Creating SharedValue

Dr. Claus Conzelmann, NestléWWF One Planet Webinars – 2degreesnetwork15 January 2013

Creating Shared Value

Howwas itmade?

Consumerpreference

Wheredoes it

come from?

What’s inmy food?

Nutrition Health Wellness

Responsiblesourcing

Environmentalsustainability

Context: Consumers

Creating Shared Value

Context: Scarcity

Creating Shared Value

Environmental scarcities: Planetary Boundaries

A safe operating spacefor humanityRockström et al.,Nature 461, 472-475(24 September 2009)

Creating Shared Value

Societal Scarcities:Do we invest enough in farming?

Creating Shared Value

3 Capitals: Financial + Societal + Natural

Forum for the FutureJonathon PorrittCapitalism As If The World Matters

Creating Shared Value

Creating Shared Value

Creating Shared Value

Nestlé in Society

Creating Shared Value

Three CSV focus areas at Nestlé

Nutrition Water Rural Development

Creating Shared Value

Creating Shared Value

Creating Shared Value

Plant ProteinsImproving Ingredient Impact & Nutrition

Plant proteins for affordable nutritionwith lower environmental impact

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10

Estimated water consumptionfor daily requirements of essential nutrients

Wat

erco

nsum

ptio

n(m

3 )

Quinoa13% protein

Local sources of proteins

Chickpeas22% protein

Lentils25% protein

White niebé21% protein

Red niebé25% protein

Bambara beans22% protein

Africa

S. America

Creating Shared Value

Water

Water efficiency

Advocate for effective water policies

Treat the water we discharge

Engage with agricultural suppliers

Raise awareness of water

Creating Shared Value

From water shortage to food shortage

“If present trends continue ... we could be facingannual losses equivalent to the entire graincrops of India and the US combined.”

Frank Rijsberman

Former DGInternational WaterManagementInstitute

Creating Shared Value

Rural Development

Crop Annual Production (Mt) Net Income (US$)

Oil Palm 30 2,740Rice 12 1,240Cocoa 0.5 620Coffee 0.5 500

Indonesian FarmersSource: Armajaro

Creating Shared Value

Developing Sustainable Cocoa Sourcing

Example Mexico:

Reduce imports, increasecompetitiveness & preservethe heritage of Mexican cocoa

Activities:

Research programs withINIFAP and preservinggermplasm of local hybridssince 1993

Technical Assistance andField Schools

Creating Shared Value

Responsible Sourcing:Aligned with Societal Trends

Rising consumer /customerexpectations

Increasing resource scarcity

Increasing regulations/standard complexity

Stronger civil society activism /Social Media

TrendsTriple Bottom Line

EconomicDevelopment

MaximumBenefit

Area

EnvironmentalImpact of Business

Activities

Social &Environment

Economically viablebusiness model along

the value chain

Efficiency &Social

Growth &Environment

Enterprise Impacton Staff / Society

EnvironmentalSustainability Social

Wellbeing

Creating Shared Value

• Direct engagement with670,000 farmers

• 17,000 support staff

Audit ProgramNestlé Supplier Code

• > 3’000 third party audits

Traceability Program• Material-specific Responsible Sourcing Guidelines (RSGs)

for high risk categories.• 12 categories prioritized

Consumer& Customer

Marketing& SalesAgriculture Procurement Manufacturing Supply Chain

Farm/Feedstock

Tier

1su

pplie

rs

Farmer Connect

Responsible Sourcing: Key to Delighting Consumers

Creating Shared Value

Drivers for Sustainability Improvements

Compliance

CompetitiveAdvantage

ProtectingFuture Business

Creating Shared Value

Competitive advantageby improving current business

Cost savings

Pay-back fromenergy & waste reduction

Growth driver

Sustainability benefitsas additional reason for

consumers to prefer our products

Drives Innovation& Renovation

EnhancesBrand Equity

Efficiency programmes(Lean, War on Waste)

CapitalInvestment

Creating Shared Value

Will the « Business Case » get us all the wayto Sustainability?

Compliance

CompetitiveAdvantage

ProtectingFuture Business

Contributes toSustainability

Creating Shared Value

Potential Sustainability Gap

Compliance

CompetitiveAdvantage

ProtectingFuture Business

Contributes toSustainability

Creating Shared Value

Creating Shared Value

50

75

100

125

150

175

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Inde

x

Total production volume Total on-site energy consumptionTotal water withdrawal Total water dischargeDirect GHG emissions Waste for disposal

+0.5%

-12%-17%

-28%

-38%

+73%

Decoupling growth from resource use:Carbon intensity improved 5% per year

Creating Shared Value

CDP 2012: Joint # 1

Creating Shared Value

Major Impacts are Upstream & Downstream

2001-2011 AbsoluteChange

Production +73%Water -27%Waste -12%GHG -17%

Agriculture & Materials Factories Logistics Consumer Use

Creating Shared Value

Humbert S, Loerincik Y, Rossi V, Margni M and Jolliet O (2009). Life cycle assessment of spray dried soluble coffee and comparison withalternatives (drip filter and capsule espresso). Journal Cleaner Production

Waste recovery:

Positive effects

Rawmaterials

Manufacturing/Packaging

Consumer

From Company to Product Life-cycle view

Creating Shared Value

Soluble coffee is more resource-efficient

Creating Shared Value

Minimising Waste in the Value Chain

MinimiseFood Loss

OptimiseResources

•Yields•Variety•Damage•Spoilageresistance

•Production•Yields

•Damage•Spoilage•Shelf life

•Damage•Spoilage•Shelf life

•Portions•Methods•Yields•Bioavailability

•Portions•Versatility•Re-value

•Water•Agriproducts•Methods•Transport

•Water•Energy•Technology

• Packagingmaterial

•Kg/kg

•Distance•Density•Weight

•Energy•Water

•Re-use•Re-value•Recycle

Limits toResources

Food Waste• Developing world: 630 mn Tonnes 40% in post-harvest & processing• Developed world: 670 mn Tonnes 40% in retail & by consumer

Creating Shared Value

Brands communicate sustainability

Creating Shared Value

Creating Shared Value

Creating Shared Value

Creating Shared Value

Detailled Information Beyond the Label

Creating Shared Value

Creating Shared Value

Partner & Engage

Creating Shared Value

are tastier & healthier

create value for society

preserve natural resourcesfor future generations

= GOOD FOOD, GOOD LIFE

More at: www.nestle.com/csv

Delighting our Consumerswith products that: