOVE waslaunched in 2021 across Austria, France and the UnitedStates. In 2022, the scheme was expanded to Denmark,Italy, Portugal, Romania and Sweden.

Total weight of packaging(million tonnes)

Total weight of packaging
in million tonnes
Total weight of plastic
packaging in million tonnes

In Italy, Nestlé introduced a digital platform, Dove Lo Butto,
to help consumers identify the nearest location to disposeof their packaging waste appropriately. This is an innovative
digital platform characterized by two functions: barcode
scanning for correct waste disposal and geo-localizationthat links to the rules on waste management of eachmunicipality. In Italy today, every municipality has different
rules for waste disposal because of the various technicaland operational requirements that the local municipal
companies must comply with.

4.5
3.8

0.9

2020

In Germany and Mexico, Nescafé Dolce Gusto launched aconsumer education campaign to promote recycling. In the
United Kingdom, Buxton Natural Mineral Water launched acommunications campaign to raise awareness of its closedloop water bottle to bottle recycling.

3.6

2021

2022

7.7%

Percentage of recycledplastic in plastic packaging

Creating Shared Value and Sustainability Report 2022

45

Fair
circularity

Outlook
We are continuing to transform our packaging systems.
By reducing unnecessary packaging, designing better
packaging, modeling collection systems and supporting
better regulation, we aim to support the packaging systemtransition to deliver no waste in landfills or nature.
To this end, we are clarifying our commitment with a focus
on what we can directly impact – reducing the use ofvirgin plastics, designing out unnecessary and problematic
packaging and designing for reuse and recycling systems.
Strong progress has been made in taking voluntary actions
under our control, but the development of key infrastructure
does not yet match the need.

How Nestlé is promoting
human rights in the informal
waste sector.

We know there is more work ahead in the shift fromvoluntary action to mandatory legislation, enabling afair distribution of responsibility across the value chain.
Because the road ahead will be shaped by more than
voluntary commitments – a shift which might see a UN
Treaty on Plastic Pollution transform the plastics systemfrom voluntary to harmonized and mandatory legislative
frameworks after 2025.

Waste pickers work in the informal waste
sector, some independently and others withinorganized associations or cooperatives.
In many countries, these workers play asubstantial and valuable role in the collection,sorting and recycling of packaging waste andother materials.
At the same time, they are vulnerable to abroad range of serious human rights impacts– meaning that even as recycling delivers
positive environmental impacts, it requires
human rights due diligence from companies
involved in plastics waste or recycling value
chains. As we work to end plastic pollution,
we must also drive toward an inclusive circular
economy for plastics.
As part of Nestlé’s pledge to operationalize
the UN Guiding Principles on Business andHuman Rights – the global standard for how
businesses should ensure respect for humanrights – we made the recognition of the humanrights of informal sector waste workers apriority. As a business, we had been taking
steps to address social impacts in the waste
sector, but we recognized the need for across-value-chain collaborative approach withpartners to tackle these impacts effectively.

Nestlé products being soldin French supermarket
chain Carrefour, where
consumers can use
refillable containers rather
than single-use packaging.

Table of contents

The initiative was formally launched in
November 2022, after over a year of interviews
and workshops with key stakeholders. Looking
forward, it will see us advance by adopting
these guiding principles in our value chains,
reporting annually on our progress, andencouraging other companies to join theinitiative and do the same.

The process was convened by the civil society
organization Tearfund and the Global Allianceof Waste Pickers and Women in Informal
Employment: Globalizing and Organizing(WIEGO). It was facilitated by the nonprofit human rights expert consultancy Shiftand further informed by the perspective

Nestlé supports Pastimber,a Colombian start-up,
led by waste pickers.
It transforms collected
plastic into boards for theconstruction industry –replacing wood.

of informal waste workers. The founding
company members include Nestlé, the CocaCola Company, PepsiCo and Unilever. The
collaboration developed a set of principles toenable the future implementation respecting
the human rights of workers in the informal
waste sector for companies.
The Fair Circularity Initiative aims to bringbusinesses together around these ten priniples
with the aim of ensuring that the human rights
of workers within the informal waste sector
are respected and their role in circular value
chains is recognized. These principles apply
the expectations and responsibilities outlinedin the UN Guiding Principles on Business andHuman Rights specifically to the informal
waste sector.

A Nestlé team visits the
CRER Cooperative in
Madonaldo, Uruguay.
CRER fills an infrastructure
gap, providing vital wastesorting in the community
before sending materials torecycling plants.

“These principles acknowledge the crucialrole waste pickers play in global recycling.
They are an invitation to work together
to ensure these workers are recognized as
legitimate stakeholders, and their rights
are respected – from living income, safe
working conditions, enabling them to havea voice in their futures.”
Jodie Roussell
Nestlé Global Public Affairs and ESG Engagement

The initiative members started joint advocacy
for the inclusion of wastepickers andrecognition of their human rights in the scopeof the UN Treaty on Plastic Pollution in March2022 at the United Nations Environment
Assembly. Our collective efforts successfully
managed to integrate a specific reference
to waste pickers’ rights and interests in the
resolution of the legally binding UN Treaty on
Plastics in 2022.

Creating Shared Value and Sustainability Report 2022

46

Opportunities foryoung people

ECONOMIC OPPORTUNITIESProgress toward helping 10 million young people aroundthe world have access to economic opportunities by 2030
(millions)

Ambition
10.0

Background

5.62

Young people bring fresh ideas and energy to theworkplace. They are a crucial part of any company’s longterm talent pipeline. Yet, globally, some 73 million young
people were either unemployed in 2022 (six million morethan pre-pandemic levels) or had a job that kept themin poverty.
Facilitating youth employment by creating decent andexciting job opportunities is important. It supports respectfor human rights, specifically the right to work, with ‘justand favorable conditions of work and protection against
unemployment’, as set out by the United Nations.
Upskilling young people internally, in our supply chains
and in society in general, is good for us as an organization,for individuals and for communities. As a major employer,
we can make a positive difference by providing employment
as well as digital and physical training and skills
development opportunities.
Supporting young people also brings more diverse
perspectives into our supply chain. Nowhere is that more
relevant than in farming: with young people moving tocities, the average age of farmers in many parts of the worldis now well into the 50s.

Providing jobs for young people,
investing in youth employability andempowering young entrepreneurs helps
us recruit talent and embed sustainable
and regenerative approaches aroundthe world.
Table of contents

Encouraging and supporting young people to pursue
livelihoods in farming is an opportunity to help embed
regenerative agriculture methods from the very start ofworking lives and lay the foundations for more regenerative
food systems in the future.

3.89

Cumulative total
Yearly total

2.45
1.41

0.97

1.04

0.04

0.44
0.40

2017

2018

2019

2020

1.44

2021

1.73

2022

5121

64 977

11 495

1 415 687

Young farmers trained throughthe Nestlé Agripreneurship
Program (7422 in 2021)

Apprenticeship and traineeship
opportunities (11 598 in 2021)

26 610

Nestlé employees hired under
30 years old, unlimited andtemporary contracts

2030

Young entrepreneurs who havereceived some basic but tangible
benefit from Nestlé

Young people impacted throughdigital events (e.g. career
fairs, educational webinars,
e-learning programs) that focus
on upskilling young people andmake them more employable(1 291 306 in 2021)

SDG CONTRIBUTIONS* Delivered specifically throughNestlé needs YOUth initiative.

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47

Two young colleagues in
our East and Southern
Africa region.

Nestlé viewpoint“Working in aninternational team hasreally opened my eyes tothe reality of supply chain
management and given
me priceless experiencein communication.”

Spirit ofsolidarity
Success and limitations

Frédérique Naulette
HR Director Dairy
Category EMENAApproachWith millions of people displaced from
Ukraine, Nestlé has been helping getyoung people’s careers back on track.

Through our Nestlé needs YOUth initiative we create
opportunities for young people. Our initiative has threepillars of activity – Employability, Agripreneurship andEntrepreneurship. At Nestlé, we are committed tohelping 10 million young people gain access to economic
opportunities by 2030.
Under each of the three pillars, we provide access todiverse opportunities. We motivate young people tohelp them prepare for and access the world of work,by providing online training, content and on-the-job
training opportunities to enhance their employability.
We encourage them to become agripreneurs – introducing
them to regenerative agriculture techniques and teachingthem business skills. And we promote entrepreneurshipand entrepreneurial opportunities through our Youth
Entrepreneurship Platform.
Additionally, Nestlé is an active advocate for young people.
In this context we collaborate with external organizations,
including the International Labor Organization, the Global
Apprenticeship Network and the Global Alliance for YOUth.
The Global Alliance for YOUth, co-founded by Nestlé, is abusiness-driven movement of like-minded organizations
passionate about working together to help young people
around the globe get the necessary skills to thrive in theworld of work, today and tomorrow.
We are convinced that by mobilizing the business
community through the Global Alliance, we can help young
people on a larger scale and have a bigger impact than we
can individually.
Global Alliance members offer youth first-job experiences,
run educational programs to enhance young people’s skills
and support young entrepreneurs.

Table of contents

Employment and employability
Providing youth access toeconomic opportunities byoffering jobs, traineeships,
internships, apprenticeships
and training.
Agripreneurship
Encouraging young people tocreate livelihoods as farmers,
to run their farms as businesses
and to embed regenerative
agriculture methods in support
of a just transition to regenerative
food systems.
Entrepreneurship
Driving economic and social
progress by equipping young
people with the skills, experienceand mindset to transform ideas
into viable businesses.

