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Agenda

• Introduction to Responsible Sourcing

• Audit Programme

• Traceability Programme

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The Foundation of Nestlé Responsible Sourcing

“ The Nestlé Supplier Code is derived from our Corporate Business Principles and specify the minimum requirements we ask our suppliers to respect when doing business with Nestlé ”

“ The Nestlé Responsible Sourcing Guideline is derived from our Nestlé Supplier Code and defines additional category specific requirements that we ask our suppliers to implement when doing business with Nestlé ”

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Nestlé … [acts] in a way that reflects the Company´s

commitment to conduct our business activities in full

compliance with applicable laws and to be guided by

integrity and honesty.

Our consumers expect similar behaviour from all

parties that we deal with, especially from our

suppliers.

Preamble “Nestlé Supplier Code” 2010

Nestlé Supplier Code

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It is not only about palm oil and child labour...

“How was it produced?”

Responsible Sourcing Audits

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The relevant questions

“Where does it come from?”

Responsible Sourcing Traceability

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Agenda

• Introduction

• Audit Programme

• Traceability Programme

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Responsible Sourcing – Audit Programme

"...Remove the Worst, Promote the Best, Improve the Rest..."

Human Rights

Safety & Health

Business Integrity

Environmental Sustainability

SUBTIER SUPPLIER

TIER 1 SUPPLIER

Responsible Sourcing Audit Programme vs. Nestlé Supplier Code

FARM OR FEEDSTOCK

Responsible Sourcing Audit aims to verify implementation of the Nestle Supplier Code

at Tier 1 level

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Laws, Business principles, codes of conduct

The Process

Inform

suppliers Engage

& Assess suppliers

monitor

suppliers

qualify

suppliers

Objectives

Tracking KPIs

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Nestlé Supplier Code

• Signed by all suppliers

Buyers request suppliers to:

• Register on SEDEX* platform

• Welcome a SMETA** 4 Pillars audit (done by 3rd party auditors)

Corrective Action Plan: • Tracking of implementation by

Nestle • Follow up audit by 3rd party auditors

** SMETA = Sedex Members Ethical Trade Audit

* Sedex: 27,000 members / 23 industry sectors/ 150 countries

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Locations where Supplier’s Responsible Sourcing Audit took place in 2010-2012

December 2014

8’500 Suppliers audits done in all markets (Raw, Pack, S&IM) 400 Co-manufacturers audits done across all markets

49 Supplier days covering 6’000 suppliers

Where are we today?

By 2015: Total of 10'000 audits (85% of our global, in use, supplier pool)

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Locations where Supplier’s Responsible Sourcing Audit took place in 2010-2013

December 2014

2’465 Suppliers audits done in all markets (Raw, Pack, S&IM) (30% of Global Number) 50 Co-manufacturers audits done across all markets

Where are we today in LATAM?

By 2015: Total of 3’000 audits (30% of our global target of 10’000 suppliers)

Market Suppliers

AR10 191

BR10 656

CL10 258

CO10 151

DO10 65

EC10 96

MX10 623

PA10 140

PE10 146

VE17 139

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Summary, what will you get

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“ Removing the worst, promoting the best ”

Value for Nestlé

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Responsible Sourcing Audit is a common standard for all

industries and not only relevant for Nestlé, but also

recognized among the world’s leading food and beverage

companies (McDonalds, PepsiCo, Unilever, P&G, Mars, Kraft

Foods, Coca Cola, …)

Therefore multiple assessments will be avoided

The assessment of ethical practices is required and to be

upgraded if necessary, helping our suppliers, to

improve operations and get transparency of their strengths

and potentials

Full compliance with Nestlé‘s Responsible Sourcing

Initiative is mandatory and a basic requirement for all

suppliers

What is in it for Suppliers?

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Traceability Programme

SUBTIER SUPPLIERS

TIER 1 SUPPLIER

Responsible Sourcing Traceability Programme vs. RSG

FARM OR FEEDSTOCK

Palm Oil SoyaSugarPulp and Paper

HazelnutsVanillaFish and Seafood

Meat, Poultry and Eggs

Coffee Cocoa

Dairy Shea

“ Responsible Sourcing Traceability aims to verify implementation of the Responsible Sourcing Guideline by subtier suppliers (back to farm level)“

Why do we need traceability?

Process

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RS Audit RSG Assessment

3rd party audit Sedex – Smeta 4 pillar audit

(ethical audit)

2nd party assessment Partner organisation; RSG

assessment protocol

Ethical requirements

CSV

Category specific

requirements

Manufacturing site

(vendor site)

Upstream supply chain

Responsible Sourcing Audit compared to RSG Assessment

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