SEPTEMBER 2017 - 2018

MARS SEPTEMBER 2017-2018

TABLE OFcontents

3

Letter from our CEO and Office of the President

4

Letter from our Chief Procurement and Sustainability Officer

6

Mars in a Moment

7

Introduction to our Sustainable in a Generation Plan

8

Sustainable Sourcing

HEALTHY PLANET
10

Our Progress

THRIVING PEOPLE
12

Our Progress

NOURISHING WELLBEING
15

Our Progress

2

A LETTER FROM

Grant F. Reid

CHIEF EXECUTIVE OFFICER AND OFFICE OF THE PRESIDENT

When we launched our Sustainable in a Generation Plan just one year ago, we knew it was a
critical moment. A range of issues continues to face our global community—including climatechange, poverty, obesity and water stress.
I’ve been with the business for three decades, and during that time, Mars has taken positive
steps to address all of these challenges. In just the last three years, we’ve reduced greenhousegas emissions in our operations by ten percent, virtually eliminated waste to landfill from ouroperations, reduced our carbon footprint by using renewable electricity to power 100 percent
of operations in the U.S. and the U.K. (and are well on our way to doing the same in Australia
and Mexico), built a robust responsible sourcing program and initiated a number of efforts aimed
at increasing the incomes of farmers in extended supply chains. But the current rateof progress is still not enough.
We’ve gotten smarter about many issues and our imprint on environmental and social
sustainability. With that understanding, we have a responsibility—and an opportunity—to step up
and help to create a healthy planet on which all people can thrive.
I am deeply invested in our plan to change the trajectory around how we do business.
We’re also committed to, and dependent upon, organizations like governments, NGOs
and industry leadership groups, like the Consumer Goods Forum, as partners in this effort.
I’m proud to co-sponsor the Consumer Goods Forum’s sustainability pillar and work with theworld’s leading consumer goods companies on becoming a more sustainable industry.

Delivering our targets won’t be easy, but we’re enabled by being a private familybusiness that thinks in terms of generations and is guided by our Five Principles.
We’re powered by more than 115,000 Mars Associates with unmatched energy forcreating a tomorrow they’re proud of through how we do business today, and we’re
working side-by-side with our partners throughout extended supply chains in relevant
sectors to make change happen. My gratitude to all the Associates and our partners,
who are helping us break through and achieve growth we can all be proud of.
Sincerely,

Grant F. ReidI believe we have no more time to debate the case, as the case is clear. We support the Paris
Agreement, as well as a variety of UN climate and social programs. I believe that we canaccelerate our progress on the UN Sustainable Development Goals and the Paris Agreementtargets if businesses take a leadership position alongside governments, NGOs and civil society.
We all need to come together to do our part.
Doing our part is exactly what our Sustainable in a Generation Plan is all about. We’ve establishedthree strategic Pillars to help guide our work: Healthy Planet; Thriving People; and Nourishing
Wellbeing. We’ve transformed the way we think about sourcing—recognizing that responsible
sourcing is key to our sustainability ambitions. Barry Parkin’s new role as our Chief Procurement
and Sustainability Officer is indicative of this shift. Combining these two areas enables us to bringsustainability into the core of our business: procuring the materials to make our products.
In his letter on the next page, Barry elaborates on what this means for the Sustainable
in a Generation Plan.
S U S TA I N A B L E I N A G E N E R AT I O N R E P O R T S E P T E M B E R 2 0 1 7- 2 0 1 8

3A LETTER FROM

Barry Parkin

CHIEF PROCUREMENT AND SUSTAINABILITY OFFICER
Grant Reid has laid out the broad scope and ambition of our Sustainable in a Generation
Plan—a plan that commits our global business to move beyond incremental improvements
to unlock systemic changes that benefit people and the planet. We’ve set our long-term goals
and commitments based on what’s necessary, using the best available science to ensure
we’re operating within planetary and social boundaries and, thereby, becoming a truly
sustainable business.
In this letter, I want to give you more detail on how we’ve started on this generational
journey toward these challenging goals. I’ll share how we’re beginning to transform what’s
necessary to drive impacts throughout our extended supply chains, where we’re seeing early
indicators of progress, and how we’re partnering with others to test new approaches to someof our biggest challenges.
Transforming Extended Supply Chains
We’ve spent much of the last five years mapping our extended supply chains to truly understandour social, environmental and economic footprint. This told us that the majority of our impacts
and challenges were in agriculture, through the raw materials that we source from around theworld. With this knowledge, we prioritized an initial ten raw materials—rice, fish, beef, soy, palmoil, pulp & paper, cocoa, mint, dairy and sugar cane—that make up around 80 percent of oursocial and environmental challenges. We’ve spent the last year developing transformational new
sourcing strategies for each material, which will allow us to address sustainability challenges,
whether they’re GHG emissions, water stress, land use, human rights or income—while at thesame time increasing our supply security and maintaining competitive supply chains. This work
will likely result in very different supply chains in the next few years.

Early Indicators of Progress
We now have nine countries where we source only renewable electricity for our
direct operations, which is up from four in 2016. Investing in long-term, countrylevel contracts is enabling us to save money, while sending signals to the market that
renewable electricity is good for business.
Some of our established raw materials programs are now accelerating. For example,
we’ve partnered with more than 600 farmers and farmer organizations to shift sourcingof Basmati rice to Pakistan. Through the initial support we have provided, we’ve seena 30 percent reduction in water usage, a 32 percent increase in farmer incomes and acost reduction for our business. This is the type of win-win-win we’re striving for withthis transformational sourcing approach.
And in 2017, we achieved 99 percent palm oil traceability to mill level (the firstprocessing stage), which allowed us to identify the areas supplying our businessand evaluate the risks of deforestation or human rights challenges. With thisknowledge, we can begin the deeper transformation of radically simplifying our palm
supply chain and committing to buy from known and verified suppliers.