In 2022, soon after the invasion of Ukraine began, we
discussed with the YOUth Steering Committee how we
could further support young Ukrainians – particularly those
who had to flee their country or had their studies curtailed.
We all agreed that we wanted to help not just with productdonations, but by offering young Ukrainians purposeand opportunity.
I’ve worked at Nestlé for 26 years, partly because there is a
spirit that anything is possible. That incredible idea quickly
grew into an internship program. Initially, the plan was tosupport young Ukrainian refugees, but eventually, the scope
expanded to allow students – even those still in Ukraine – toparticipate as well.
Markets, functions and human resources teams were keen
to help and together we managed to secure 34 internships
across 22 countries in Europe and Latin America, in addition
to the existing Nesternship program. To make sure theseplacements were attractive to young people with different
backgrounds and experience levels, we opened positionsin Finance and Control, Key Account Management,
Confectionery, Marketing, Procurement, Supply Chain,
Project Management and the Digital Transformation team.

Since May, we’ve processed 61 applicants, made seven firm
offers for employment to date and I have had the pleasureof seeing two interns start work in Switzerland and France.
We would have moved faster except for two constraints.
First, it was difficult for our Human Resources team in
Ukraine to access candidates. Power outages, building
damage and shelling are a daily reality that hampered
communication with universities to set up the program.
Secondly, there was red tape surrounding work permits.
Luckily, the European Commission stepped in to makepermits easier and faster, while local teams remained
engaged and resilient. I remember speaking to the
Ukrainian Head of Talent in May. She was driving from one
place to another for three hours, looking for a safe place tostay. The whole time she was taking calls on her mobile.
Another colleague had already fled to Poland and wasworking from there.

The bravery of our colleagues

The ability and willingness of Ukrainians to help,
even though their own lives were in danger, is frankly
remarkable. With their help, we were able to reach out
to young people by advertising in Ukrainian. We posted
on LinkedIn and made a short video that reached 99 000
impressions, with 4500 people commenting and engaging.
One of the reasons why this was possible is that students in
Ukraine have access to excellent universities and education
systems. The interns we are interviewing have acquired
diverse skills and speak multiple languages – advantages
that help them fit in immediately at Nestlé. The feedback
about those who have started is overwhelmingly positive,
with their outstanding teamwork and immediate ability toconnect being noted.
I think I’m most proud of the solidarity. What started as an
idea has become a practical platform to empower young
Ukrainians. We chose to offer internships over jobs toensure everyone has the flexibility they need (for example toreturn home). And we have no plans to stop our program:
more interns started in January 2023 and Nestlé willcontinue to recruit and place young people for as long as
Ukrainian students need the extra support.

Vladyslava Hliebova
Intern, Switzerland“I’ve already grownprofessionally andpersonally. I love that
I immediately get to put
everything I study into
practice, developing both
hard and soft skills.”
Zoriana Poperetska
Intern Nestlé Waters,
France“I am really enjoying mytime here. I particularly lovethat I have the opportunity
to learn so much and todevelop myself further.”
Solomiia Zagrychuk
Procurement Intern,
Germany

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48

Performance

Through Nestlé Needs YOU – our initiative in the UnitedStates focused on empowering the next generation to thrive– we partnered with non-profit Girls With Impact to inspire
future female business leaders to pursue their innovativeideas. We awarded 150 scholarships to Girls With Impact’s
Business and Leadership Academy in 2022, and hosted
a “Big Ideas, Better World” competition for women aged
12-29 to submit their business ideas that could help solvepressing challenges in the food and beverage industry.
The winning participant received funds from Nestlé to put
toward her start-up, as well as mentorship from our R+D
Accelerator team in the United States.

We remain on track to help 10 million young people gain
access to economic opportunities by 2030. In 2022, we
succeeded in creating 1.73 million opportunities through the
Nestlé needs YOUth initiative, taking the cumulative total
since announcing our commitment in 2017 to 5.62 million.
At the 2022 United Nations Climate Change Conference,
known as COP27, in November, Nestlé demonstrated how
the youth agenda contributes to the company’s values andwider commitments in a workshop on building responsible
communications.
In May 2022, as a member of the Global Alliance for YOUth,Nestlé partnered with NielsenIQ and the Global Shapers
Community to launch the Global Youth Survey and discuss
its initial findings during the World Economic Forum in
Davos, Switzerland. The survey, focusing on post-COVID-19
young people’s pain points, captured the views of nearly
2000 people aged between 18 and 29, from 19 countries.
The survey focused on four areas of action: inclusive jobs,
sustainability, digital access and mental health. The fullsurvey results are available here.

35 million
Training
opportunities havebeen provided by
the Global Alliancefor YOUth members
since its launch
in 2019

AgripreneurshipResearching together
with academia
The global academic alliances program supports morethan 60 PhD students across the globe. The students thatare currently taking part in the program are made up of
33 different nationalities and are hosted by 41 universitiesin 17 countries worldwide. The program supports students
in two ways. One way is by partnering with academia
through research grants, such as the recently renewed
collaboration with the University of Ghana, to strengthen
local students’ expertise in science and technology.
The second way is to provide students with the opportunity
to build their expertise and work on research projects at
Nestlé R&D facilities. We also offer students the possibility
to focus on developing disruptive food and beverageinnovations and test them in a retail environment in six
months in one of our 14 Nestlé R+D Accelerators acrossthe world, including in Chile, India and the United States.
To round things off, Nestlé has launched the Youth
Entrepreneurship Platform (YEP), a new digital platform
for young innovators and entrepreneurs who want togather knowledge and skills, test an idea or grow theirbusinesses (see case study Harnessing the power ofyoung entrepreneurs).

Table of contents

Young people help
drive innovation at our
R+D Accelerator in
Lausanne, Switzerland.

Through our longstanding Agripreneurship Program wehave engaged 74 077 agripreneurs, including 25 176 under
30, who are training to become future-fit farmers. In dairy
alone, we have trained 17 438 young farmers through ourbasic support program (2018- 2021).
Additionally, our brands continue to bring agripreneurship
into their own sustainability plans. For example, the Nescafé
Plan 2030 will continue to include an agripreneurshipcomponent, continuing and enhancing the activities of theprevious decade.

Entrepreneurship

In August 2022, to consolidate our progress in this area,
we launched the Youth Entrepreneurship Platform (YEP)– a digital home that groups all our innovation activities
and programs in one place (see case study Harnessing
the power of young entrepreneurs). In just over a month,
we had over 11 000 website visitors, with over 5000 young
people registering accounts.
In 2022, 174 000 learning, training or job opportunities werecreated for European youth. In the United States, Nespresso
has been working with Thrive Scholars, a non-profit,
seeking to develop leaders – particularly from black and
Latin backgrounds. In 2022, 20 scholars were sponsored
for a six-year program, with 115 employees engaging
with the program (see external viewpoint Inspiring highachieving students of color from low-income backgrounds).

Young people are
mentored and supported
in acquiring professional
skills in our Nesternshipinternship program.

Employment and employability

Our approach to introducing young people to skills forthriving in modern workplaces is also progressing. In June
2022, Nestlé convened the first NestGen YOUth e-Fest,a two-day online event in all 13 Africa, Oceania and Asia
markets. Some 19 masterclasses were designed to help
upskill today’s youth for the workplace, with 20 speakers
from Google, Microsoft and TikTok joining representatives
from KitKat, Nescafé and Milo to talk on topics including
brand building and content creation. More than 33 000
participants attended, generating social media reach of
7 million with engagement of 234 000 (only the 33 000
attendees count toward our key performance indicator).
Attendees said the event provided good information aboutcareer opportunities within Nestlé.
Digital events emulate an approach pioneered in Pacific
Alliance countries – Mexico, Colombia, Chile and Peru.
These virtual and face-to-face youth forums (The Pacific
Alliance Youth Summit) are now in their seventh year andinvolve the participation and support from the respective
governments, the private sector and non-for-profit
organizations such as UNESCO and the International Labor
Organization. The event in 2022 was hosted in Mexico in
October and attracted the interest of more than 300 000
young people.
A virtual event run by Nestlé Conecta in the Plata region(Argentina, Uruguay and Paraguay) in October 2022,
offering digital and innovation skills, attracted 75 000
unique users. In February 2022, Nestlé Brazil in partnershipwith the Brazilian Alliance for YOUth and MOVER, amovement for racial equity, hosted Nestlé Conecta, an event
aimed at connecting and engaging with young people toprovide training and employability opportunities. This event
attracted more than 40 000 young people.
In China, Nestlé has worked with Tsinghua University
and Imperial College London to explain and discuss oursustainability strategy with thousands of students to help
give them practical insights. In Ecuador, 2800 young
people received career guidance and vocational training
as part of Nestlé Ecuador’s ‘dual training’ model, whichhelps young people to both expand their skills and leverage
employment opportunities.
Our brands have also taken these activities to heart, suchas the S. Pellegrino Young Chef Academy. This brings young
chefs together with influential members of the gastronomic
world to help develop skills and knowledge, build networks
and offer mentorship.
In 2018, Nestlé Professional and Worldchefs launchedWorldchefs Academy, a free online training course foraspiring chefs to take a first step toward a culinary career.
Over 41 000 students have enrolled since the launch; in2022, the number of graduates reached 2365.
In 2022, with our partner Worldchefs, we delivered a seriesof three webinars that were available free of charge to
people interested in the out-of-home industry. Participantsof the webinars have tangible proof of their learning
through a digital badge and certificate that they can add
to their CVs or LinkedIn Profiles. In 2022, over 1000 digitalbadges were issued.
As part of the Nestlé needs YOUth initiative, the Nestlé
Professional YOCUTA (Young Culinary Talents) Program
continues to support future chefs by strengthening their
theoretical and practical culinary skills and preparing
them for a career in foodservice, which is suffering froma shortage of skilled workers worldwide.

