Nestle's Sustainability Commitment: Creating Value for All, Schemes and Mind Maps of Human Rights

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Good Food, Good Life

Nestlé in society Creating Shared Value and meeting our commitments 2017

Full report

Nestlé. Enhancing quality of life and

contributing to a healthier future

A year of positive impact Recognised by CDP as a global leader in tackling climate change and reducing carbon emissions across our supply chain. Nestlé was featured in CDP’s first-ever Supplier Engagement Ranking among 29 companies from over 3300 that were assessed. Participated in the launch of the Food Reform for Sustainability and Health (FReSH) programme to promote healthy, enjoyable diets using food produced with respect for our planet. Nestlé pledged to source only cage-free eggs by 2025. Nespresso invested in post-conflict Colombian coffee. Published Tackling Child Labour, our first report on child labour in the cocoa supply chain. It details our approach to this complex challenge and our work with partners on the ground to identify its causes and take remedial action. Nestlé Pakistan, in collaboration with Lahore University of Management Sciences and WWF, launched a local Water Plan to promote sustainable agricultural techniques, and improve access to safe water and sanitation. Nestlé Waters announced its enhanced collaboration with the Alliance for Water Stewardship, which will certify 20 factories to its global water stewardship standard by 2020.

January

Joined 37 companies at the Second Pacific Alliance Youth Summit in Santiago, Chile to launch the Alliance for YOUth in Latin America. Maggi announced a renewal of its global product portfolio with simple, recognisable ingredients, as part of its Simply Good initiative to inspire and offer tastier, healthier choices.

May

Nestlé Chairman Paul Bulcke was given the Concordia Leadership Award for 2017, for leading the company’s ongoing commitment to Creating Shared Value and supporting the UN’s SDGs. Launched our global youth initiative, Nestlé needs YOUth, at the Private Sector Forum of the United Nations General Assembly in New York.

September

November

Nestlé Waters, through the NaturALL Bottle Alliance, announced a partnership with Danone and Origin Materials to develop a PET plastic bottle made from 100% sustainable and renewable resources. Launched a series of Leading Together employee conferences to accelerate diversity and inclusion and help us reach our ambition to be a gender-balanced company by 2018. Announced our new 2020 commitments and long-term ambitions, in support of the 2030 United Nations Sustainable Development Goals (SDGs).

March

October

Hosted the Planting the Seeds for the Future of Food conference in Vevey, Switzerland, to explore issues around agriculture, sustainability and nutrition.

July

For individuals and families For our communities For the planet

Contents Welcome to this 2017 Nestlé in society: Creating Shared Value report. Aimed at shareholders, stakeholders and other interested parties, this report shares detailed information about our issues, impacts and performance during 2017. 2 A year of positive impact 4 A message from our Chairman and CEO 5 Creating Shared Value 6 Framing our CSV approach 7 Brands with purpose 8 Global opportunities and challenges 10 Contributing to the global agenda 11 Collaborating for a positive impact 12 Our commitments and progress 100 Business ethics and transparency 101 Taxation 102 Accountable and inclusive governance 103 Product safety and quality 104 The materiality process 105 Materiality and the Sustainable Development Goals 106 Responding to stakeholders 108 Our key performance indicators 111 External recognition 112 About this report 113 Independent assurance statement Where to find more information This document forms an integral part of Nestlé’s UN Global Compact (UNGC) Communication on Progress, together with: Nestlé – Annual Review 2017 Annual Review 2017 Enhancing quality of lifeto a healthier future.and contributingNestlé. Good Food, Good Life Our reports are made available online at www.nestle.com/CSV, where you can also find:

• More detailed information on our management approach and governance structure;
• Additional information on human rights due diligence;
• Our performance data;
• Case studies; and
• Additional audio and video content. Our Human Rights Reporting Framework and GRI Content Index are available as separate The Nestlé in society PDF downloads. section of our corporate website Our Annual Review Our Corporate Business Principles are the basis of our company’s culture and are available as a PDF download. Front cover: Our Nestlé Cocoa Plan in action Nestlé in society Reporting and governance 74 2017 highlights 75 Improving our environmental performance: our focus on water 76 Engaging on food loss and waste 77 Towards 100% renewable electricity 78 Moving forward in our own operations 79 Caring for water 87 Acting on climate change 91 Safeguarding the environment For the planet 15 2017 highlights 16 Nestlé for Healthier Kids 17 Food for life 18 Applying science for better health 20 Offering tastier and healthier choices 29 Inspiring people to lead healthier lives 40 Building, sharing and applying nutrition knowledge For individuals and families 45 2017 highlights 46 Global youth initiative: Nestlé needs YOUth 47 Empowering the next generation of farmers 48 Understanding our human rights impacts 49 Supporting collective action in our Thai seafood supply chain 50 Rural development and enhancing livelihoods 59 Respecting and promoting human rights in our business activities 63 Promoting decent employment and diversity For our communities