I believe this transformation of supply chains will be necessary across most of the materials
we used to call commodities. In fact, I believe we’re seeing the end of the commodities era,
where materials used to be sourced from largely-unknown origins and bought purely for priceon a transactional basis. The future will require sourcing from known origins, and in many cases
from known farms, with price and sustainability impacts evaluated side-by-side and generally
from long-term partnership arrangements with fewer suppliers.

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4

Investing in Partnerships to Tackle
Our Deepest Challenges
We’ve always known that pre-competitive partnerships will be crucial to delivering thechanges needed at scale, so this past year we’ve invested heavily in building existing
partnerships and starting new ones.
A crucial partnership is the Livelihoods Fund for Family Farming, which we co-founded with
Danone and others in 2015. This fund will invest 120 million euros to develop sustainableagriculture projects that improve incomes for smallholder farmers, while also tackling foodsecurity and restoring ecosystems. We aim to positively impact 200,000 farms through thisLivelihoods Fund. We now have three projects that have been in the field for more than ayear and another four projects in the pipeline. I recently had the opportunity to visit the firstof these projects, which is working with vanilla farmers in Madagascar. Even after only one
year, it’s clear that this fund and approach is driving real change on the ground and is on track
to increase farmers’ revenues by as much as 300 percent, thanks to improving their growing
practices and involving them in the next step in the supply chain. Our ten-year sourcing
commitment means they can invest with certainty and we’re on track to provide thriving
livelihoods for up to 3,000 producers and around 12,000 family members.
One of the biggest challenges we face is deforestation caused by expanding agriculture.
On cocoa, we’ve worked with our peers in the industry via the World Cocoa Foundation
to build a breakthrough public-private partnership called the Cocoa and Forests Initiative
to end deforestation in Ghana and Côte D’Ivoire. Through strong government and industry
action and investment, this initiative has the potential to halt deforestation caused byagriculture in these countries, and act as an example of what may be possible in othercountries and with other raw materials.
We’ve launched a new long-term strategic partnership with a leading human rights
organization, Verité, to strengthen the impact of our human rights programs, working across
our own operations, with our Tier 1 suppliers, and into the farthest ends of extended supply
chains. And we launched the Farmer Income Lab, a collaborative ‘think-do tank’ to identify
ways to increase smallholder incomes. The Lab’s initial research, done in collaboration with
Oxfam, Wageningen University and Dalberg Group, will be issued soon.
Another very important partner is the Ellen MacArthur Foundation, with whom we werean early partner in the New Plastics Economy. We’ve supported the Foundation’s efforts
through our goal to work toward 100 percent recyclable packaging by 2025. Using lessplastic packaging, reducing plastic packaging waste and increasing recyclability of our plastic
packaging are top priorities for my team and me. We know we have much to do in this areaand have increased our investment and resources to accelerate progress.

S U S TA I N A B L E I N A G E N E R AT I O N R E P O R T S E P T E M B E R 2 0 1 7- 2 0 1 8

On water stress, we’ve made some good progress, notably on rice, where we’refocusing our efforts—in Pakistan, Spain and the U.S. On page 11, you can read more
about how our work in this area saved two cups of water for every person on theplanet in 2017! This is a good start, but we have more to do. And with climate change
continuing to affect sourcing regions around the world, the risks we faceare increasing.
In our efforts to nourish wellbeing, we’ve continued to build on our industry-leading
approach to responsible marketing by deploying an enhanced system to measurecompliance with our Mars Marketing Code, including robust third-party auditing.
Our leadership in this area was publicly recognized by our #1 ranking in the marketing
category of the 2018 Global Access to Nutrition Index (ATNI), and we’re working witha range of like-minded partners to drive higher industry standards—particularly in theemerging area of digital self-regulation.
We’re also making progress on commitments to improve and expand the productofferings we provide our consumers to support their wellbeing. We’ve dedicatedsignificant innovation investment to address the needs of consumers who are seeking
more natural ingredients—most notably in developing and driving regulatory approval
across multiple markets for new non-artificial color ingredients.
Through these initiatives—as well as internal programs to support the health andwellbeing of our Associates, among others—we were able to achieve a 55 percent
increase in our overall Global ATNI score, increasing from 3.6 (out of 10) in 2016 to 5.6
in 2018.
Our Sustainable in a Generation Plan is directly linked to our business goals, which is
why we’re investing more than $1 billion in the first three years to start the work torealize our ambition. We know our Plan will take decades to realize fully and we may
not see fast progress in the early years on some of the goals. But we remain resolute infollowing our chosen path. This first year has been about starting the transformationof our raw material supply chains, accelerating what’s already working, building andinvesting in a number of critical partnerships and testing new approaches. The next
few years will see a significant scaling-up of our activity and impact on the ground.
Sincerely,

Barry Parkin

5

PETCARE

In excess ofFrom humble beginnings in Frank C. Mars’ kitchen
more than a century ago, Mars remains true to ourroots as a family-owned business. We make some of
the world’s best-loved brands, oﬀering diverse
products and services for people and their pets.