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49

Harnessing thepower of young
entrepreneurs

Outlook
We will continue to advocate for young people at all levels– from local communities through to governments andinternational organizations.
Looking ahead, we will also continue to promote andimprove our new Youth Entrepreneurship Platform andaccelerate our efforts to bring young farmers together. We
will seek to create engaging, relevant, content to encourageorganic growth and widen knowledge about the support wecan provide entrepreneurial young people.
We will begin to develop a similar Agripreneurship
Academy to help the next generation of farmers to workin a regenerative way. The academy will address topics
ranging from climate change, agroforestry and soil healthto animal welfare.
Above all, by prioritizing young people in our global
strategic goals and our brands’ individual plans, we cancontinue to make a difference in the lives of millions ofyoung people around the world.

Young farmer Jessica
Ellwood is passionate
about old-style farming
and is already seeing thebenefits of regenerative
farming at her dairy farmin Cumbria, the UK.

Young people are not simply
tomorrow’s workforce. Theirinnovative ideas can transformthe way we work, maximize our
impact and accelerate a justtransition to regenerative global
food systems.
Against the context of youth unemployment,
which significantly increased during the
pandemic, and the rising average age of
farmers, it is crucial we demonstrate Nestléis the natural home for young entrepreneurs
active in the food space. We want to be
a company with a nurturing atmosphere,
renowned for transforming good ideas into
viable businesses that help feed the world andprotect the planet.
To simplify that process and harness goodideas from anywhere, and from anyoneof any background, we created the Youth
Entrepreneurship Platform, or YEP. It is asingle, online location where young people
can be inspired by previous entrepreneurial

Table of contents“As student entrepreneurs,
participating in Nestle’s
accelerator program taught
us so much. Exposure to
this environment has beenreally beneficial for thegrowth of ourselves and ourstartup, and we believe that
platforms like YEP will help
other students and aspiring
entrepreneurs like us accessthese wonderful opportunities
to grow and learn.”initiatives and discover the wide range ofhelp we can offer to bring innovation to life,
whether related to regenerative agriculture,
plant-based products, packaging andcircularity or affordable nutrition.
YEP is a one-stop shop to access standalone
initiatives such as our international network of
14 R+D Accelerators, our online internships or
Nesternships, Purina’s Unleashed accelerator
and wider information about the Nestlé needs
YOUth initiative. This approach effectively
consolidates the full spectrum of our activities
in this area to ensure we get the most out of
budding entrepreneurs rather than engaging
with a single initiative.

Jessica Schwabach and Siwen Deng
Co-founders of Sundial Foods and YEP
platform users

A free learning tool

Access to the site is free. It offers a catalogue
of entrepreneurial case studies, profiles ofyoung innovators we already support, plus ane-learning academy of educational content
and news of workshops, digital events, local
initiatives and training opportunities.

YEP – our Youth
Entrepreneurship
Platform – wasa successful
innovation in 2022.

Young people can attend webinars, accesspersonal mentoring and coaching fromexperienced staff and gain access to earlystage investment, learning from real-life
examples from well-known brands such as
Nescafé, Gerber and Garden Gourmet.
We have big plans for YEP and are building
a community. After an initial social media
campaign that generated 48 000 leads, we
hired a dedicated community manager tomonitor interactions on the platform andprovide targeted, interactive content to further
engage people. Early analysis shows thatpeople visit the site for one hour on average.
Lessons learned from the way this community
develops will inform our plans to build asimilar platform, the Agripreneurship Academy,
to harness innovative ideas for shaping thefarming of the future.

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Our diverse andinclusive culture
BackgroundWe believe that nurturing and promoting a diverse andinclusive culture makes Nestlé a more attractive andexciting organization to work for. By advocating for andembracing inclusion, we are seeking to unleash the fullpotential of our workforce. When they can bring their wholeselves to work, we find our employees feel more engaged,
productive, happier and fulfilled, with a sense of belonging.
Our aim is to cultivate a diverse and inclusive workforce,business culture and leadership. We believe this provides
equal opportunities for everyone to contribute, grow andfeel valued and is characterized by an open-minded spirit
and a profound sense of belonging.
We believe that this approach not only helps our businessbetter reflect the world at large but that it is a powerfulunifying force that can help us to accelerate a just transition
to regenerative food systems.

Nurturing inclusivity enhances employee
well-being and makes us more productive
and innovative – helping us transform
global food systems.

Table of contents

We recognize that we must navigate the complexity ofvarying social and cultural conventions and differing
legislative approaches to diversity and inclusion aroundthe world. This includes political scenarios that are lessfavorable to under-represented groups. We are also
anxious to counter setbacks widely regarded as having
been experienced by under-represented groups during
the COVID-19 pandemic. This included challenges inworking from home, the need to deal with parenting andhomeschooling – with gender equality suffering in particular– and people with some disabilities experiencing challenges
in remote working.

WOMEN IN LEADERSHIP

Target achieved: 30% of our top 200+ senior
executive positions are held by women

25.6%
in 2020
27.2%
in 2021

30.2%

30.2%
in 2022200+ senior
executive are
women

WOMEN IN MANAGEMENT

Middle and senior managementthat are female (%)

43.8%
in 202145.3%
in 202245.3%
Middle and senior
management
are female

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51

ApproachDiversity and inclusion is one of six key areas thatgovern how we manage our people within Group Human
Resources (HR) and Business Services. As such, diversity
and inclusion leadership at Nestlé is embedded in the
HR Leadership team, which includes HR Heads of Zone,
function and business. Diversity and inclusion objectives
are cascaded to their respective markets. Regular updates
are provided to the Executive Management Board andthe Board of Directors, who review progress. We are
evolving from group-led initiatives on these topics tomarket- and brand-led activity, as diversity and inclusion
becomes progressively embedded in individual cultures
and workplaces. We have five diversity and inclusion pillars,
which intersect with each other (e.g. young and disabled).

DIVERSITY AND
INCLUSIONPILLARS ATNESTLÉ
Gender balance
People withdisabilities
LGBTQ+ community
Race and ethnicity
Generations

Gender balance

We are striving to increase the proportion of women in
our top 200+ senior executive posts through our Gender
Balance Acceleration Plan, while our Global Parental
Support Policy extends the rights of caregivers regardlessof gender. We participate in international campaigns such
as International Women’s Day and are proud to have ourprogress externally assessed by the Bloomberg GenderEquality Index.

Participants in a Nestlé
Malaysia and Singapore
youth program.

People with disabilities

When we employ people with disabilities, we aim to
be attentive to their needs – whether their disability isvisible or invisible. We run Employee Resource Groups
focused on people with disabilities and neurodivergence,such as THRIVE, while our NestAbility network aims tocreate an open culture and dialogue around disability. We
promote the inclusion of people with disabilities throughmembership of the ILO Global Business and Disability
Network and have signed The Valuable 500 commitment toelevate disability inclusion to our leadership agenda.

Inspiring high-achieving students ofcolor from low-income backgrounds

LGBTQ+ community

Nestlé supports the United Nations Standards of Conduct
for Business on tackling discrimination against LGBTI
people and is part of the Partnership for Global LGBTI
Equality, the only LGBTQ+-focused organization in theworld where the private sector and civil society sit together
as members. Local LGBTQ+ networks in many Nestlé
markets support colleagues by creating a forum forconversation. We also collaborate with external groups toadvocate for civil rights and workplace protections, develop
our understanding of key issues and create programs thatreflect local contexts.

Race and ethnicity

We strive to advance racial and ethnic inclusion. We
work to eliminate unconscious bias and to appoint local
employees who represent the communities we serve tomanagement positions in the countries we operate in.
Nestlé was a founding member of the World Economic
Forum’s Partnering for Racial Justice in Business initiative.

Steve Stein
CEO, Thrive Scholars

Why Nespresso is supporting inclusion
through Thrive Scholars.
It takes more than good grades and a college degree
to secure an amazing job and build an upwardly mobile
career. In North America, talented students of color from
low-income backgrounds struggle to get into college or
progress onto graduate schools and into the workforce due
to systemic barriers.

Generations

That’s where Thrive Scholars comes in. We help highachieving Black, Latino, and other underrepresented
students with academic advising, career coaching andmentorship to help them excel at top colleges and transition
into professions that lead to economic mobility.

In 2021, we launched the Mentoring For All program tofacilitate knowledge sharing between different generations.
By enhancing curiosity and peer-to-peer learning from eachother’s experiences, this program aims to increase crossgenerational engagement and create a stronger sense ofinclusion and belonging. In our endeavor to support ouremployees in their transition from work to retirement, we
designed and piloted the Life Transition Program in 2022,with employees and champions across eight different
countries. Through this program, we aim to enable ameaningful and purposeful transition and early preparation
regardless of age.

Over our 20 years, we found that college preparation is vitaland that starting early is the key to our success. We engage
Scholars in their junior year of high school with our Summer
Academy: a six-week intensive program over two summersof college-level courses. Throughout our six-year program,our Scholars receive financial support, social-emotional
guidance and career development through our Career
Pathways program. Our career coaching helps Scholars
navigate and leverage opportunities to join the advanced
workforce and become corporate leaders. Through ourprogram, Scholars develop the technical skills and essential
competencies like computer literacy, writing acumen, data
analysis, communication, critical thinking and leadership.
This is why we play an essential part in enhancing diversity
in the workplace.

We have five different generations in our global workforce
and we actively encourage all of them to bring theirdifferent perspectives and knowledge to work.

Table of contents

External viewpoint

We can’t correct disparities in corporate diversity alone– we depend on partners to acknowledge the ongoingproblem and partner with us.
When companies like Nespresso support us, we vastly
strengthen and expand our academic, mentorshipand career development resources to students acrossthe country.
By supporting Thrive Scholars to reach their highest
potential, Nespresso is directly influencing and guiding
the diverse leaders of tomorrow. With the preparation our
Scholars receive, they are in the best position to apply forinternships or full-time employment opportunities that ariseat the company.
Nespresso isn’t just securing a diverse pipeline of future
talent, but also sending a clear message to our Scholars:
they can challenge the makeup of the workforce andthey deserve to work at familiar, aspirational companies
regardless of their ethnicity or economic background.
Nespresso is helping to change the narrative.