A message from our Chairman and CEO We are pleased to share with you our 2017 Nestlé in society: Creating Shared Value full online report. This year, we further integrated our public reporting on our financial and non-financial performance by including the highlights from our Nestlé in society report in our Annual Review, which is issued to our shareholders. We recognise that for our company to be successful over time and create sustainable value for shareholders we must also create value for society. This longer report provides greater detail on how we go about this, including our progress in meeting our 2020 public commitments and 2030 ambitions. The world is changing fast, with consumer expectations, competition and society evolving at an unprecedented pace. While our company is anticipating and adapting to these changes, two important dimensions do not change – our purpose and our values. Our purpose is to enhance quality of life and contribute to a healthier future. Our values, rooted in respect, guide our decisions and actions. This is deeply anchored in Nestlé’s culture and reflected in our Corporate Business Principles and our Code of Business Conduct. We want to help shape a better, healthier future. This starts with supporting young people. In 2017, we regrouped and aligned our healthy kids initiatives to better support parents and caregivers on their journey to raise healthier children. We also extended our Nestlé needs YOUth initiative globally to encompass our entire value chain and set out an ambition to help 10 million young people have access to economic opportunities by 2030. In recognition of our work in contributing to the UN Sustainable Development Goals (SDGs) through our Creating Shared Value approach, Nestlé received the Concordia Leadership Award. We have also renewed our commitment to the United Nations Global Compact. It promotes the principle of public–private collaborations in support of the SDGs. These efforts, among others, show that business has a vital role to play in building a better, more sustainable world for everyone. We look forward to your feedback on this report and on our progress towards meeting our 2020 commitments. Paul Bulcke Chairman Mark Schneider Chief Executive Officer

Maximising value creation Through our CSV approach we aim to create value not only for shareholders but also for society. Our CSV impact areas are those areas where our business intersects most closely with society, and where we can create the most value and make the most difference. These include:

• Nutrition, to enable healthier and happier lives for individuals and families, with a strong focus on infants and children;
• Rural development, to help develop thriving and resilient communities, and support better livelihoods for those we live and work with; and
• Water, to address an issue of critical concern for the planet and a lynchpin of food security. Our aim is to have a positive impact on society while we grow our business. We enable healthier and happier lives for individuals and families, we help develop thriving and resilient communities, and finally, we steward the planet’s natural resources for future generations. To guide us, we have developed long-term ambitions and specific commitments, against which we report our progress transparently each year. Essential to achieving our commitments is a robust approach to sustainability, human rights and compliance. Our values Creating Shared Value We believe that our company will be successful in the long term by creating value for both our shareholders and for society as a whole. This approach, called Creating Shared Value (CSV), remains the fundamental guiding principle for how we do business. It enables us to bring our purpose to life: enhancing quality of life and contributing to a healthier future. Underpinning all our efforts are our values, which are rooted in respect: respect for ourselves, respect for others, respect for diversity and respect for the future. Guided by these values, we work alongside our partners and stakeholders to ensure that our approach to CSV continues to inform all our behaviours, policies and actions. The business case for CSV A long-term approach to business has always been part of Nestlé’s DNA. Through CSV, we integrate sustainable development into business activities. This is increasingly important to long-term investors. CSV brings business and society together by generating economic value in a way that also produces value for society. Foods and beverages with a nutrition, health and wellness dimension perform better. Rural development programmes for farmers offer commercial differentiation to consumers, while responsible stewardship of water reduces costs and secures supplies for our businesses. Nestlé is one of a small number of corporations involved in the Embankment Project for Inclusive Capitalism which aims to encourage and measure long-term value creation. Our material issues Every two years, we invite an independent third party to conduct a formal materiality assessment. It helps us to identify the issues that matter most to our business and our stakeholders, and to better support our strategic decision-making and reporting. Issues of concern are evaluated to determine both risks and opportunities for our reputation, revenues and costs. Read more about the investor benefits of our work with individuals and families, in our communities Protect the future and the planet Laws, business principles, codes of conduct Nutrition, water, rural development, our focus areas Sustainability Compliance Creating Shared Value

Enabling healthier and happier lives Our 2030 ambition is to help 50 million children lead healthier lives Offering tastier and healthier choices Inspiring people to lead healthier lives Building, sharing and applying nutrition knowledge Related CSV impact area Nutrition Helping develop thriving, resilient communities Our 2030 ambition is to improve 30 million livelihoods in communities directly connected to our business activities Rural development and enhancing rural livelihoods Respecting and promoting human rights Promoting decent employment and diversity Related CSV impact areas Rural development Human rights Our people Stewarding resources for future generations Our 2030 ambition is to strive for zero environmental impact in our operations Caring for water Acting on climate change Safeguarding our environment Related CSV impact areas Water Environmental sustainability