Ten of our brands
are worth more thana year in net sales

MARS WRIGLEY CONFECTIONERYHSTA

R T S W I T H O UR

AS

SO

Associates in
PetcareC

Creating some of the world’s

S

EV

YT

IN G

TE
IA

ER

We employ

72,000+72,000+brands and products
FOOD

We’re made up of more than

115,000

Collaborating in

454

talented individuals

DRINKSThe Five Principles

Proudly
operating sincedrinks

Quality Responsibility Mutuality Efficiency Freedom

Operating in more than
Global HQ
in McLean,
Virginia, U.S.

S U S TA I N A B L E I N A G E N E R AT I O N R E P O R T S E P T E M B E R 2 0 1 7- 2 0 1 8

guide all we do, uniting
Associates across geographies,
cultures and generations

MARS EDGE

6INTRODUCTION TO THE

About This Report
We’re at the beginning of our journey
to implement the Sustainable in a
Generation Plan. This report outlines
our progress against each strategic Pillar
during the first year and our strategies
to deliver on our long-term ambitions.
Also, we share achievements against oursustainable sourcing targets, which we’vebeen working toward for several years.

At Mars, we’ve always believed our business only thrives when the people we work withsucceed too, and we won’t be able to secure a prosperous future for generations to comewithout a healthy planet. Climate change, water stress, poverty and many other socialand environmental challenges are holding back the potential of people, communities andbusinesses. It’s time for urgent action and a new approach. That’s why we launched our
Sustainable in a Generation Plan in September 2017.
During the past decade, we’ve focused on the impact of our direct operations. Our newplan extends our ambition much further to include our entire value chain, from farmers andsuppliers to manufacturing facilities, and our business offices and consumers. It reflects ourcommitment to making the world a better place for future generations.
The Sustainable in a Generation Plan has three interconnected strategic Pillars that we believe
are essential for sustainable growth:

thriving

healthyplanetnourishingwellbeingpeopleOur goal is to reduce ourenvironmental impacts inline with what science says isnecessary to keep the planet
healthy—focusing on climate
action, water stewardshipand land use.

Our goal is to meaningfully
improve the working lives of 1
million people in our value chain
to enable them to thrive by
increasing incomes, respecting
human rights and unlocking
opportunities for women.

Our goal is to advance science,
innovation and marketing in waysthat help billions of people and theirpets lead healthier, happier lives—
focusing on food safety & security;
product & ingredient renovation; andresponsible marketing & labeling.

S U S TA I N A B L E I N A G E N E R AT I O N R E P O R T S E P T E M B E R 2 0 1 7- 2 0 1 8

Sustainable

Development Goals
The Sustainable Development
Goals (SDGs), also known as the
Global Goals, offer a powerful
guide for this next generationof growth.
While our efforts will contributeto multiple SDGs, we’ve madea strategic decision to focus on
three goals that align most closelywith the Pillars of our Sustainable
in a Generation Plan. We’ve
selected the goals below as theones where we can contributemost to solutions, while growing
our business in a sustainable way.

TowardTransformational
ChangeTransformational change requires
solutions that work at scale. That’s
why collaboration is a key part of ourapproach toward progress against
our Plan. As co-chair of the Consumer
Goods Forum working groups on
deforestation and on forced labor,
Mars is helping lead the way to findindustry-wide solutions to thesechallenges. We’re collaborating with
suppliers to transform raw material
production. For example, we're at the
beginning of a journey to transform theway we source palm oil. We're working
with our suppliers to streamline
our supply chain by including fewer
refineries, which will enable us totarget our resources more effectively.
We’re tracking our sustainability
progress as accurately as possible
by continuing to work with outside
experts. Together we’re developing
better environmental and social
accounting methods that we’re bothusing internally and sharing externally.
At the UN Climate Conference in 2017,
for example, Mars hosted a workshop
attended by more than 25 companies
and research organizations to drivealignment in approaches to measure
GHG emissions.
Some of the impacts we want toachieve span the three focus areasof the Sustainable in a Generation
Plan. Our ambition to improve
livelihoods—for everyone from thefarmers in extended supply chainsto our Associates, customers andconsumers—is being delivered by all
three Pillars, through work to provide a
healthy planet, fair labor practices andnutritious food.
7

sustainablesourcing

89%

Our journey toward becoming a sustainablebusiness started well before the launch of
our Sustainable in a Generation Plan in 2017.
Here, we report our progress against the key
metrics we've historically used to track ourefforts to source sustainably. We’ll continue
to monitor and make progress against thesegoals, in addition to those in our new Plan.

(2016)
90%
100%

100% of packaging recyclable by 2025(2015)
100%

100% of black tea from certified sources(ongoing)(2016) >50%
47%
(2014)
100%

100%

100% of cocoa from certified sourcesby 2020

100% of coffee from certified sources(ongoing)(2016) 43%
57%(2013)
100%

100%

100% of fish and seafood fromcertified sources, or those endorsed
as sustainable, by 2020(2016)
10%

96%

100% of palm oil from certified
sources (ongoing)

100%

100% of rice from farmers working
toward Sustainable Rice Platformstandard by 2020

Key
Target already achieved

On track to reach target

Not on track to reach target

We continue to achieve 100 percent sourcing
from certified sources for palm oil, coffee
and black tea—targets we achieved in 2013,2014 and 2015 respectively. In 2017, wemade meaningful progress toward our fishand seafood sourcing target. Mars Petcare
increased the proportion of fish and seafoodsourced from certified sources, or thoseendorsed as sustainable, by 14 percentage
points—from 43 percent in 2016 to 57
percent in 2017.
With rice, we made progress against ourtarget. We’re encouraging farmers to work
toward the Sustainable Rice Platformstandard, which helps farmers increase theirresilience to climate change, reduce theenvironmental impact of rice production andimprove incomes, among other benefits.
In 2017, Mars Food sourced 96 percent of
its rice from farmers working toward thestandard, after scaling up a pilot project,completed in 2016. The pilot, with basmati
rice farmers in Pakistan, saw a 32 percent
increase in farmer income and a 30 percent
reduction in water use. Such learnings showthat aligning with the standard has a positive
impact for our business, the farmers we relyon and the planet we share.