“By nurturing Thrive Scholars to be their best selves,
Nespresso is directly influencing and guiding thediverse leaders of tomorrow.”
Steve Stein
CEO, Thrive Scholars

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52

We have continually
improved the genderbalance of our senior andmiddle management inrecent years.

Performance
In 2022, our markets began self-assessing theirimplementation of diversity and inclusion initiatives,
programs and processes through a digital tool. It builds a‘maturity’ profile of their activity, from which they can build
an action plan to target key areas for improvement.
We also initiated a Global Voluntary Self-Identification
Program. This pilot scheme, which ran across four
countries representing 12% of our global workforce,encouraged employees to consent to declared gender,
sexual orientation, race/ethnic identity and disabilities being
linked to their employee profile. This has the potential tosignificantly improve our understanding of our diversity
and inclusion performance, for instance by uncovering any
systemic biases and knowing how diverse we truly are.
The data can help us take more robust and considered
actions to foster greater inclusion. We are exploring how toextend the pilot to other countries, given the sensitivity andlegislation related to collecting, storing and using personal
data in different jurisdictions.
At the end of 2022, 90.8% of our 283 000 employees hadcompleted our sexual harassment training.
A critical factor in building a more inclusive workplaceis understanding that different social categorizations do
not exist in isolation but can overlap with each other.
Intersectionality recognizes, for example, that people canbe part of the LGBTQ+ community and have a disability, or
be a single parent and from an ethnic minority background.
One example is our work to understand how well we aresupporting young people with disabilities through our
Nestlé needs YOUth initiative.

Table of contents

Gender balance

LGBTQ+ community

Nestlé has pledged to help accelerate the pace toward
equal pay for equal work since 2019. To make sure that
men and women performing comparable jobs get equalpay, we make sure that an annual equal pay review isconducted for all markets and they remain responsible foraddressing actions locally and eliminating the conditions
that may create systemic pay gaps. Our 2022 Global Equal
Pay review completed with highly satisfactory results.
No systemic equal pay gap was found within the Group.
Nestlé continues to comply with all disclosures on equal
pay in relevant markets as required by the local legislationand methodologies specified (e.g. United Kingdom,France, Switzerland). For the fourth consecutive year, the“Bloomberg Gender-Equality Index” recognized Nestlé forour transparency in gender reporting.

During Pride Month, in June 2022, a Nestlé global webcast
covering unconscious bias, support in the workplace andmental health was watched live by 1400 employees, withanother 3000 watching a recording afterwards, and reacheda total of 33 000 employees across global and diversity andinclusion groups. Within specific markets, our brands arealso demonstrating their support for LGBTQ+ communities.

As part of our plan to balance the gender makeup of ourworkforce, we are delighted to report that, as of December
31, 2022, 30.2% of our top 200+ senior executive positions
were held by women, up from 27.2% in 2021 and meeting
our commitment. The proportion of women occupying
middle and senior managerial positions increased to 45.3%,
up from 43.8% in 2021.

We continue to advocate for women in our supply chain. In
less developed countries where women are often expected
to fulfill traditional roles, Nestlé has been empowering
women in various ways. For example, thousands of womenin Pakistan have been trained in our dairy supply chain
since 2015.
In Brazil, we supported 10 women farmers in our supply
chain through Masters degrees in Dairy Administration aspart of Nestlé Brazil’s Força da Moça do Campo initiativein 2022. The course is based on the principles of leanmanagement, which focuses on maximizing efficiency,
to help them more effectively manage the 950 cows and
22 000 liters of milk they collectively produce daily. Ten
more women have been identified for 2023.
Nespresso has developed a field-tested gender analysis
tool to help identify the root causes of gender inequality
in coffee farming. The tool is informed by rigorous datacollection and in-depth gender analysis of men and womenin farming households. The insights are used to target
actions – so that women are given access to the resources
they need and are empowered to be part of the decisionmaking process. To advance industry-wide change, the tool
has been made publicly available.

In early 2022, Nestlé USA, Nestlé Health Science and
Nestlé Purina PetCare all received scores of 100 on the
Human Rights Campaign Foundation’s 2022 Corporate
Equality Index. This is the foremost benchmarking
survey and report in the United States measuringcorporate policies and practices related to LGBTQ+
workplace equality.

Race and ethnicity

For the first time, Nestlé USA began disclosing pay gaps
based on race, ethnicity and disability as well as gender.
As a result, Nestlé USA has reported pay equity in underrepresented minority employee salaries for the first time(2021 data, disclosed in 2022).

People with disabilities

Our efforts to embed an inclusive culture for people withdisabilities were recognized in the 2022 Disability Equality
Index of the Best Places to Work, an initiative between theAmerican Association of People with Disabilities and nonprofit group Disability:IN. It recognized Nestlé USA and
Nestlé Purina PetCare with scores of 100%.

Nespresso’s partnershipwith Café Joyeux, which
employs people withdisabilities, launched inJuly 2022.

In October 2022, Nestlé in Spain and Fundación Universia
launched the second iteration of the IN-Tech program,
aimed at university students with disabilities, to help themdevelop IT skills and gain workplace experience.
In Brazil, we launched a limited edition range of biscuits:
Nestlé Passatempo Libras. It comes with the National
Deaf Alphabet on biscuits, helping families to learn Libras(Brazilian sign language) while having fun and eating. We
also launched a website with additional Libras content.
In France, Nespresso announced a partnership with Café
Joyeux, which employs people with disabilities in Paris.
A portion of proceeds from a specially developed blendof coffee will go to the café, helping it sustain 40 jobs for
one year.

Nestlé employees celebrate
at Brighton Pride in the UK.

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53

Creative
first steps

Outlook
Building a culture of inclusion where everybody feels they
belong will always be a moving target as society evolves,
reacts and responds to wider change. We will always
encourage employees to stay vocal about emerging
challenges to inclusion and we remain open to newopportunities to celebrate diversity.
In 2023, we will launch guidelines for brands to help
them speak more inclusively in their marketing andcommunications. This will help our market teams to create
advertising and other promotional activities that reflect
local contexts and align with our wider goals on diversity
and inclusion.
From 2023, Nespresso AAA Sustainable Quality™ Program
Gender Equality Index will measure progress against ten
KPIs in three categories. These tools will guide Nespresso’sinterventions in the various AAA countries. In line with
Nespresso’s gender equality strategy, it will strive toincrease the number of female agronomists to 40% by
2025 and 50% by 2030. Having achieved our commitment
to increase the percentage of women in our top 200+
executive positions to 30%, we will continue our efforts toaim for parity in all management positions.

How we are helping First
Nations content creators
kickstart their careersin Australia.
Nestlé Oceania has recently launched an
initiative to help aspiring First Nations –Aboriginal and Torres Strait Islander Peoples –content creators to choose their career path.
A participant in
our youth programin Bangladesh.

The idea to link the world of content creation,
production and media with some of Australia’s
biggest brands and media companies wasborn in 2020, when Nestlé Australia struggled
to find a crew of First Nations videographers,
stylists and producers to create content
for a National Aboriginal and Islander Day
Observance Committee Week campaign.
It quickly became apparent that there was a
distinct under-representation of First Nations
creatives in this space, which prompted Nestlé
Australia to consider how they could foster
better opportunities for emerging talent tobreak into the industry.

Video:
Tuck in!

Nestlé is bringing
together young
creatives andestablished First
Nations chefs in its
Tuck in! program

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Nestlé supports the Girls
Academy in Australia,
which helps educate young
First Nations women.

Tuck In!

Against this backdrop, and after two yearsof behind-the-scenes preparation, the aptly
named Tuck In! program began in July 2022.
The initiative brings together established First
Nations chefs with would-be content creators
to develop recipes and video content thatcelebrates the combination of bush foods and
Nestlé products.
For the first project, two brands - Nescafé
Blend 43 and Nestlé Sweetened Condensed
Milk – partnered with Gamilaraay chef Keith
Munro from a Sydney-based restaurant
to create recipes including macadamia
amaretti biscuits and coffee, wattleseed andbanana loaf.
The video content – produced withprofessional media and creative support – wasbrought to life by selected Australian Film,

Television and Radio School graduates, withwork experience also going to graduates from
our Aboriginal and Torres Strait Islander Youth
Development Program (AYDP).

Seeing is believing

The resulting content was communicatedacross Nestlé’s network of news and foodwebsites and social media channels –celebrating Aboriginal culture through native
ingredients, encouraging home cooks to try
bush foods and supporting the visibility anddevelopment of First Nations creatives.
The aim is that the program will become anannual initiative, giving ongoing opportunities
in line with Nestlé’s vision to unlock the powerof food to enhance the quality of life for all insupport of a just, equitable and unified future.

First Nations Australians

First Nations are the first peoples of Australia.
And while they represent 3.2% of the resident
population, these indigenous communities
often suffer disproportionate social andeconomic disadvantages.
Nestlé has long supported First Peoples as the
traditional owners of the lands where we live
and work and we are committed to deepening
understanding of the richness and diversityof their culture and values both inside andoutside the company.
Nestlé has joined a network of over 1100
corporate, government and not-forprofit organizations that have made aformal commitment to reconciliation andstrengthening relationships with First Peoples
through a Reconciliation Action Plan, where
the AYDP remains the flagship program.
In 2010, Nestlé launched its Aboriginal andTorres Strait Islander Youth Development
Program, which recognizes the importanceof educating women in creating resilient
communities. In partnership with First Nations
education program Girls Academy, we havealready supported the education of over 11 000
Aboriginal and Torres Strait Islander girls.