For individuals

and families

Our commitments

Our values

For our

communities

For the

planet

See page 15 See page 45 See page 74 Framing our CSV approach We have 41 commitments to hold ourselves publicly accountable for our performance, and we report our progress against them every year. All our public commitments are directly aligned with our corporate purpose and the majority are supported by specific objectives towards 2020. See our progress against our commitments Underpinning all our efforts are our company values, rooted in respect: respect for ourselves, respect for others, respect for diversity and respect for the future. Find out more about business ethics Please see our feature stories, which demonstrate how we bring our purpose to life for individuals and families, our communities and the planet Our purpose: enhancing quality of life and contributing to a healthier future

Brands with purpose Every day, our brands enhance quality of life and contribute to a healthier future for individuals and families, for our communities and for the planet. Our Feeding Infants and Toddlers Study (FITS) in the US, found that 30% of older infants and toddlers eat very few or no vegetables each day. In 2017, as a result of our research, we launched Gerber Grabbers Strong Veggies Squeezable Puree, a nutritious snack providing one serving of vegetables (the first ingredient) and three-quarters of a serving of a fruit. Over the past few years, as part of a UK Government initiative, Purina has been looking at how pouches can be recycled. FelixTM pet food pouches were recycled in households across three towns and eventually turned into new materials – the aluminium into metal products and the plastic into reusable oil. The long-term relationship with the coffee producers has been put at the centre of the 2017 Nespresso consumer campaign. ‘The choices we make’ tells the story of the company investments into the community mill built in Jardín, Colombia, and the economic, social and environmental benefits it delivered. Globally, over 75 000 farmers in 12 countries are part of the Nespresso AAA Sustainable QualityTM^ Program which embeds sustainable agricultural practices on farms and surrounding landscapes.

Gerber Grabbers

Strong Veggies

Squeezable Puree

Nespresso ‘The choices

we make’

Packaging improvement

by FelixTM

Milo launched a low-sugar, ready-to-drink beverage for active kids in Thailand. In support, the Milo sports programme encourages a balanced diet and active lifestyle for children aged 6 to 12 years. The in-school scheme reaches more than one million children in 1000 schools throughout the country each year. Exploring transport options that lower emissions, Nestlé Waters converted 8% of its fleet in Italy from diesel to gas-powered vehicles at the start of 2017. Nestlé Waters North America is also introducing alternative fuels to reduce its carbon footprint, switching 589 ReadyRefresh delivery vehicles to propane gas by October 2017. Dairy 4 You is an initiative that helps us to continuously improve our sourcing and share information with consumers about our dairy products. This is incorporated into our brand messaging – such as with Nido in Chile and Ecuador in 2017 – we are more open and transparent to consumers about the animal welfare standards in our supply chain. Read more about brands with purpose in our Annual Report See our Brands section on Nestlé.com for more information

Milo Dairy 4 You Nestlé Waters

Over- and under-nutrition In 2016, around 815 million people lacked access to adequate nutrition (Food and Agricultural Organization). According to the World Health Organization, much of the world’s population suffers from deficiencies in essential vitamins and minerals, including an estimated 2 billion people who suffer from iron- deficient anaemia, and around 45% deaths in children under 5 years of age are associated with under- nutrition. Millions more people over-consume foods and beverages high in sugar, salt and fat, increasing the prevalence of obesity in developed and developing countries. Increasing personalisation There is a growing appetite for premium, authentic experiences and high-end, indulgent products and services. Nutrition is also becoming increasingly personalised, with ranges designed to meet the nutritional needs of infants, seniors, those with medical conditions – even pets. Changing consumer expectations The demand for more natural and organic foods and beverages without artificial colours and flavours is growing, as is the market for products free from lactose, gluten and sugar. Vegetarian and flexitarian diets, where consumers opt to eat less meat-based protein in favour of vegetarian alternatives, are also on the rise. Lifestyle changes In today’s hectic world, finding the time to exercise and eat a balanced diet can be challenging. People are increasingly ‘time poor’, and often look for food to consume on the go or prepare quickly. Even those motivated to follow a healthy lifestyle can easily be confused by conflicting advice and health messages. Human rights Millions of people are negatively affected by human rights abuses, not least in areas of war and conflict. The refugee crisis, and the resulting surge in migrant labour, remains a major challenge, and a root cause of key issues such as child and forced labour in the agricultural sector. Sustainable agriculture Globally, changes in consumption patterns and dietary preferences for animal protein are significantly increasing demand for feed and fodder. Agriculture must therefore produce more food of better quality while using less water and other resources. Rural development Demand for food is growing, but farmers face many challenges in meeting that need, due to poor farming practices, ageing or diseased plants, women’s lack of empowerment, and low levels of nutrition and sanitation. These can be exacerbated by the increasing pressure on arable land from other crops. As a result, many farmers live on low incomes, making farming a less desirable career option for the next generation. Youth employability Youth unemployment is a serious issue across the world, affecting an estimated 71 million people in 2017, according to the International Labour Organization. Work and training opportunities help alleviate poverty and provide our sector with new talent. Water scarcity Water resources are unevenly distributed across the planet: 1.1 billion people lack access to water, and 2.7 billion find water scarce for at least one month a year (WWF). Access to clean drinking water and adequate sanitation remains a significant challenge in many countries. Population growth and urbanisation The world’s population is growing, driving up consumption and putting pressure on precious natural resources, including water. The general trend towards living in urban areas also threatens the pipeline of farmers needed to produce enough food for us all. Food waste and loss If food waste was a country, it would be the world’s third-largest carbon emitter (Food and Agriculture Organization). About a third of global food production is wasted or lost every year. This affects farmer income, as well as the cost and availability of food. Climate change Our industry relies on a sustainable supply of ingredients, but climate change is impacting the food and beverage sector. Shifting weather patterns are affecting when and where crops can be grown. Declining natural capital Globally, we consume 1.6 times what our planet naturally provides (Global Footprint Network). Natural habitats are shrinking because of this demand for raw materials, as well as climate change and the growing population. Forests, grasslands and wetlands continue to be converted into urban and agricultural use.