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We commend
Mars Food for its
commitment tomeaningfully improve
the sustainability of theworld’s rice supply.

In November 2017, we endorsed the
Cocoa and Forests Initiative frameworks
to end deforestation, starting in Côte
D’Ivoire and Ghana, the world’s maincocoa producers.

JAMES LOMAX
Programme Management Officer,
UN Environment

As we scale up our responsible sourcing work,
two of the biggest challenges we face arelinked to packaging use and cocoa production.
We’re working to make progress on both.
Take cocoa production, for example. It’s been
linked to child labor and deforestation in someof the regions where the crop is grown,
and cocoa farmers often struggle to earn
an income sufficient to support themselves
and their families. Mars remains committed
to removing hazardous child labor anddeforestation from the sector’s supply chains,by encouraging suppliers and governments toactively implement programs and partnerships
to address these conditions directly.
In 2017, we sourced 47 percent of our cocoafrom certified sources, a slight decrease
compared to 2016. We aim to return to morethan 50 percent. We continue to look for ways
to support cocoa farmers to improve theirlivelihoods and farm in a way that
protects forests.
8

A CLOSER LOOK AT OUR

three pillars

2 0 1 7 S U S TA I N A B L E I N A G E N E R AT I O N P L A N R E P O R T

9 9

healthy

During the past decade, we’ve reduced
our GHG emissions through efficiency andrenewable electricity use and virtuallyeliminated waste to landfill. We’re pleased
with this progress, but these steps alone
aren’t enough. We now have a better
understanding of how we can reduce
our environmental impact. The science isclear, and the data we have about our own
business and our footprint is stronger.

planetWater
Stewardship

Climate
ActionNew Goal

New Goal-0.7%

Reduce greenhouse gas (GHG) emissions
across our value chain by 27%(from 2015 levels) by 2025 and 67% by
2050 to do our part to keep the planet
from warming more than 2 degrees

6.5%(2016)

50%

-27%
-16%

Cut unsustainable water use in ourvalue chain in half (from 2015 levels)by 2025

3.3%(2016)

10%

7%

20%

Reduce absolute GHG emissions fromdirect operations by 20% (from 2015
levels) by 2020
0 kt

15%

Improve water efficiency at waterstressed sites by 15% (from 2015 levels)by 2020

1.2%(2016)

2.9%
2.7%

Land
Management

10%

Improve energy efficiency in direct
operations by 10% (from 2015 levels)by 2020+7%(2017)
2.8M ha(2015)

0 kt

Maintain zero waste to landfill fromour direct operations by 2020

Hold flat the total land area associatedwith our value chain, compared to 2015

Key
Target already achieved

On track to reach target

Not on track to reach target

That’s why we’re working to take climate
action, improve water stewardship andpromote sustainable land use—within our
direct operations and across our entire
value chain.
A year ago, we committed to deliver anambitious agenda toward our goal to reduce
our environmental impacts in line with what
science says is necessary to keep the planet
healthy. We’ve started mobilizing to achieve
this goal, setting up new partnerships andprojects and working out how best
to monitor progress.

Climate Action

We’re just beginning to implement
efforts to source our ingredients in a waythat lowers their carbon footprint,
for example: by sourcing from areas withlow deforestation risk and partnering with
suppliers to produce ingredients
more efficiently.
As renewable energy projects come online,
we expect to continue reducing emissions
from our direct operations. By the endof 2018, we’ll expand our purchase ofrenewable electricity to cover demand fromall our direct operations in 10 countries.
We’re also working to reduce energy use
in our factories by installing more energyefficient machinery and processes.
Finding better ways to dispose of waste
is important for creating a cleaner future.
We maintained our zero waste to landfill
commitment, except for a small amountof factory waste (less than a fraction ofa percent of our total volume). This wasdue to a vendor unexpectedly going out
of business. We’ve learned from theexperience and have identified new waste
vendors along with back-ups
to mitigate this issue.

Plugging
in to the Sun
Down Under
Mars Australia will match all
its electricity needs with solar
power starting in 2020. That
will be enough electricity to
produce 510 million packetsof EXTRA® chewing gum.
We’ve signed two 20-year
agreements with renewableelectricity producer Total Eren
to add new solar power to theAustralian national grid. The
first project, the Kiamal Solar
Farm in Victoria, is scheduled tostart operating in 2019. And wehave another project plannedin New South Wales.

Climate change caused by greenhouse gas
emissions will impact us all. We set a sciencebased target to reduce emissions acrossour value chain, from the production andprocessing of the raw materials our brands
use through to the factories and offices
we own. We’ll reduce our emissions by 27
percent by 2025 and by 67 percent by 2050.
The slight increase in our emissions during
2017 reflects reductions from our direct
operations balanced with growth in someof our business areas. This resulted in amoderate rise in emissions because we
sourced additional ingredients.