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54

An employerof choice

Background
While the severity of COVID-19 lessened in 2022, it
continued to contribute to a worldwide talent shortage.
Other changes are also emerging. The immediate legacyof the shift to more flexible work arrangements has beena change in employee expectations of working conditions.
Better work-life balance and alignment between personaland employer values, including sustainability, have an evengreater bearing on people’s choice of job and employer.
This pandemic-related evolution is redrawing traditional
concepts relating to jobs and careers. Employees are
rethinking their priorities and approaching the employment
market with more freedom. Notably, they are willing tochange jobs more frequently to find the work-life balancethat is best for their personal situation.
This realignment is forcing employers to rethink practices
and strategies. The result is a ‘war for talent’. There is now aclear focus on a hybrid approach to working and on greater
personalization of all parts of the recruitment process andemployment. At Nestlé, we have responded to this shift.

100%

Rollout of
Global Parental
Support policyin all markets

RECORDABLE ILLNESS

0.66 Recordable illness rate
per million hours worked
0.71
0.66

100%

Countries where
policy against
Discrimination,
violence andharrassment isrolled out

2022

2021

RECORDABLE INJURY

1.21 Recordable injury rate
per million hours worked
1.28

1.37*
1.21

Approach
Talent management

We strive to attract, hire, develop and retain the rightcandidates to be a ‘force for good’. Our talent acquisition
and retention approach is outlined in our People
Strategy 2025, which is focused on building a futureready workforce, developing leadership that is inspiring,
disruptive and inclusive, and fostering a culture that isagile and winning. This approach is aligned to our businessstrategy, Corporate Business Principles and our purpose
and values.

Our people are at the heart of ourcommitment to be a ‘force for good’.
Their mental, physical and social
well-being is a priority, as is creating
a culture in which they can thrive.

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We encourage our people to find new and exciting
opportunities within the company. We promote global
mobility and work with our employees to fulfill their needs
in terms of flexibility, training, growth and reward.

2020

2021

2022

* Last year’s recordable incident rate has been restated to 1.37 (from 1.33),
following recategorization of incidents at a later date.

SDG CONTRIBUTIONSAll our employees are empowered to develop theirown careers, supported by their line managers. Our
SuccessFactors online system provides a tool and resourcefor both managers and employees to find guidance and to
track this process.

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55

Employee health and well-being

SafetyWe have made the safety of our people one of our core
principles. We are committed and determined to prevent
serious accidents by continually eliminating risks andby enabling our employees and contractors to adopt
safe behaviors.

Employee health is fundamental for building sustainableorganizations, driving business performance anddemonstrating shareholder value. The Nestlé Roadmap
for Employee Health serves as a reference for our markets
when addressing employee health. Under each pillar, we
detail key milestones and deliverables.

Our zero-harm vision puts people at the center ofeverything we do. We aim to create a harm-free work
environment with world-class safety performance, to havea positive impact on people’s well-being and to ensure all
Nestlé employees have a risk anticipation mindset. At thesame time, we encourage strategic partnerships to help us
in achieving our vision.

NESTLE ROADMAP FOR EMPLOYEEHEALTH 2021-2023
Our approach to our people is realized
through six key areas:

1. Talent management
Attracting, developing and retaining talent while preparing
our workforce for the needs of our future business.

We strive to ensure that the highest safety standards areapplied to all our sites, operations and projects, where our
focus is on our highest risks. We expect life-saving rules
to prevent fatal and serious injuries to be applied withzero tolerance. We empower employees to stop work andspeak up if they recognize a situation as unsafe. We alsouse digital innovation and behavioral science to contributeto the elimination of serious accidents and to help us
understand what drives at-risk behaviors and address
root causes.

2. Diversity and inclusion
Building a better business that is inclusive and equal forgenders, people with disabilities, LGBTQ+ communities andall races and ethnicities.
3. Employee health, well-being and safety
Inspiring and empowering our people to choose a healthier
future for themselves, their families and our business. To
work only when all required safety measures are in place,
speak when anything appears unsafe and create a safe andhealthy working environment.

Employee relations and engagement
We are committed to treating employees with mutual
trust and fairness. We recognize the importance ofcollaborating with our employees and their representatives
and organizations, as well as external labor stakeholders.
We work closely together with the International Union ofFood Workers to ensure that the needs of our workforce
are addressed. Our regular and deep interactions ensurealignment and comprehensive inputs when we review ourpolicies and guidance documents.

4. Employee relations and engagement
Supporting Nestlé in its goal to be a company where
employees are treated with mutual trust and fairness,
and where they feel engaged with our purpose, values
and principles.
5. Organizational design and change management
Based on our Corporate Business Principles, our culture is
supported by regularly updated policies and communicatedthrough our training.
6. Compensation and benefits
Providing employees with fair and competitive salaries andbenefits and conducting regular performance reviews.

Participantson our youth
program in
Hungary.

Compensation and benefits
We ensure that our employees are rewarded andrecognized for their contributions with competitive pay
and benefits. Our Nestlé Total Rewards Policy provides aframework within which our teams can create programs
that attract, motivate and retain talent. We do this to build
a performance culture, to engage our workforce and tocontribute toward a positive employee experience.

Nestlé viewpoint

Building the(Nes)future“The mini program offers access to a library of articles that
help all local employees to understand and stay up to dateon all things sustainable at Nestlé.
“I use it to keep a record of my carbon reduction activities,
such as how I travel (whether I cycle or take the subway
over the car), how much I recycle, what food I eat and even
whether my cutlery is reusable. The mini program calculates
how much carbon I’ve saved and I can immediately see theimpact of my small actions.

Competition and reward
Shiyu LV
Legal Counsel

Our team in China embraces
greener choices.
“Are you wondering how you can act more sustainably
each day? It’s a question I’ve often asked myself. Nestlé ishelping employees in the Greater China Zone answer byusing an app-based mini program.
“Known as Nesfuture, the mini program is designed tohelp inspire and empower all Nestlé employees to integratesustainable activities into our daily lives. The idea camefrom our teams. It was launched internally on April 22,2022 – Earth Day.

“Even better, we’re recognized for participation, teamspirit and consistency. The more days we’re active thehigher we score, receiving rankings for both individual andbusiness unit performance. If we make it to the top of theleaderboard, we’re rewarded with either coupons for the
Nestlé online supermarket or eco-products from Nespresso.
“Nesfuture helps me build good habits in the workplace
and at home, where I explain the benefits of a low-carbon
lifestyle to my daughter.
“No more trying to remember small changes I make day today. Using the mini program means I can make a difference
all the time. The combination of incentive, repeated action
and fun creates long-term positive change.”“83% of around
20 000 employees in
the Greater China Zone
registered for the App
by 2022.”

Organizational design and change management
We manage our purpose and values at a global level,
providing our markets with the support they need to ensure
a consistent culture throughout the company.
We recognize that the world changes fast, so we constantly
evaluate the external environment and adapt whennecessary. And we always take local legislation, cultural andreligious practices into account.

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Screenshots of our
Nesfuture employee
sustainability app in China.

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56

156 600

Performance
Talent management

Adaptability is enshrined in our approach to talent
recruitment and retention, and is a key tenet of our People
Strategy 2025 plan. We constantly evolve our focus toreflect the changing talent acquisition landscape. We
have established a number of new working practices
and approaches at a local and regional level, to focus theworking environment in our factories on employee wellbeing. For office-based workers, we have formalized ahybrid flexible working policy in all markets. Each market
can adapt the policy in line with local conditions.
In a challenging employment environment, we wererecognized as one of the World’s Best Workplaces by Great
Place to Work.
In 2022, we also focused on communicating personal
development opportunities at Nestlé, in line with our plan
to place more emphasis on fostering the skills we need to
grow as a business. This strategy was rolled out around theworld, with campaigns tailored to individual markets.
For example, in the United States, we launched a videoled campaign promoting the benefits that we offer, while
in China, we introduced the Nesfuture app-based mini
program to help our employees track their personal
sustainability performance. This includes their daily
greenhouse gas emissions (see Nestlé viewpoint Buildingthe (Nes)future).

Innovations
In 2022, we continued to pilot the use of artificial
intelligence (AI) in our employee skills development andtraining processes.
During the year, we expanded the coverage of our AI-based
talent marketplace resource to 13 new Nestlé markets.
The tool matches people’s skills with project teams they
can join. It helps to increase efficiency, foster mobility anddevelop competencies that support company growth. Talentmarketplace was first launched in the United States in 2020
and will be rolled out in more markets in 2023.

In 2022, we wererecognized as oneof the world’s best
workplaces by Great
Place to Work.

Our people by type of employment
Covers Nestlé employees registered in the human resources
system (approximately 96% of all employees). Each data
point correct at the time the snapshot was taken.
Permanent

Temporary

Total number of employees Female
by employment contract(by gender)Male

94 0728335

147 310

7883

Total number of employees Asia, Oceania andby employment contract
Australia

55 0343868

Europe, Middle Eastand North Africa

76 6187152

Greater China

19 366276

Latin America

55 1254512

North America

35 267412

Full time

Part time

95 9916416

152 629

2564

Total number of employees Female
by employment type(by gender)
Male

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Employees
reached throughhealth promotion
activities in 2022
(130 063 in 2021).