For individuals

and families

For our

communities

For the

planet

Global opportunities and challenges Our world is affected by a wide range of global megatrends. In turn, these have influenced the development of our CSV approach and our 2030 ambitions.

We have contributed to the Social Capital Protocol, actively developing methodological approaches

to measure social issues. During 2017, we published a white paper that sets out a methodology for

valuing our contribution to society through employment created along a value chain. We used living

wage as the benchmark for demonstrating value.

Valuing our contribution to society

Our material issues Rural development and poverty alleviation Responsible sourcing and traceability Food and nutrition security Animal welfare Human rights Our priorities and actions

We work with farmers and

partners around the world to

build responsible and resilient

supply chains.

They supply us with the

agricultural raw materials

we need to make our foods

and beverages, so it is in our

interest to support the

sustainable development

of their businesses, and the

rural areas where they work.

Our material issues Water stewardship Water, sanitation and hygiene Climate change Natural resource stewardship Resource efficiency, (food) waste and circular economy Fair employment and youth employability Women’s empowerment Employee safety, health and wellness Business ethics Our priorities and actions

Our operations continually

strive to use less energy.

Fewer resources generate

less waste and create

fewer emissions.

We also strive to offer fair

employment and work with

integrity, openness and

respect for people.

Our material issues Over- and under-nutrition Food and product safety Responsible marketing and influence Our priorities and actions

We are committed to helping

consumers eat well, follow

active lifestyles and consume

our products sustainably.

Stage 1

Agricultural supply chain

Stage 2

Manufacturing

Stage 3

Retail and consumers

Our value chain These global trends cut across our sphere of influence and span our entire value chain. See how these issues have informed our priorities and actions below. Read more about our material issues

Driven by our company purpose, we have defined three main impact areas, which guide us towards achieving our 2020 commitments, and three 2030 ambitions that support the achievement of the SDGs. These recognise that we live in an interconnected world in which our futures are inextricably linked. Integrating the SDGs into our CSV approach has enabled us to identify those where we can create a positive impact – or at the very least, mitigate a negative impact. In 2016, we also mapped our material issues against the goals to see where our activities are best placed and most able to contribute, both directly and indirectly, towards their aims. View the mapping here Contributing to the global agenda We frame our Creating Shared Value (CSV) approach closely with the United Nations 2030 Agenda for Sustainable Development. Having helped to shape the 17 Sustainable Development Goals (SDGs), we – and many companies like us – are working hard to achieve them. In 2017, we focused on integrating the SDGs into key partnerships and global initiatives, such as Nestlé for Healthier Kids, Nestlé needs YOUth and our approach to water stewardship. We indicate where these, and other activities, support particular SDGs throughout this report, and summarise our overall contribution to the global agenda online. We remain committed to leveraging our scale to make progress towards the UN’s ambitious 2030 agenda, and our own 2030 ambitions. But we cannot do it alone. Achieving the SDGs will only be possible through effective and dynamic partnerships with a wide range of stakeholders. Published in September 2017, a report from United Nations Development Programme Philippines and the Philippine Business for the Environment details how the private sector contributes locally to the SDGs. Amongst other initiatives, the report features Nestlé’s Micronutrient Fortification efforts through popular products, our Healthy Kids programme that we have in partnership with the Department of Science and Technology – Food and Nutrition Research Institute (DOST-FNRI) and our responsible coffee farming activities in the Philippines. The report is the first of its kind in the Philippines and showcases the preliminary results of an online voluntary reporting process and in-depth research on how businesses are aligning their core business processes, activities and initiatives with the SDGs. Read a report and an article about the Philippines’ contribution to the SDGs Contributing to the SDGs: the example of the Philippines