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10Water Action
Water scarcity is a major challenge facing
humanity, with 40 percent of the world’s
population already affected. We’ve mapped
our water use globally to understand where
our water comes from, either naturalrainfall or irrigation. In regions where we
rely on irrigation, we assessed whether
these watersheds are experiencing stressand prioritized our efforts on the moststressed. Our goal is to eliminate water usethat exceeds sustainable levels.

Growing Ricewith Less Water
Mars Food works to protect themarshlands of the Doñana National
Park in southern Spain. Together
with partners Ebro, Danone,
Optiriego, UN Environment andWWF, Mars Food encourages rice
farmers to reduce water use in
the Guadalquivir River Delta byworking toward the Sustainable Rice
Platform Standard. By doing this,farmers will save 50 million cubic
meters of water by 2022. Alongwith other initiatives on rice, this is
helping us meet our goal to reduce
unsustainable water use by 50
percent by 2025.

We’ve started action to reduce water
consumption during the production of ouringredients. In Pakistan, for example, Mars
Food partners with UN Environment, theInternational Rice Research Institute andWWF to support more than 600 basmati
rice farmers in reducing their water use,achieving a 30 percent reduction since2016, while increasing farm productivity.
Programs like this improve ourunderstanding of water stress. In 2017,
we saw a slight increase in use of waterfrom water-stressed regions. This wasdue to sourcing more of our waterintensive materials from such areas. We’ll
use our increasing knowledge to informpurchasing decisions and water-efficiency
improvement programs.
We also work to reduce water consumed byour direct operations. Mars factories madegood progress toward increasing water
efficiency at water-stressed sites in 2017.
Since 2015, we’ve achieved a 7 percent
reduction in water intensity.

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LandManagement
We work to reduce the area used to
grow our key ingredients by, for example:
collaborating to help farmers boost yields
and tackle the pests and diseases that harm
their crops. The modest increase in our landarea during 2017 reflects growth in ourbusiness, which meant we needed a larger
area of land to produce ingredients.
When we make acquisitions, it takes time toestablish our strategies in the new business,meaning we see modest increases. We may
see progress toward our land goal as our
Sustainable in a Generation Plan becomes
embedded.
The expansion of agricultural land is a major
cause of deforestation. Freezing the land
footprint associated with our value chain
will help us prevent forest loss. Our action
focuses on five raw materials linked tolarge-scale deforestation: beef, cocoa, palmoil, pulp & paper and soy. One highlight in2017 was the progress we made toward ourcommitment to source palm oil free fromdeforestation. We achieved 99 percent
traceability to mill, where oil is extracted.
This enabled us to explore whether our
suppliers meet our six key sustainability
criteria, which include forest protection
measures. We used this data to inform how
we awarded business for 2018. We alsocollaborated to help protect forests beyond
our direct supply base.

Fanninga Clean Energy
Revolution
We’re reducing our carbon
footprint by using renewableenergy. In fact, we have enoughwind power to produce all the
M&M’S® sold globally. To celebrate
this, and raise awareness of thebenefits, we leveraged the reachof M&M’S® (one of our largest
brands) to rally consumers aroundrenewable energy. Through ourFans of Wind campaign, which
launched in the U.S. last fall, we
shared with more than 99 million
people how we can all join theclean energy revolution.

Through our work with The Forest
Trust, we’re developing landscapeinterventions to protect the
Leuser Ecosystem, a biodiversity
hotspot in Aceh, Indonesia.
11 11thrivingpeopleRespecting
Human Rights

93%

Mars manufacturing sites reachedwith Responsible Workplace
human rights due diligence

Increasing
Income89K

Farmers in six countries reached witha combination of good agricultural
practices, access to inputs, the latest
plant science and ongoing support

Unlocking
Opportunities

3,500

Women in cocoa farming
communities reached with savingsand loan programs

The Thriving People Pillar of our Sustainable
in a Generation Plan focuses on three areas:
increasing incomes, respecting human rights
and unlocking opportunities for women.

Increasing
IncomeWe believe our business will thrive forgenerations to come only if the people wework with—from the farmers who produce
raw materials used in our products to our
Associates—thrive too.

The world relies on smallholder farmers. But thecurrent supply chain model has left too many ofthem living in poverty. A range of actors in society
have responsibility to tackle this challenge, andwe’re reflecting deeply on how we can best fulfill
our role as a business. We envision a future forfarming in which everyone has the opportunity
to thrive. To get there, we must address incomeswith the right investment, programs andimprovements across our industry.

Yet many people linked to global supply
chains are vulnerable to exploitation or living
in poverty, facing deeply-rooted and pervasive
barriers to success.

We’re beginning our work by engaging
smallholder farmers, together with our suppliers,in three extended supply chains: cocoa, mint
and rice.

Governments have a key role in addressingthese challenges, and we believe business canand should be a part of the solution, too. Oneof the best ways to drive change is to bring
sectors together to tackle common challenges.
That’s why we’ve hosted stakeholder dialogues
with more than 100 people from business,government and civil society this past year,
having discussions focused on our global
approach to human rights, our efforts in the Thai
Fish sector and our work to increase smallholder
farmer incomes. We don’t have all the answers,
and these convenings generate valuable insight
to inform our approach.

