Nestlé – Right to Water

and Sanitation

Christian FrutigerPublic Affairs, Nestlé S.A.Lisbon Consultation4 November 2010

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Nestlé Corporate Performance Model

Our ambition

• Be the recognized leading NHW company

• Be a reference for financial performance

• Trusted by all stakeholders

Competitive advantages

• Products & brands

• R&D capabilities

• Global presence

Nestlé Model – every year

• 5%-6% organic growth

• EBIT margin improvement

• Improving capital efficiency

• Market leadership

Nestlé culture, values and principles

Growth drivers

• Nutrition, Health and Wellness (NHW)

• Emerging consumers (PPP)• Out-of-home (OOH)• Premiumisation

• People, culture and values

Operational pillars

• Innovation and renovation• Operational efficiency• Whenever, wherever,

however• Consumer communication

Sustainability

Compliance – NCBP, Laws, Standards

• Market leadership

History

1998: First edition

2002: Revision and Integration of the first 9 UNGC Principles

Nestlé Corporate Business Principles 1

2004: Revision and Integration of the 10th UNGC Principle

2010: Fully revised edition published; Corporate Responsibility to Respect Human Rights; recognition of Right to Water.

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Nestlé Corporate Business Principles 2Commitments (examples):

UN Global Compact Principles, cuttingacross all NCBP.

Fundamental ILO Conventions and ILO Tripartite Declaration for Multinational Entreprises

OECD Guidelines for MNEsOECD Guidelines for MNEs

Nestlé Policy on Environmental Sus-tainability and Water Commitments

And: « Where our principles and regulations are stricter than local legislation, the higher standard applies ».

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Clean drinking water facilities in Mozambique in partnership with IFRC

Water: The Nestlé Commitments

Peter Brabeck proactive in international fora

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Why is water important to a food and beverage company?

Agriculture - raw materials70% of global water withdrawal 3000 l of water per kg of raw materiallow efficiency

Processing washing, cooking washing, cooking 4 l of water per kg of product sold

Consumer use food preparation, hygiene

Bottled waterNestlé Waters uses 0.0009% of global freshwater

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Creating Shared Value: Water

Helping tomato farmers use 50% less water, Parma, Italy

Clean water and sanitation for 50,000, especially women, in Côte d’Ivoire

Irrigating dairy farms in Moga, India, while mapping supply chain water use with IWMI

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Responsibility to RespectWater Stress Index for Direct Operations

Two main types of water stress indicators

- Freshwater availability per capita: “the smaller the amount of water available per person in a river basin, the higher the water stress”.Focus on areas where competition around water among different sectors is strong and will exacerbate (World Resources Institute-Washington DC).

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Washington DC).

- Water withdrawals to water availability: “the larger the volume of water withdrawn, used and discharged back into a river, the more it is degraded and/or depleted, and the higher the water stress”.

The higher the water stress the stronger the competition between society’s users and between society and ecosystem requirements (ETH, Institute for Environmental Engineering – Zürich).

Mapping Direct Operations with Combined Index (450 Factories)

WSI (ratio withdrawals

to availability)

Class

GWT 2025 projection

(m3/person/year)

<0.1 1 >40000.1-0.2 2 1700-40000.2-0.4 3 1000-17000.4-1 4 500-1000

>1 5 <500

A Factory 1 2 1.5B Factory 1 2 1.5B Factory 1 2 1.5B Factory 1 2 1.5C Factory 5 2 3.5C Factory 5 5 5.0C Factory 5 5 5.0D Factory 5 2 3.5D Factory 1 1 1.0D Factory 5 2 3.5E Factory 2 5 3.5

Country Site Google Earth ETH

Global Water Tool WRI

2025

Combined Index (WRI/ETH)

E Factory 2 5 3.5E Factory 3 4 3.5E Factory 1 3 2.0F Factory 5 2 3.5F Factory 5 3 4.0G Factory 4 4 4.0G Factory 4 5 4.5G Factory 5 5 5.0G Factory 5 5 5.0G Factory 5 5 5.0G Factory 5 5 5.0G Factory 4 4 4.0G Factory 4 4 4.0G Factory 4 5 4.5H Factory 3 2 2.5H Factory 4 3 3.5H Factory 1 2 1.5H Factory 1 1 1.0H Factory 1 1 1.0H Factory 1 2 1.5

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Responsibility to RespectWater Resources Review for Direct Operations

The WRR program is deployed in factories with high water related challenges:

- located in specific water stressed/water scarce regions and/or

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regions and/or - use of large amount of water in their process and/or- represent a strategic interest in value creation and/or- possible recorded issues encountered in the local water resources management.

Water Resources Review – 5 Pillars1.Quantity (alignment with long term water needs at factory level, factory water use mapping, risk of groundwater management in critical environments: aquifers overexploitation, abstraction of non renewable water resources,…)

2. Quality (awareness in health/quality issues by stakeholders, evolution of groundwater properties, quality monitoring, contamination risks upstream and downstream, access right quality of water for the different factory users, …)

3. Regulatory Compliance (more restrictive and fast changing regulations worldwide, ensure availability and respect of needed drilling and water abstraction

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worldwide, ensure availability and respect of needed drilling and water abstraction licenses, occurrence/impact of governmental/local water policies,…)

4. Site Protection (ensure active/passive security measures on water supply points and distribution systems; ensure groundwater protection practices,…)

5. Stakeholder Relations (risk for long term allocations in water com-petitiveenvironments, i.e.: irrigation vs. domestic/industrial needs; relationships with local stakeholders on water topics, community outreach programs within Nestlé CSV: land/well owners, authorities, communities, pressure groups,…).

At the same time:Human Rights Due Diligence Process with the Danish Institute for Human Rights (DIHR), including Water. Two year Global Partnership.

Starting:WSI Mapping and WRR-type Assessments in

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And of course Beyond Respect:Since 2006, Global Water and Sanitation Initiative –IFRC; LWF/IFAPA Water and Reconciliation since 2008, etc.

WSI Mapping and WRR-type Assessments in Agricultural Supply Chain.

Beyond RespectIFRC GWSI summary since 2005

- 109 Projects in 42 countries

- 4 Million beneficiaries to date

- 2015 target increased from- 2015 target increased from5 Million to 7 Million

- Donors include Red Cross, EU, Nestle and otherprivate sector donors

Water Pump – Ivory Coast, Nestle Funded

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Ivory Coast Water Projects

50 village water supplies and community latrine blocks completed (Nestle).

10 school water supplies and latrine blocks completed (Nestle).In addition 34 (SHELL) & 30 (Belgian Red Cross) water supplies

completed.124 water supplies in total.Water quality testing & monitoring with GovernmentAll projects include community & volunteer training, hygiene

promotion and sanitation.Total Beneficiaries 79,646 of which 37,094 (48%) are Nestle

supported. Expansion to 100,000 Nestlé beneficiaries by 2013.

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Beyond RespectLWF/IFAPA Water, Hygiene and Reconciliation in Rwanda

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Thank you!

What else…?

www.nestle.com/csvwww.creatingsharedvalue.org

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