Our main partnerships and collaborations EpiGen Global Research Consortium (EpiGen) In one of the largest public–private partnerships of its kind, we are looking at the impact of nutrition and lifestyle on maternal and infant health as part of the EpiGen Global Research Consortium (EpiGen). Through EpiGen’s NiPPeR study, we are exploring whether micronutrient supplements taken before conception and during pregnancy improve the health of mothers and their babies. Read more about our collaboration with EpiGen Responsible Sourcing partners As part of our Responsible Sourcing programme, we work with implementation partners in the countries where we source our ingredients. By bringing their technical expertise in agricultural supply chains, these partners help us to ensure that the work we do on the ground has the greatest positive impact on our sourcing communities and their local environments. We work we partners including TFT, ProForest, Verité and the Fair Labor Association (FLA) across all 12 global priority commodities. You can read more about our partnerships with these organisations and work that we are doing together in the Responsible Sourcing section. International Federation of Red Cross and Red Crescent Societies (IFRC) We have worked with the IFRC in Africa for 15 years, in support of its Global Water and Sanitation Initiative to improve access to safe water and sanitation to 30 million people by 2030. Our efforts focus on assisting the rural communities in the cocoa-growing regions of Côte d’Ivoire and Ghana and, more recently, the communities around our bottled water factories in Ethiopia, helping them gain greater access to clean water and sanitation. Our 10 years of collaboration in Côte d’Ivoire has been summarised in a recent report. Read more about our work with the IFRC Learn more about our partnerships Collaborating for a positive impact As a global company, Nestlé faces a wide range of complex challenges, from obesity to child labour to climate change. We cannot tackle these alone but, through collective action and partnerships, we are better placed to contribute more effectively and maximise what can be achieved. Working with the United Nations Global Compact The United Nations Global Compact (UNGC) is a strategic policy initiative for businesses committed to aligning their operations and strategies with 10 universally accepted principles covering human rights, labour, environment and anti-corruption. Our Corporate Business Principles incorporate the 10 UNGC Principles, and we reflect the concepts of fairness, honesty and respect for people and the environment in our actions. As a member of the UNGC’s leadership platform, LEAD, Nestlé continues to further its work towards advancing the integration of sustainability principles into our core business operations. Through LEAD, we are also able to deepen our efforts and commitments to answer to the call to action made by the SDGs. In 2017, we participated in several UNGC Action Platforms, advancing responsible business activities that support the UN SDGs:

• We contributed to the Blueprint for Business Leadership Platform, inspiring businesses to apply five leadership qualities to create positive impact at scale;
• In helping develop a comprehensive inventory of indicators for each SDG for the Business Reporting Platform, we have taken a major step towards a single framework with a common set of indicators; and
• Through the Breakthrough Innovation Challenge, we developed bagzielicious, a prototype app that allows consumers to manage their groceries, prepare healthy meals and decrease food waste. This was unveiled at the UNGC Leaders Summit in September 2017. Read more about our engagement with the UNGC The award was presented at the ‘Business Sustainability Moot and Annual General Meeting of Global Compact Network Pakistan’, organised in collaboration with the Employers’ Federation of Pakistan on 28 February 2018 in Karachi. This is the second time in a row; in 2016, Nestlé Pakistan was awarded the first prize as well in the category ‘Living the Global Compact Business Excellence 2014–15’. Winning this prestigious award twice in a row signifies Nestlé Pakistan’s continuous commitment towards its purpose of enhancing quality of life and contributing to a healthier future, in complete alignment with the SDGs. Nestlé Pakistan won First Prize for ‘Living the UN Global Compact (UNGC) Business Sustainability Award 2017’, in the Multinational Category.

Our 2020 commitments and progress Our commitments hold us publicly accountable for our performance, and we report on them every year. The table below shows both our current progress against them, and where we still strive to do more. All commitments are directly aligned with our business and our 2030 ambitions, and many directly support the UN’s Sustainable Development Goals (SDGs). Achieved In progress 2020 Commitment Status More information Offering tastier and healthier choices Launch more foods and beverages that are nutritious, especially for mothers-to-be, new mothers and infants and children Page 21 Further decrease sugars, sodium and saturated fat Page 23 Increase vegetables, fibre-rich grains, pulses, nuts and seeds in our foods and beverages Page 25 Simplify our ingredients list and remove artificial colours Page 26 Address under-nutrition through micronutrient fortification Page 27 Inspiring people to lead healthier lives Apply and explain nutrition information on packs, at point of sale and online Page 30 Offer guidance on portions for our products Page 31 Leverage our marketing efforts to promote healthy cooking, eating and lifestyles Page 3 3 Empower parents, caregivers and teachers to foster healthy behaviours in children Page 34 Market to children only choices that help them achieve a nutritious diet (^) Achieved Page 3 5 Support breastfeeding and protect it by continuing to implement an industry-leading policy to market breast-milk substitutes responsibly Page 36 Inspire people to choose water to lead healthier lives Page 38 Partner for promoting healthy food environments Page 39 Building, sharing and applying nutrition knowledge Build and share nutrition knowledge from the first 1000 days through to healthy ageing Page 41 Build biomedical science leading to health-promoting products, personalised nutrition and digital solutions Page 43

For individuals

and families

Key You can find each commitment explained in detail on the page indicated above. A full overview of our key performance indicators (KPIs) is provided at the end of this report.