9.3

Average number ofhours of technical or
vocational training
provided to workers
in the company’s
operations(15.8 in 2021)

56.3%
Total employees
covered bycollective bargaining
agreements(54.4% in 2021)

Employee engagement, health and well-being

In 2022, we continued to evolve and expand our employee
engagement initiatives and health and well-being
programs. Importantly, we launched new domestic violence
victims guidance across the company (see the Agents ofchange case study).
To encourage healthy living among our employees, we
ran two global communication campaigns in 2022 that
addressed our major health risks. These reinforced theimportance of physical activity, active breaks, healthy eating
and mental health.
As part of the campaigns, we ensured the availability ofhealthy food at Nestlé canteens. In 2022, 94.6% of ourcanteens offered a healthy meal (94.4% in 2021) and 54.5%
of our markets provided a nap room or equivalent spacefor resting.
More broadly, the #HealthyLives program includes guidance
and interactive exercises across four dimensions: physicalactivity, sleep, nutrition and mental health, and is available
in 16 languages. So far, 33 136 employees have participatedwith 509 974 video views.
We also continued to develop our Pleaz global digitalplatform. The platform provides easy access to active
breaks. In Pleaz, employees can find guided exercises fromstretching to mindfulness that help unwind and renew theirenergy in a quick active break. Since the launch of Pleaz
in July 2021, we had 60 452 activations in the platform,
underlining a high level of interest from our employees.
The Nestlé My Health Numbers program enables us
to measure the overall health risks of our employee
population, helping us to better understand health profiles
and the impact of health on productivity and to build
strategic, targeted and evidence-based interventions.
The program was available to 233 385 employees atthe end of December 2022 (227 640 in 2021) and basedon the cumulative data, 108 830 Nestlé employees so
far have participated in the global program (49 687 in2021). The most prominent health risks continue to be
stress, unhealthy eating, lack of physical activity, weight
management and poor-quality sleep.

The number of employees reached through global employee
health promotion communication campaigns such as#HealthyLives and Mental Health Week in 2022 was 156 600.
In addition, we continued to work with industry bodies,including with the Consumer Goods Forum, where weare a member of the Employee Health and Well-being
working group.
In 2022, our recordable illness rate per million hours worked
was 0.66. There were no recordable fatalities from illnesses
and we unfortunately recorded 20 irreversible illnesses.
SafetyWe deeply regret that six people lost their lives whileworking for us in 2022 (three in 2021). Four were Nestlé
employees and two were employed by a contractor. Four
fatalities involved road traffic accidents, one occurred ona construction site and one during production operations.
All fatal accidents are investigated by an independent
investigation team to establish the root causes. We takeaction to prevent recurrence and share the lessons learned
across the company.
In 2022, 64.6% of our sites had zero recordable injuries andour Group recordable injury rate per million hours worked
was 1.21, an 11% reduction compared with 2021. However,there were still 22 serious injuries in 2022 (13 in 2021). We
believe that the occurrence of any incident is unacceptable
and we believe that by executing our strategy, we willachieve significant improvements in our safety performancein line with our zero-harm vision.

Sustainability capability building

In Europe, we engage employees through various online
training courses on sustainability. Also, a lot of hands-on
farm visits and educational activities bring sustainability
spirit within our teams.

Compensation and benefits

We have continued to work toward our commitment to rollout our Global Parental Support Policy across all markets,with 100% markets covered by the end of 2022. We canalso report that all Nestlé employees are covered bystatutory or, when appropriate, sponsored insurance andpost employment provisions.

We continued our series of HealthTalks webinars, with 4066
views in 2022 (14 480 in 2021). They covered the topics oflong COVID-19 and eating good food for a better mood.

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Agentsof change

OutlookIn 2023, we aim to keep building our personal and careerdevelopment resources. We will expand our use of AI todevelop and train our employees, rolling out key tools in
more markets around the globe.
Our employee relations teams will be instrumental in
implementing human rights salient issue action plansthat relate to our own workforce. These are focused on
freedom of association and collective bargaining, healthand safety at work, living income and living wage, forcedlabor and responsible recruitment, and gender equity, nondiscrimination and non-harassment.

The importance of our
new Domestic Violence
Victims Guidance.

Within our employee health and wellness agenda, we willcontinue to work through our roadmap toward our 2023
goals. Going forward, we intend to expand well-being toinclude additional focus areas (such as those relating tofinancial, social and career considerations), in addition to
the existing physical and mental well-being pillars. We
plan to update our Global Parental Support Policy and, by
the end of 2023, expect every market to have an employee
relations strategy in place.
We will also continue to strengthen our safety culture in
the context of our zero-harm ambition, placing increased
focus on road safety, life-saving rules and impactful safetysystems, and we will further develop the Nestlé Global
Women in Safety Network.

Our flexible
approach to
employment meansthat we allow
our employees
to work remotely
when possible.

In June 2022, thousands of people marchedagainst gender violence and femicide in
Buenos Aires as part of a movement in its
seventh year called Ni Una Menos, or “Not
One Woman Less.” Protesters sang loudly,
beat drums and lit pink candles, illuminating
the Argentine parliament to remember
victims in a country where an average of one
femicide is recorded every 35 hours, and
81% of those killed are classified as victims ofdomestic violence.
This demonstration was a colorful andvibrant show of solidarity for a sensitive
issue, one which is not always addressed inpublic, let alone in the workplace. Very often,
domestic abuse is seen as a private matter,
where victims go unheard and uncared for.
And while the threat looms largest in thehome, the risks can quickly reach into the“Addressing the issue head on
is a win-win for employees andfor Nestlé.”
Belén Corti
Nestlé Medical Specialist

workplace, impacting performance, leading toabsenteeism and disrupting careers.

“One of the biggest challenges in addressing
domestic violence in the workplace is getting
employees to recognize the value of speaking
up,” Gonzalo Ramos explains. “If we candemonstrate that we are here to support
employees and have a team of specialists
on standby to provide confidential andconstructive advice, we can provide employeeswith credible solutions.”

At Nestlé, the health and well-being of every
employee is our priority. We’re proud of the
progress we have made to empower women,
and we’re determined to maintain the pace ofchange by being open about difficult subjects
and tackling domestic abuse head on. The
workplace can be a sanctuary for those who
might otherwise suffer in silence.
Following the global guidance and tostrengthen our efforts, we launched our
Guidance for Providing Support for Employee
Victims of Domestic Violence or Abuse Policy
in November, in the Plata Region of Argentina,
Paraguay and Uruguay. The guidance is beingrolled out globally and provides direction formarkets to support employees experiencing
or surviving domestic violence. It also aims toraise awareness among employees, remove
fears of stigmatization at work for victims andprovide guidance to HR Business Partners andPeople Managers when supporting people inthese situations.

Thousands marchedagainst gender violencein Argentina in 2022. Our
Domestic Violence Victims
Guidance aims to improve
support for employee
victims in the country.

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In tandem with the launch, the HR teamin Argentina chose November 25, theInternational Day for the Elimination ofViolence against Women, to share a
podcast addressing domestic violence with
employees. During the broadcast, Belén Corti,
Nestlé Medical Specialist and community
psychologist, talked about different typesof abuse – mental, physical, economic andsexual – and gave example situations in a
family environment or in a current or past
relationship. Most importantly they explained
how and where to get help.

Empowering people to speak up“The launch of clear guidelines is a critical step
toward empowering people in our region,”says Gonzalo Ramos, Human Resources
Business Partner and Employee Relations
Manager in Argentina. “Statistics here show
domestic violence incidents are increasing year
on year. And while 78% of the affected people
are women and girls, anyone can be affected,
regardless of gender, age, race, sexual
orientation or faith.”

The podcast was the first in a planned seriesof events to help bring the new policy to life.
From 2023, the HR team – working closelywith NGOs – will travel to each Nestlé locationin the region to talk to employees in a bid
to break down the taboo surrounding theissue. They will also run several programs totrain leaders and reinforce the message that
violence and abuse should never be tolerated
at home or in the workplace.

A podcast discussing the
topic of domestic violence
was the first in a seriesof events to promote the
new guidelines.

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The foundations of
ethical businessBackground

Approach

To earn the trust of stakeholders, organizations are
expected to operate with high standards of integrity andbusiness ethics.

We conduct business in an ethical and principles-basedmanner, even in the absence of applicable regulatory
requirements. We take a coordinated, holistic andrisk-based approach to monitoring our conduct against
regulatory requirements, societal expectations andour internal standards. Our commitment to integrity,
fairness and authenticity are enshrined in our company’s
purpose and values.

In order to meet such expectations, we ensure that thecompany promotes open and transparent communicationand interaction. We also ensure the continuous evolutionof a Speak Up culture, where people and a healthy working
environment will always be protected.
Earning trust is crucial – the trust of customers, consumers,
investors, employees, governments and all otherstakeholders is fundamental to succeeding as a businessover the long term.
Nestlé values this trust above all else. It is the basic
foundation on which our business is built. We work todeserve this trust and to safeguard our reputation by
behaving ethically, by enabling people to speak up whenconcerns arise and by managing data responsibly and withtransparency. In addition, the regulatory environment hascontinued to become more rigorous and to touch moredeeply on the need for companies to conduct sustainablebusinesses and operations.

We continue working to earn trust as
an ethical and sustainable business.
Trust in Nestlé is fundamental to ourculture and to the value chain evolution
we are leading.

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SDG CONTRIBUTIONSOur Corporate Business Principles are mandatory for all
employees and are supported by our Code of BusinessConduct and other policies. In particular, the Code specifies
certain non-negotiable minimum standards in key areasof employee behavior, including integrity, compliance withlaws, conflicts of interests, antitrust and fair dealing, bribery,corruption (UN Global Compact Principle 10), discriminationand harassment, and accurate reporting and accounting.
We integrate these policies and standards into our businessplanning, activities, operations, performance reviews andauditing. Where our own principles and policies differ fromlocal legislation, the higher standard applies.

Business ethics and compliance

Our comprehensive Compliance Program supports thecontinuous development and implementation of our
Corporate Business Principles based on ethics and integrity.
It empowers our employees and managers to do the rightthing for the right reason. The program supports ourwork related to environmental and social matters and isa foundation for making Nestlé a force for good.