Additionally, we work with the Livelihoods
Fund for Family Farming in our vanilla andcocoa supply chains, using agroforestry anddiversification to support farmers to improvetheir incomes. Our efforts are informed
by decades of plant science research andexperience, which demonstrate high potential
to increase productivity and profitability forsmallholder farmers.

Through these efforts, we’ve set a goal tomeaningfully improve the working lives of one
million people across our value chain to enable
them to thrive.

In 2017, we launched the Farmer Income Lab—acollaborative ‘think-do tank’ that brings together
Mars Associates and experts from academia, theprivate sector, civil society and government—toidentify ways to increase farmer income. In our
first year of this journey, we’ve focused on better
understanding barriers to progress, as well as
identifying what works in meaningfully improving
farmer incomes.
Just this summer, we brought together a diverse
group of experts for an open debate on these big
challenges. And through the Farmer Income Lab
website, we interact with thousands of people
who are passionate about finding solutions anddiscussing the Lab’s ongoing research.

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Better Livesfor Mint Farmers
Farmed mint flavors 65 percent ofour chewing gum and mint products.
Mars Wrigley Confectionery’s
AdvanceMint™ program is advancing
mint science and helping mint
farmers to reduce their water use bya third over five years.
This work aims to reduce costs andincrease yields, as well as increase
income for farmers. Through theAdvanceMint™ program, 20,000
mint farmers in India will receive
training in good agricultural practices
over five years. In 2017, this training
helped more than 2,600 farmers
increase their yields by more than 67
percent, boosting their incomes andsupporting their success.

12Partnering

Respecting

Human Rights
Our human rights strategy focuses on advancing respect for rights in three areas:
our operations; with our first-tier suppliers; and in extended supply chains in relevant sectors.
This work is grounded in our Human Rights Policy, which outlines our commitment torespecting human rights in our own operations and advancing respect for human rights inextended supply chains. Additionally, our Supplier Code of Conduct describes the humanrights standards we expect our Tier 1 suppliers to uphold and is informed by international
human rights standards and best practice.
We prioritize work on sector supply chains—such as cocoa, fish and palm oil—in which
the most severe human rights risks, including forced labor and hazardous child labor, may
be present. And we work with a wide range of partners and platforms to drive systemicchange—from our leadership in the development of the Consumer Goods Forum’s Priority
Industry Principles on Forced Labor to our work in the Leadership Group on Responsible
Recruitment with the Institute for Human Rights and Business, to our own long-term strategic
partnership with labor expert Verité.

´

with Verite

In our own workplaces, for example, we’ve
conducted in-depth due diligence analyses ofhuman rights risks in 93 percent of 130 relevantMars manufacturing sites across 32 countries.
Understanding these risks in our own facilities
helps us hold ourselves to the same standards we
expect of our business partners. As a result of thesefindings, we terminated business relationships withthree contract labor providers who were unable
to meet our standards. And we partnered with anadditional four contract labor providers, who werewilling to improve their practices, like clarifying
overtime policies, improving pay practices, andaddressing potentially discriminatory practices.
In extended supply chains in various sectors, like Thaifish, we’re also working to drive change. In 2016, wepublished our Thai Fish Human Rights Action Plan,
outlining work with supply chain partners and others
to assess and improve conditions for workers.
We source small amounts of fish from Thailand forsome of our cat food products, and forced laborand other complex human rights challenges havebeen reported in this sector. In this initial phase of
our plan, most of our suppliers now participate ina labor monitoring program, with an emphasis on
ways workers can report issues and seek assistance.
We’re providing training to our Tier 1 suppliers, andwe’ve assessed the nature and extent of risks to help
us design the right management systems. We’re
optimistic about the potential for positive impact
going forward, and our intention is to develop a
best-in-class approach in Thailand that we can rollout elsewhere.

In 2017, Mars and Verité launcheda long-term partnership to takeaction, foster new insights and leaddialogue on critical global human rights
challenges.
Through our collaboration with
Verité, an independent, international
nonprofit working in more than 70
countries on fair labor issues, we seek
to advance respect for human rights
across our own operations, with ourTier 1 suppliers and across extended
supply chains in relevant sectors. We’refocusing our efforts to ensure we havethe right policies and standards in place,provide in-depth advice and counsel toour raw material sourcing teams andassess human rights risks in relevant
sector supply chains.

Our partnership with
Mars has the potential totransform lives around theworld. Verité is proud of thisopportunity to promote a
worker-centered approachto human rights on such asignificant scale, and we lookforward to continuing thiswork together.
SHAWN MACDONALD
CEO, Verité

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13

Unlocking Opportunities
for Women

Women play a powerful role in Mars’ history and current leadership, and the evidenceshows clearly that women’s advancement and empowerment provide a high return on
investment across the value chain. If women’s economic contributions aren’t fully realized,then we’re all leaving value on the table. This work is about fairness and efficiency across
our workplaces, the marketplace and extended supply chains.

This has beenamazingly helpful formy mental wellbeing
knowing that I can plan
for retirement andnot feel the burden of
my loan for as long as
originally thought.
DR. CRYSTAL SAPP
Director of Veterinary Quality,
Banfield

An example of our work in extended supply chains includes efforts to unlock opportunities
for women in cocoa farming communities in Côte D’Ivoire. Through an ongoing partnership
between Dove® Chocolate, CARE® International and with support from the Jacobs
Foundation, 3,500 women in cocoa farming communities participated in savings and loan
programs. The Village Savings and Loan Program builds financial literacy and generates
concrete opportunities to improve livelihoods. Loans are typically used for a variety of
purposes, including investments in crops other than cocoa, which helps cocoa-farming
families diversify their income and increase their economic security.