2020 Commitment Status More information Rural development and enhancing livelihoods Roll-out of rural development baseline assessments to understand the needs of farmers Achieved Page 52 Improve farm economics among the farmers who supply us Page 53 Improve food availability and dietary diversity among the farmers who supply us Page 54 Implement responsible sourcing in our supply chain and promote animal welfare Page 55 Continuously improve our green coffee supply chain Page 56 Roll out the Nestlé Cocoa Plan with cocoa farmers Page 57 Respecting and promoting human rights across our business activities Assess and address human rights impacts across our business activities Page 60 Improve workers’ livelihoods and protect children in our agricultural supply chain Page 61 Enhance a culture of integrity across the organisation Page 62 Promoting decent employment and diversity Roll out our Nestlé needs YOUth initiative across our operations Page 64 Provide training on Corporate Business Principles, nutrition and environmental sustainability Achieved Page 65 Enhance gender balance in our workforce and empower women across the entire value chain Page 6 6 Advocate for healthy workplaces and healthier employees Page 6 8 Provide effective grievance mechanisms to employees and stakeholders Page 73

For our

communities

Key (^) Achieved In progress You can find each commitment explained in detail on the page indicated above. A full overview of our key performance indicators (KPIs) is provided at the end of this report.

2020 Commitment Status More information Caring for water Work to achieve water efficiency and sustainability across our operations Page 80 Advocate for effective water policies and stewardship Page 81 Treat the water we discharge effectively (^) Achieved Page 83 Engage with suppliers, especially those in agriculture Page 84 Raise awareness on water conservation and improve access to water and sanitation across our value chain Page 85 Acting on climate change Provide climate change leadership Page 88 Promote transparency and proactive, long-term engagement in climate policy Page 90 Safeguarding the environment Assess and optimise the environmental impact of our products Achieved Page 92 Improve the environmental performance of our packaging Page 93 Reduce food loss and waste Page 95 Provide meaningful and accurate environmental information and dialogue Page 96 Preserve natural capital, including forests Page 97

For the

planet

You can find each commitment explained in detail on the page indicated above. A full overview of our key performance indicators (KPIs) is provided at the end of this report.

14 Key Achieved In progress

For individuals and families

Inspired by our founder, Henri Nestlé, and with nutrition at our

core, we work closely with partners to offer foods, beverages

and services that enable healthier and happier lives. We have

set clear commitments and meaningful objectives to make our

portfolio even tastier and more nutritious, inspire consumers

to live well, and develop and share our understanding of the

connection between nutrition and health.

Our 2030 ambition is to help 50 million children lead

healthier lives.

Investor benefits The market for healthier foods and beverages is growing. Products with a nutrition, health and wellness (NHW) dimension perform better financially and resonate deeply with consumers. Our portfolio means we are well placed to seize this growing and evolving opportunity. Nestlé foods and beverages with an above-average NHW dimension demonstrate growth rates 1.8 times higher than those that are below average and are 1.5 times more profitable. Supporting the Sustainable Development Goals Read more about how we are helping individuals and families Building, sharing and applying nutrition knowledge because through our nutrition knowledge and research findings, we can make a positive contribution to society and help address some of today’s key public health and nutrition challenges. 2017 highlights Published 313 peer-reviewed scientific papers Launched the first infant formula with two human milk oligosaccharides (HMOs), which support infants’ immune systems and promote healthy gut flora 1.724 billion Swiss francs invested in research and development Nestlé Health Science launched our Boost nutritional drink range in China, Japan, the Philippines and Mexico to support healthy ageing Inspiring people to lead healthier lives because we are nurturing a healthy generation by giving individuals and families the best start in life and supporting them through all stages of life. 2017 highlights 14.4 million children meaningfully reached across the world through our Nestlé for Healthier Kids programme 89.4% of our foods and beverages display Guideline Daily Amount (GDA) labels on the front of pack in countries where labelling regulations allow CHF 40.1 billion sales of products providing Portion Guidance 81 countries participating in Nestlé for Healthier Kids Offering tastier and healthier choices because we want to encourage healthy diets and reduce malnutrition in all its forms, from under- to over-nutrition. 2017 highlights 174 billion servings of fortified foods and beverages in 66 countries with higher vulnerability to micronutrient malnutrition* 1041 new nutritious products launched, that address daily needs and gaps as per children intake studies 8438 products per year*^ renovated for nutrition or health considerations Over half of our products currently follow the WHO’s 5% conditional recommendation for sugar intake

• (^) 2012–2016 average. From page 20 From page 29 From page 40

Nestlé for Healthier Kids

Today, more than 40 million children

under five years of age are considered

overweight or obese, and almost

155 million are stunted due to under-

nutrition*. This calls for action.

