Our Sustainable Sourcing Plan Share OUR SUSTAINABLE SOURCING PLAN WORKING TOWARD SUSTAINABLE GROWTH We’re tackling the most significant environmental and social impacts in our supply chain to help us grow sustainably. Our business segments work in partnership with experts, farmers and community groups to address challenges together. Sustainable sourcing is Mars’ commitment to drive down the environmental impact of our priority raw materials, advance respect for human rights across our value chain and help to lift farmers out of poverty. This will be defined through our five impacts; (greenhouse gas (GHG), water, land, human rights and income) and priority raw material sourcing commitments. Our Responsible Sourcing program is a fundamental part of this commitment. We want to work with partners who share our principles-based approach to business, and we expect our first-tier suppliers to respect human rights in their workplaces, in alignment with our Supplier Code of Conduct. DEVELOPING OUR NEW SUSTAINABLE SOURCING STRATEGY Since 2007, we have focused our sustainability efforts on our priority raw materials, including black tea, cocoa, coffee, fish, mint, palm oil, peanuts and rice. In 2014, we added commitments on beef, paper and pulp, and soy as part of our Deforestation Policy. Our updated sourcing strategy will cover 23 raw materials (including those listed above), covering 60 percent of our sourcing volume. The strategy will tackle the five impacts most material to our supply chain and stakeholders: Environmental Land use GHG emissions Water use Social Income Human rights We’re using input from our external partnerships and our knowledge of geographical risks to identify the impacts relevant for each of the 23 targeted raw materials. This will help us develop the most effective goals, policies and implementation plans to mitigate each impact. For example, our plan to tackle deforestation is a good demonstration of our approach to tackle land use and GHG emissions. We have clear goals and implementation plans for the raw materials where deforestation causes the most concern: beef, palm oil, paper and pulp, and soy. Our commitments and impacts-based approach will enable us to make rapid progress on eliminating deforestation in the most sensitive areas of our supply chains. Many risks in our supply chain are linked to environmental degradation and climate change, but potential social impacts are also concerning. In addition to our Supplier Code of Conduct, we released our Human Rights Policy in 2014, and have also appointed a Human Rights Director. In accordance with the UN Guiding Principles on Business and Human Rights, we are implementing a due diligence process to identify, mitigate and remediate adverse impacts on human rights in our supply chain. Our CARE Framework guides our approach to human rights. PUTTING OUR STRATEGIES INTO ACTION WORKING WITH FARMERS The Food and Agriculture Organization estimates that 84 percent of the 570 million farms worldwide are fewer than two hectares and are owned and run by families. These smallholdings, found mainly in low-income countries, support more than two billion people worldwide. Many of our raw materials, including cocoa, coffee, and tea, are grown by smallholder farmers. Because of the small size of their holdings, they’re particularly vulnerable to climate change impacts, water stress, soil degradation and plant diseases. Poor training and lack of access to markets and technologies also result in lower yields and lower incomes. We work with experts and community groups to improve farmers’ resilience and livelihoods, and also to help secure a sustainable and high-quality supply of raw materials for the future. We apply science to sourcing challenges. The Mars Center for Cocoa Science (MCCS) in Bahia, Brazil, leads our work on cocoa breeding, agroforestry systems, and land rehabilitation. Through MCCS, we’re supporting various initiatives to sequence the genomes of key crops, including cocoa and peanuts. This information is shared with breeders, who can use it to identify traits of disease resistance, enhance yields, pursue efficiency in water and nutrient use, and improve climate change adaptability. This should lead to healthier, stronger and more productive plants that can improve farmers’ yields and incomes. We also work directly with farmers, and as part of our Vision for Change program, are building Cocoa Development Centers (CDCs) and Cocoa Village Centers (CVCs) in Côte d’Ivoire and Indonesia. CDCs educate farmers on managing their land and crops efficiently, and CVC operators provide farmers with good-quality plants, fertilizers and pesticides, and help with training and business management. Together with Basmati rice farmers in Pakistan, we are working on a contract-farming sourcing program to introduce alternate wetting and drying, an irrigation technique that reduces water and GHG emissions and improves yields. We’re also joining the Swiss development organization, Helvetas, in a project to improve water efficiency and productivity for rice growers. Nearly 1,000 Pakistani rice farmers will directly benefit from this initiative. Our local partners include international rice company Rice Partners Limited and the nonprofit International Rice Research Institute. Together with Danone, we launched Livelihoods 3F, a mutual investment fund that is investing €120 million over 10 years on smallholder farmer projects in Africa, Asia and Latin America. The fund has three objectives: Economic: Increase crop yields and farmers’ incomes. Social: Empower farmers, especially women, and improve the livelihoods of farming families. Environmental: Promote responsible farming practices and technologies to improve climate change resilience. STRIVING FOR A BETTER WORLD See Our Principles in Action