Relieving

In the marketplace, we’re proud to support The Unstereotype Alliance, a powerfulcollective commitment co-convened by UN Women and Unilever, to strengthen genderequality and eliminate gender stereotypes in advertising.

of Student Debt

In our own workplaces, we’re working to increase the percentage of female managers
we employ—currently this stands at 42 percent. We’re striving for gender-balanced teams
and working to ensure our culture promotes and supports our family-friendly policies,
like flexible working and parental leave for men and women. In 2018, we published our
first Gender Pay Gap Report in the U.K., where we found that the current difference
between the median hourly earnings of men and women is 2.5 percent. While this is much
lower than the U.K. national average of 18.4 percent, we know there’s still more to do tounderstand equal pay globally.

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Veterinarians

Research shows veterinarians in the
United States carry an average of$167,000 in student debt. Banfield Pet
Hospital, part of Mars, launched an
initiative in November 2017 to support
the financial health of veterinarians.
The program includes a low-interest
refinancing option, a monthly student
loan contribution and a one-time
payment for eligible doctors to
reduce their student debts. Throughthis investment, Banfield hopes tohelp address this industry-wide issue
and create an environment where
veterinarians can focus on what
they do best: providing high-quality
veterinary care to pets.
14

At Mars, we know that advancing nutrition,
health and wellbeing is essential for our
growth. As the world faces both extremesof obesity and malnutrition, we’redetermined to use our global reach to makea positive impact.

nourishingwellbeing

Product & IngredientRenovation
59M(2016)

99%(2016)

400M
99%

1B

Encourage families to share 1 billion
more healthy meals by 2021

100%

All chocolate and confectionery
below250 kcal per portion

Responsible Marketing& Labeling95%(2016)

97%(2016)

95%
97%

97%
98%

Media content compliance >95%

Media placement compliance >97%

99%
(2016)
99%

100%

Implement front-of-pack calorie
and GDA labeling (or equivalent)on all chocolate, confections
and food products

We believe people should have access tothe products and information they needto live healthily. We’re proud that our
products and services offer a range ofbenefits—from nutrition to oral care, tojust plain fun. In addition to food and drinks
for people, we’re also delighted to offer a
growing array of foods and services to keep
pets healthy.
Within our Nourishing Wellbeing strategy,
we focus on three core areas: food safety &security; product & ingredient renovation;and responsible marketing. We holdourselves accountable with continuingresearch and action. In the past year,
we’ve organized to realize our ambition toadvance science, innovation and marketingin ways that help billions of people andtheir pets lead healthier, happier lives.

Food Safety &Security

Food security and food safety are intrinsicallylinked. If food isn’t safe, it isn’t food. For foodto provide nutrition and nourish wellbeing,
it must be safe. Approximately one in every
ten people on the planet suffers from eating
unsafe foods. So, our goal is to help combat
food insecurity by addressing food safety
challenges around the world. No one entity
can tackle these challenges alone.
That’s why in 2015 we created the Mars
Global Food Safety Center —a precompetitive facility focused on research,training and collaboration, and dedicatedto helping ensure safe food for all.
At Mars we have multiple global food safety
partnerships with UN agencies, foundations,
universities and governments, as well as
collaborations with organizations such as
the World Food Programme (WFP) and
the Global Alliance for Improved Nutrition(GAIN). And we’ve been using the powerof the Internet to facilitate a multi-partner
initiative to combat aflatoxin.

Challenging
Gamers to Solve
Food Toxin
Puzzles
We launched a global gaming
challenge through Foldit: an online
puzzle-solving platform that allows
anyone with a computer and an
imagination to crack complex scientificproblems. The first challenge is to findways to wipe out aflatoxin—a poison
produced by certain molds that cancontaminate staple foods, causing livercancer and stunted growth. This toxin
contaminates a quarter of crops, likemaize, and rice in the field, at harvestand in storage—contributing to foodwaste, as well as health risks. Enzymes
that can degrade the toxin might offer
an effective solution for material
in storage.
Working with partners including
the University of California, Davis;
Thermo Fisher Scientific; University ofWashington; Northeastern University
and the Partnership for Aflatoxin
Control in Africa, we’re asking players
to solve 3D puzzles that mimic the
structure of aflatoxin proteins. We
hope their answers might produce
quick solutions that would otherwise
take experts years to discover.
Hundreds of gamers from around theworld have produced more than 1.5
million designs that are currently
being tested.