At Nestlé, we believe that by helping

new generations eat and drink better

and exercise more, we will enhance

quality of life and contribute to a

healthier future.

In 2017, we brought together our United for Healthier Kids and Nestlé Healthy Kids Global Programme under one name: Nestlé for Healthier Kids. This initiative brings together all our efforts to support parents and caregivers on their journey to raise healthy children. From leading research and product formulation to education, innovative nutrition and services, our ambition is to help 50 million children lead healthier lives by 2030. In 2017, our initiative reached 14.4 million children. We are helping parents raise healthier children in three ways:

• Understanding children’s nutritional gaps – All Nestlé for Healthier Kids activities are supported by scientific evidence. On pages 41–42, you can read about our Feeding Infants and Toddlers Study (FITS) and our Kids Nutrition and Health Study (KNHS), which uncover insights about the eating patterns and nutritional intake of infants and toddlers from birth to age four, and children aged 4–12 respectively.
• Offering tastier and healthier choices to families – Every year, we sell over 360 billion servings of foods and beverages in 150 countries around the world. To ensure our brands support a healthier journey, we have made forward-looking commitments to reduce sodium, sugars and saturated fats, and add healthy ingredients like fibre-rich grains, vegetables and micronutrients to our foods and beverages. We increasingly use recognisable ingredients through our ‘Kitchen Cupboard’ approach to recipe development, accelerating the removal of artificial additives, flavours and colours that parents are seeking to avoid in children’s diets. Read more from page 20.
• Inspiring families to raise healthier kids – Adopting strong nutrition and hydration habits from an early age is essential to becoming a healthy adult. From page 29, you can read about how we aim to foster healthier behaviours from the start of life to adolescence, by supporting parents, teachers and caregivers with nutrition education programmes. We also leverage our brand efforts to inspire parents to raise healthier kids by promoting healthy cooking and hydration, balanced breakfasts, guidance on portions and sport. For example, Maggi’s ‘Simply Good’ initiative helps millions of families cook tasty and balanced everyday meals, with the fresh ingredients they love. These brand-specific activities positively contribute towards our ambition to help 50 million children lead healthier lives. Milo encourages children to exercise Milo has been inspiring kids around the world to get active for over 50 years. Through coaching and grassroots sports events, over 22 million children benefit from Milo’s programmes each year. Our new partnership with FC Barcelona takes this to a new level, inspiring millions more to practise sport. Made with simple ingredients such as milk, malt barley, sugar and cocoa, our Milo range delivers the nutritious energy that children need to be active. Our commitment is to gradually decrease the added sugars and deliver at least 12 billion fortified cups of Milo by 2020. * (^) UNICEF, WHO and the World Bank Group

Food for life

Our foods and beverages

are for those everyday

moments, for life.

The kitchen is the heart of family

life, and we are proud that Nestlé

foods can be found in so many

kitchens around the globe.

Whether it is busy parents making

lunches for their school-aged

children or elderly couples

enjoying a leisurely prepared

meal, throughout life, Nestlé can

be found at the heart of these

everyday, but precious, moments.

Parents want only the best for their little ones. From the first time a mother breastfeeds her newborn to a baby’s first taste of solid food, feeding time creates an incredible bond of love. As our children grow, mealtimes become more than just nourishment. They are valuable opportunities to connect, share experiences and bring families together. Creating memorable mealtime experiences is an ambition we all want to achieve. Nurturing and nourishing We understand the emotional as well as physical power of food, and that nurturing and nourishing go hand in hand. For newborn babies, we actively support exclusive breastfeeding until six months of age, and introducing nutritious solids along with continued breastfeeding up to two years and beyond. For mothers who are not able or choose not to breastfeed, we offer our high-quality range of infant formulas. To help parents feed their growing children well, we are increasing the amount of vegetables in our offerings, and our ‘Whole Grain Tick’ helps parents easily identify Nestlé cereals containing at least 8 g of whole grain per serving. We are also passionate about helping people age well and continue to develop nutritional supplements like Boost, made specifically for the health needs of ageing adults, with proven, benefit-driven ingredients and nutrients. On the other hand, our Purina colleagues are all about another family’s favourites: pets. They were the first to create a high protein/ low carbohydrate therapeutic diet for the nutritional management of cats with diabetes. And the first dry dog food brand to use real meat as the #1 ingredient. With you for life Whether it is our range of aromatic coffees, healthy and convenient meals, or even an occasional indulgent treat, we want to help you make consistently good food choices to assist you and your family on the journey to good health. Our foods and beverages are there for you, for life. Read more about our commitments for individuals and families from page 20 onwards

Applying science

for better health

Every day, our scientists come to

work determined to uncover

more about our bodies and our

health, to make Nestlé’s foods,

beverages and nutritional

solutions even better.