Managing data responsibly and ethically

Our commitment to protecting personal data and privacy
is reflected in our mandatory Global Privacy Program,
our Data Ethics Framework and our Corporate Business
Principles. We are transparent about how we processpeople’s data and provide meaningful control over how
personal data is collected and used. We avoid using data
and technology in ways that are unethical or could leadto discrimination and exploitation or cause harm.

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Using technology to drive sustainablesupply chains

As we build closer relationships and create greatertransparency throughout our supply chains, technology
and data have a huge role to play.
We use technology to track where our raw materials are
sourced from, ensuring greater traceability. We also use
it to manage the vast amount of information that thiscreates. This data is used to help drive supply chain
improvements and evaluate the responsible measuresapplied at each stage.
Technology is integral to many of our initiatives, including
our income accelerator program that facilitates direct
payments to farmers, among other benefits. We makesure to keep data safe to respect farmer and supplier
privacy. We use data from satellite monitoring to evaluate
forest areas at risk, a strategy that is aimed at preventing
deforestation before it happens.
Altogether, this use of technology helps us in oursustainability efforts throughout our supply chains.

OUR 4 COMPLIANCE PROGRAM PILLARS

External viewpoint

1. Compliance governance and culture
Our strong culture of business ethics is led and driven by
senior management. We are determined to ensure that ourpolicies, standards and procedures, supported by robust
governance and processes, enable us to conduct businessin an ethical and principles-based manner, to fulfill ourbusiness requirements and to meet societal evolution and
expectations, while reinforcing a Speak Up culture.

Race tothe top

2. Communication and training: dissemination ofprocesses and tools
We run yearly communication campaigns to share andreinforce ethics and compliance guidance, and to share
information on the evolution of our compliance culture,
principles and values. Training materials and tools arecontinually developed and implemented to support andmonitor this process.
3. Monitoring and reporting
Our global CARE social audit program was started in 2005
and is aimed at verifying that all employees and Nestléoperated sites comply with local legislation, our Corporate
Business Principles and our Code of Business Conduct.
External auditors assess compliance with our Corporate
Business Principles against seven pillars: conditions of workand employment, business integrity, safety and health,environmental sustainability, security, local communities
and labor accommodation. In addition, our Human Rights
Framework and Roadmap provides a comprehensive
approach for assessing and developing preventive andcorrective measures to respect human rights in ourbusiness relations with third parties.
4. Closing gaps
We carry out continuous risk assessments to define thepriorities and focus areas of our Compliance Program. We
ensure that ethical discussions, consequence management
and action plans are duly executed.
In all areas: automation of systems and processes
The execution of our Compliance Program is supportedby the continuous deployment and improvement of digital
tools, which provide effective and actionable monitoring
and reporting.

Gerbrand Haverkamp
Executive Director, World
Benchmarking Alliance

The importance of transparency incorporate reporting.
The private sector has a critical role to play in achieving
the SDGs. Companies that robustly measure, manage
and report their impacts help us move toward a moresustainable future for everyone. But doing this is easier
said than done. How do we incentivize and accelerate
the biggest players in the private sector to get on board?
How do we move from simple statements of intent tochanges in corporate behavior?
One way is by increasing levels of transparency andaccountability. In an ideal world, every company would
publicly commit to achieving science-based targets, theywould produce all the relevant data internally to trackprogress, and then publish this data for stakeholders
who could help drive progress, and shareholders who
could make better decisions on how and where to invest.
However, without a universal governing body or framework,
companies often fall short of this ideal.

The benefit of benchmarking

Companies can use our benchmarks to assess progressagainst their peers and use our methodologies as
guidance for what science and society expect. As soon
as a benchmark is made public, it immediately shows
performance and provides a common global language fortalking about sustainable business practices. How did weperform? What can we do to get better?
Our Theory of Change is simple: by comparing one
company to another in a public way in front of investors,
customers, employees, NGOs, regulators, tradeassociations and other stakeholders, we can spotlightthe best and worst performers. We can recognize thecompanies that lead and hold those that lag behind toaccount, ultimately encouraging both to improve. Our aim
is that businesses will fulfil their responsibility in helping totransform the system for both people and the planet.
In the long run, greater transparency and accountability
for corporate reporting allows investors to influence thecompanies they invest in, helps governments to develop
better policies, drives civil society to direct public support
and partnership efforts and enables individuals to decide
where to spend their money or where they’d like to work.
In other words, it creates a marketplace for companies tomake a real difference.

#2

Nestlé ranks #2 of 350 companies in
the World Benchmarking Alliance’s
Food and Agriculture Benchmark
See Nestlé’s full World Benchmarking
Alliance scorecard here.

A coffee tree nurserywith new coffee varieties.
Transparency starts atthe very beginning of
the supply chain.

By benchmarking companies, you can create a kind of
league table on SDG impact. You tap into a company’scompetitive spirit and trigger a race to the top. At the World
Benchmarking Alliance, we use publicly available data,company questionnaires and reliable third-party sources
to rank companies from first to last. We focus on thecompanies that can have the biggest impact, offering thema scorecard with suggestions on how to improve. All the
rankings are made available for free.

We have been using
technology to improvesustainability in Côte
d’Ivoire since 2011.

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Compliance and Corporate Business
Principles training

We published an updated Speak Up guideline in all
markets. The guideline covers recommendations andrequirements on the handling, review and investigation of
all non-compliance allegations. It also provides direction
on the execution of our non-retaliation commitment to all
allegations raised in good faith.

To help strengthen our compliance culture, we continue
promoting the global mandatory e-learning sessions,delivering 817 312 modules in 2022 (1.2 million in 2021,
300 000 in 2020). Much of the training is related to our
Corporate Business Principles.

Non-compliance concerns raised throughSpeak Up by category

Employees are required to complete a set of 11 mandatorye-learning sessions.

Breakdown categories
for Speak Up messages

Messagesreceived

Messages
substantiatedAbuse of power and/or mobbing/bullying

743

222

Unfair treatment

368

26

Labor practice

272

69

Harassment (excluding sexual harassment)

168

52

Fraud (misappropriation or misconduct on
accounting/financial statement)

128

35

Safety and health

122

21

Violation of laws/regulations

120

27

Gifts, families and relatives, conflicts of interest

91

22

Bribery and corruption

88

22*

Violence and discrimination

86

16

Sexual harassment

81

36

Speak Up is our global platform for reporting noncompliance concerns, available for all Nestlé’s employees
and other stakeholders. It is independently operated
by a third party to ensure anonymity when requested.
The system also complies with key regulations. It iscomplemented by the case management system, which isoperated by our teams in the markets and records all cases
reported through Speak Up. This helps to analyze relevant
anonymized key performance indicators, trends andstatistics on an ongoing basis.

Confidential information, Privacy Policy (dataprivacy, trade secrets, intellectual property)

65

8

Third-party compliance54

8Seeking compliance advice

43

5

MANCOM members related

27

6

Human rights (child labor, forced labor andmodern slavery risks)

160

Environmental impact

142

Trade sanctions

12

0

Every allegation reported through Speak Up is professionallyand confidentially handled. In 2022, we received 2516
messages on non-compliance allegations and compliancerelated questions. Of the cases investigated, 578 messages
were substantiated. As a consequence of substantiatedcases, 154 employees had to leave the company and 11
service providers’ contracts were terminated.

Antitrust and fair dealing

90

Non-compliance with WHO Code5

1

Executive Board member/senior managers
in Switzerland

40

Performance
Speak Up: a global non-compliance concern
reporting channel

Rising awareness of Speak Up led to an increase in thevolume of messages received in 2022. Even though thenumber of substantiated cases remained at similar levels to
those of 2021, the total number of employees who had toleave the company and number of service providers whose
contracts were terminated increased, which clearly showsthat compliance with our policies and standards, as well aswith applicable laws and regulations, is non-negotiable.

Table of contents

We empower our
employees to raise any
compliance concerns.

* Messages substantiatedrelated to kickbacks
and did not involve
government officials.

The number of CARE audits continued to register a positive
evolution in 2022, at 264 (247 in 2021). This trend reflects areturn to a full regularity in performing CARE audits as theimpact of COVID-19 becomes less severe.

Employees are required totake compliance training
every year.

2020

2021

2022

532

2020

2021

2022

Locations covered by CARE audits

300

379

389

CARE audits carried out

150

247

264

CARE audits improvement opportunities identified

274

333

511

CARE audits gaps closed

253

161

283

Monitoring and reporting

We are constantly evolving our compliance monitoring
and reporting. In 2022, we conducted a quality review ofconsequence management for substantiated Speak Up
non-compliance concerns, using improved trend analysis
data. We have also enhanced our current conflict-ofinterest declaration process. Data quality and automation
initiatives continue to be our key priorities. By doing
this, we ensure visibility and enable better business andmanagement decisions.

In 2022, we launched our Salient Issue Action Plan on
Data Protection and Privacy. It reflects our commitment
to privacy and the rights of the individual in relation
to digitalization.
Our plan is designed to ensure that we operate to highstandards and respond to the growing trend for stronger
data protection and privacy laws. We are also responding
to the expectations of consumers, investors, customers andregulators on how data is used by corporations.
The plan is based on our Privacy Program, with tools suchas maturity self-assessments, privacy impact assessments,
vendor privacy risk assessments and internal and external
audits used to mitigate risk and report on performance.

Total cases closed
2721

Total non-compliance concerns raised:3305
580

Our CARE reviews have a broad scope. Their content
is based on the SMETA social auditing methodology
and enriched with requirements specific to Nestlé. The
Danish Institute of Human Rights also provided input on
the program. The wide range of topics include healthand safety and working conditions, such as laboraccommodation for on-site workers.