Key
Target already achieved

On track to reach target

Not on track to reach target

15

Product & IngredientRenovation

During the past year, Mars Food has continued tofocus on increasing the number of healthy meals
shared by families. We’ve made good progress—
more than tripling our reach, to deliver 400 million
healthy meals, building on the 59 million achievedin 2016. To do this, we developed the Mars Food
Nutrition Criteria, setting ourselves challenging,industry-leading product reformulation targets basedon World Health Organization (WHO) nutrition
recommendations—with the aim of increasing thepercentage of our growth from products that meetthese criteria. By 2021, we aim for the bulk of ourportfolio to meet these nutrition recommendations,so these foods can be enjoyed “any day” on dinnertables around the world. We’re proud to report thattoday 72 percent of our portfolio (by sales volume)
meets these targets for calories, added sugar, sodium
and fats—up from 65 percent in 2017.
A small percentage of the Mars Food portfolio falls
outside our Nutrition Criteria because of the moreindulgent nature of the recipe. Labeling designed
to help consumers identify the difference between
these foods is now being rolled out, first with our
DOLMIO® brand in the U.K., and soon with our
UNCLE BEN’S® brand in the U.K. and Europe.
By 2021, we aim to have this information on all
our product packs, with updated labels.
In the meantime, we’re working to provide thenecessary guidance on product websites. Today thisinformation is online for approximately 70 percent
of our portfolio (by sales value).
At Mars Food, we’ve also reduced the amount of
sodium in our meals by eight percent globally since2016, progressing toward our commitment to cut
sodium in our food products by an average of 20
percent globally by 2021. And we’re working toincrease the percentage of our portfolio that includes
vegetables, whole grains and legumes.

All our tomato-based cooking sauces include
at least one portion of vegetables per serving.
In addition, approximately 35 percent of our riceproducts include one portion of whole grains orlegumes per serving. We’re preparing to introduce
new products offering whole grains and legumes
and expand the availability of our best-sellingwhole grain products.
Mars Wrigley Confectionery maintains 99 percent
compliance with our goal to limit all chocolate
and confectionery products to 250 kcal per
portion. To build on this commitment and increase
consumer choice, we’ve also started to launch
packs with even fewer calories. In 2017, Mars
Wrigley Confectionery, working with others in the
National Confectioners Association, launched a
new program with the nonprofit Partnership for a
Healthier America. Through this partnership, we
committed to dedicate more than $200 million
to develop products with fewer than 200 calories
and promote front-of-pack calorie labeling andeducation to help consumers eat a balanced diet—with chocolate and confectionery as an occasional,
delectable treat. Our partnership connects us
with other food manufacturers and enables us
to collaborate with retailers, governments andeducational institutions.

From advancing
transparency to improving
the nutritional quality of its
dinnertime foods, to reducing
calories in its confectionery
products, Mars is a leader
in helping consumers makehealthier choices.
NANCY ROMAN
CEO, Partnership for a Healthier America

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Responsible

Marketing &Labelling

Understandably, our consumers want to know
what’s in the foods they eat and serve theirfamilies. We use nutrition labeling and ourbrand websites to give consumers information
about our products to help them makeinformed choices. Today, 99 percent of our
products meet our commitment to include
Guideline Daily Amount (GDA) labeling, clearly
identifying the number of calories on front-ofpack and the amount of sodium, sugar, fat andsaturated fat in a serving on front- or back-ofpack. In some markets where a coalition ofindustry stakeholders and policymakers hasaligned around new front-of-pack labelingsystems, we’ve signed up to these labelinginitiatives to help consumers interpret nutrition
information through colors, symbols
or other graphics.

We also work with media planning and buying
agencies Mediacom and Starcom to collectdata on compliance with our commitment
not to place marketing communications onchannels where children under 12 (under 13
on digital platforms) make up more than 25
percent of the total audience. We developed ascorecard, to be completed by all 15 markets,that includes the percentage compliance andnumber of breaches per channel across six
types of media channel. We’re encouraged byour 2017 results and believe the findings will
help us continue to comply with the code in
the future.

Since we launched our Mars Marketing Codemore than a decade ago, we’ve developed
one of the most robust third-party auditing
and compliance systems for marketing in thefood and beverage industry. We focus on data
analysis, accountability of our Associates, atransparent approach to disclosure and internal
checks and balances systems to ensure a highlevel of compliance.
In 2017, Ebiquity was appointed as the thirdparty auditor to assess the compliance ofour marketing communications and media
content across print, TV, digital, social media
and posters. This rigorous process involves 29
compliance checks to ensure Mars’ marketing
communications across our top 15 markets
comply with our responsible marketing
commitments, as laid out in the code.

16

JOIN THE

conversation

Please visit Mars on our social media channels to learn more
and share content about how we're working to make ourbusiness sustainable in a generation.

@Mars@MarsGlobal
@Mars
@Mars

EXTERNAL ASSURANCE
This report has been externally assured by Lloyd’s Register Quality Assurance, Inc. (LRQA).
Conclusions and observations can be found in the full Report Assurance Statement on
Mars’ website.
Report Verification - LRQA’s approach summary
Lloyd’s Register Quality Assurance (LRQA) was commissioned by Mars to provide
independent assurance on its 2017 Sustainability in a Generation Plan Report to amoderate level of assurance and materiality of the professional judgment of theverifier using AccountAbility’s AA1000AS (2008).
LRQA’s assurance engagements are carried out in accordance with our verification
procedure. The following tasks though were undertaken as part of the evidence gathering
process for this assurance engagement:•

Assessing Mars’ approach to stakeholder engagement to confirm that issues
raised by stakeholders were captured correctly. We did this through interviews
and reviewing documents and associated processes.

•

Reviewing Mars’ process for identifying and determining material issues to confirm
that the right issues were included in their Report. We did this by benchmarking
reports written by Mars and its peers to ensure that sector specific issues were
included for comparability and interviewing key personnel across the Mars global
business segments.

•

Auditing Mars’ data management systems to confirm that there were no significant
errors, omissions or mis-statements in the Report. We did this by reviewing
the effectiveness of data handling procedures, instructions and systems, including
those for internal verification. We also spoke with some key people responsible
for compiling the data and drafting the Report.

@MarsGlobal

www.mars.com