CARE audits

Data protection and privacy

Speak Up cases
Total cases through Speak Up
Total cases substantiated

CARE audits

All our operational sites are subject to a business integrity
review through the CARE Program within the three-year
CARE cycle, which reviews and validates bribery andcorruption prevention and training.

The number of data breaches notified to the relevant
authorities and affected individuals was eight in 2022. Eachreported breach is counted once, regardless of the numberof people affected. Also in 2022, we continued to train
employees on data ethics and how to manage data legallyand responsibly through an iLearn module titled Data
Ethics at Nestlé, as well as through our Corporate Business
Principles e-learning.

1944

Total non-compliance concerns raised:2475
578

1 758

Total non-compliance concerns raised:2516

Creating Shared Value and Sustainability Report 2022

61

Molbile technology allows
us to make payments from
our income accelerator
program directly to farmers
and their spouses.

Outlook
Looking ahead, we will continue applying and developing
our commitments to fairness and authenticity, enabling
our employees and managers to do the right thing forthe right reason, while protecting and strengthening
Nestlé’s reputation.

Technology-driven transparency

Our work with partners to test and deploy technology
in our upstream supply chains continued in 2022.
In Côte d’Ivoire, we began using mobile payment
technology as part of the Nestlé Cocoa Plan’s income
accelerator program. The technology allowed us to pay
premiums as part of the plan directly to the farmers andtheir spouses. A notable benefit of this technology isthat we have a high degree of confidence that the entire
incentive reaches the household promptly and that allthese transactions are completely traceable.
For many of the rural farmers, this was the first banking
facility of any kind that they had ever set up and we
provided considerable assistance to them. In many cases,
this also involved obtaining basic identity documents,
such as birth certificates for farmers.

Ethical business isa core part of ourcorporate culture.

Table of contents

Our mandatory compliance training and relevant
communication campaigns will continue to help strengthen
our ethical business culture. We continue to evolve andenhance the Speak Up program and its case management
system, with the support from internal teams and therelevant service provider. Based on the Human Rights
Framework and Roadmap, we have issued specificaction plans for our 10 salient issues.

Ethical behavior
is rooted in respect
Our Speak Up culture.
We promote an inspiring, innovative,
transparent and open work environment,
where each employee is respected, has theliberty to engage, create and contribute,always with the ability to speak up.
Therefore, everyone in the organization is
encouraged to speak openly on any matter.
Each employee is free to discuss any matterwith his or her line manager and, in orderto ensure the continuous evolution of suchwork environments, can approach Human
Resources, Compliance or access our Speak
Up with full confidentiality.

We believe that the robust system andconsistent communications are proving
a potent mix. Nestlé is sending a strong
message and consequently having a
local impact through its actions: settinghigh standards for its employees andexternal stakeholders, creating a robust
framework against which to measure
behavior and, importantly, taking decisiveconsequence management decisions andimprovement actions.
All of this is fundamental to remaining true toour values, which are based on respect andultimately drive our success.

“Our commitment to full confidentiality,
protection and non-retaliation on
the treatment of all noncomplianceallegations made in good faith isessential to ensuring trust in ourorganization and encourages others
to speak up.”Flavio de Souza
Nestlé Chief Compliance Officer

An annual communication campaign

In 2022, we launched our annual employee
communication campaign to reinforce the
Speak Up culture and share the previous
year’s results. The campaign disclosed theitems reported through the channel in 2021
and candidly stated that 133 employees
had to leave the company and six service
provider contracts had been terminated as aconsequence of the substantiated cases.
In addition, we used the World Whistleblower
Day on June 23 to promote our Speak
Up culture across the organization. We
conducted a communication campaign tothank our colleagues for having the courage
to step forward and report non-complianceconcerns. We also used a quiz on our internal
Workplace as an engaging way to help
employees improve their knowledge of Speak
Up. Our global campaigns are supplemented
by numerous communication campaigns in
the markets.
It is important for employees to feel able toraise concerns – which is why we work hardto build a Speak Up culture.

Creating Shared Value and Sustainability Report 2022

62About this report
This Creating Shared Value andSustainability Report 2022 aims
to provide a full and balanced
picture of Nestlé’s material
topics, related impacts andperformance in the calendar
year ending 31 December
2022. The report is aimed ata broad audience including
investors, non-governmentalorganizations, environmental,social and governance services,
customers and suppliers.
We provide further information about ourapproach and programs for each material
topic online at www.nestle.com/sustainability.
For investors, we also provide an overview
of activity related to our major material
issues in our Annual Review atwww.nestle.com/investors.

Table of contents

Reporting scope, boundaries
and methodology

This report covers our global operations andcontains data for wholly owned companies andsubsidiaries that are consolidated in the Nestlé
S.A. financial statements, excluding associates
and joint ventures and suppliers unlessotherwise stated. Our environmental data
refers to factories and warehouses, except for
acquisitions that occurred after 31 December
2021. Our separate Reporting Scope andMethodology for ESG KPIs document provides
more detailed definitions and methodologies
for selected strategic key performanceindicators with limited assurance. All monetaryamounts are in Swiss francs (CHF), unlessotherwise stated.
Our Annual Review provides an overview ofour product categories, operating segments
and markets where we operate, as well as any
significant changes to our operations in 2022.
‘Market’ refers to business operations and/or
activities at a national level, while ‘Zone’ refers
to a geographic group of markets.

Reporting frameworks

This report has been produced with reference
to the Global Reporting Initiative (GRI)
Consolidated Set of Standards 2021. We
also applied the Sustainability AccountingStandards Board (SASB) Standard for theProcessed Foods sector and World Economic
Forum Stakeholder Capitalism metrics.
Our GRI Content Index and SASB Index areavailable on our website.

Independent assurance

We engaged two third-party organizations toprovide independent assurance of the content
of this report in 2022.
Bureau Veritas has provided independent
assurance of the accuracy, reliability andobjectivity of the information included in thisreport, and that it covers our material issues.
The assurance process was conducted inline with the requirements of the AA1000
Assurance Standard (AA1000AS v3) Type 2
at moderate level of assurance.
The full assurance statement with Bureau
Veritas’ independent opinion can be found atwww.nestle.com/assurance-statement.
In addition, we engaged EY to provide
independent assurance on the following
selected key performance indicators (KPIs) ofhigh strategic importance:– CO2e reductions compared with businessas-usual scenario, and removals secured
in 2022– GHG emissions Scope 1– GHG emissions Scope 2– GHG emissions Scope 3– Water use reduction in factories– Percentage of key ingredients produced
sustainably– Percentage of key ingredients sourced
through regenerative agriculture methods– Percentage of assessed deforestation-freefor primary supply chains– Percentage of virgin plastic reduction– Percentage of plastic packaging designed
for recycling– Number of servings of affordable nutrition
with micronutrient fortification– Number of young people around the world
with access to economic opportunities– Percentage of women in the top 200+ senior
executive positions

This assurance engagement was performedin accordance with the International Standard
on Assurance Engagements (ISAE) 3000 toprovide limited assurance. Our Reporting
Scope and Methodology for ESG KPIs
document provides details and definitionsof these selected KPIs and can be found atwww.nestle.com/sites/default/files/2023-03/
reporting-scope-methodology-esg-kpis-2022en.pdf.
As part of this engagement, EY reviewed thefollowing additional indicators that are related
to the selected KPIs for consistency:– Total Scope 1+2+3 emissions (CO2e)– Percentage of renewable electricity sourced– Percentage of global fleet of vehicles
switched to lower-emission options– Total energy consumed– Percentage of energy consumed thatis renewable energy– Percentage of energy consumed thatwas supplied from grid electricity– Millions of trees secured– Million tonnes CO2e secured throughtree-planting projects initiated– Percentage certified sustainable palm oil– Percentage coffee sustainably produced– Percentage cocoa sourced through the
Nestlé Cocoa Plan
– Percentage cage-free eggs
– Percentage Nespresso coffee sourced
via the Nespresso AAA Sustainable
Quality™ Program– Percentage Nescafé coffee
sustainably sourced– Total water withdrawn in m3/y(+ breakdown by source*)– Total water consumed in m3/y
– Percentage of water withdrawn in regionswith High or Extremely High Baseline
Water Stress– Percentage of water consumed in regionswith High or Extremely High Baseline
Water Stress– Water withdrawals at our factories byproduct category (m3 per tonne of product)– Total weight of packaging in tonnes– Percentage of packaging made fromrecycled and/or renewable materials– Percentage of packaging that is reusable,
recyclable or compostable– Percentage of recycled plastic inplastic packaging– Packaging pieces placed on the market– Percentage of global plastic use by weight
and type, as % of total– Total weight of plastic packaging– Job opportunities for people under 30– Apprenticeship and traineeship opportunities– Young farmers trained throughAgripreneurship Program– Number of young people impacted throughdigital events (e.g. career fairs, educational
webinars, e-learning programs) that focus
on upskilling young people and make themmore employable
All other data points are assured by Bureau
Veritas, except for waste volumes (page 13)
and the % reduction in water withdrawals
at our factories by product category since2010 (page 27), which have not been assured
for 2022.

We hope you find this report interesting andinformative. Please share your feedback andsuggestions with us:
creatingsharedvalue@nestle.com

EY assured. The EY limited assurance reportand conclusion can be found atwww.nestle.com/assurance-statement

Forward-looking statements

This report contains forward-looking
statements based upon current
expectations and assumptions regarding
anticipated developments and other factors.
They are not historical facts, nor are theyguarantees of future performance since
they are subject to numerous assumptions,risks, and uncertainties, which changeover time. Forward-looking statements
speak only as of the date they are made,and various factors could cause actual
performance to differ materially from that
expressed or implied by these forwardlooking statements. Nestlé assumes noduty to and does not undertake to update
forward-looking statements.

Creating Shared Value and Sustainability Report 2022

63