More and more people understand the link between what they eat and their health and well-being. We know that people want products they can feel good about and trust, and for decades we have been responding, guided by our Nutrition, Health and Wellness (NHW) strategy. Today, we use the power of science in three exciting ways: to fulfil people’s desire to reconnect with nature; to deliver better nutrition in an even tastier way; and to find breakthrough solutions that help improve health. Helping you reconnect with nature When we select our recipes and prepare our dishes, we work to press nature’s ‘pause button’ on ingredients when they are at their peak of perfection. We use science to lock in taste and nutrition, responding to consumer demand by helping people reconnect with nature in a safe, tasty and meaningful way. We maximise our extensive research and development network to bring back what we call the ‘clean label’. This includes using more familiar ingredients like whole grains and vegetables, and finding alternatives to high intensity sweeteners, emulsifiers and additives. As more people learn about the health and social benefits of a plant-based diet, many individuals are looking for vegetarian or vegan alternatives. We have 52 scientists worldwide who are dedicated to exploring plant-based protein sources such as soya, pulses, rice, oats and potato. As a result, we are developing new offerings such as soya nuggets, and all-natural almond and coconut milk creamers. continued

Better nutrition for you and your family We are developing breakthrough solutions to make our foods and beverages even healthier and tastier, increasing their nutritional value and using less sodium, saturated fat and sugar. Our scientists are even finding ways to do this with some of our favourite confectionery. For example, by increasing the milk content of our Milky Bar range from 26% to 37.5% we will take out almost 350 tonnes of sugar and 130 million calories from UK public consumption. By complementing new science with the expertise of our in-house chefs, we stay at the cutting edge of culinary nutrition. Our scientists have now gone one step further and made a ground-breaking discovery related to sugar structure, which will help us reduce sugar content in even more of our foods and beverages. Nutritional solutions for health challenges Through our fortified foods and beverages, as well as consumer healthcare, we are helping people take control of their health at a time when healthcare costs are increasing around the world. For example, disease-specific medical nutrition means we can support ageing people with diabetes management or other specific needs. Our unique study with the EpiGen Global Research Consortium (EpiGen) is leading research linking the mother’s nutrition and health influence to the future health of her baby. It has shown that maternal obesity and/or high glucose levels in pregnancy increase the risk of health problems in babies later in life. By following women even before conception until the child is two years of age, this study will provide new knowledge on the impact of pre-conception nutrition. This cutting-edge research will help us improve our nutritional supplements to help mothers-to-be improve their health and that of their children. Positively impacting lives Our scale means we have a unique opportunity to deliver beyond our financial targets, and deliver social value as well. We know that the work we do in this area can have a big impact on people’s health and well-being. This is at the heart of our purpose: Enhancing quality of life and contributing to a healthier future. Read more about our commitments for individuals and families from page 20 onwards

Using the power of science, we are

unlocking nature’s secrets to make

our foods and beverages healthier.

Across the world, millions of people lack

access to the right nutrition, and millions

more over-consume calories and nutrients

of concern. Tackling public health

challenges on such a vast scale requires

governments, public health authorities,

industry and civil society to work together.

We use our R&D network, our nutrition

expertise and our brands to encourage

healthy diets and address malnutrition in

all its forms.

Why offering tastier and healthier choices matters Around 793 million people worldwide lack access to adequate foods (Food and Agriculture Organization), and about one-third of the global population suffer from deficiencies in essential vitamins and minerals (WHO). Our studies indicate that children around the world are not consuming enough fibre-rich plant foods such as whole grains or vegetables, and a large proportion have insufficient calcium and vitamin D in their diets. We know that the elderly or people living with a severe intolerance, like coeliac disease, are also susceptible to insufficient nutrition. While under-nutrition is a serious challenge, millions more people over-consume foods and beverages that are high in nutrients of concern, such as sugar and fat. In 2014, over 1.9 billion adults were overweight, and 600 million of these were obese (WHO). Around 41 million children under five are considered overweight or obese (WHO). Our contribution to providing tastier and healthier choices Our consumer-focused efforts support Sustainable Development Goal (SDG) 2, to end hunger and achieve food security for all, and SDG 3, to reduce the prevalence of non-communicable diseases. We work with partners to support these goals, help address all forms of malnutrition and encourage healthy diets. In 2017, at a high-level meeting organised by the EU Presidency, Nestlé UK’s CEO openly advocated for both voluntary initiatives and regulation to help in the fight against childhood obesity. At times, it might seem as if we are not moving fast enough, but we want to get this process right. Good nutrition should always taste good, or consumers will simply buy less-healthy alternatives. Read more about how we are offering tastier and healthier choices Continuously raising the bar in progress monitoring Based on learnings of over 10 years, Nestlé is further automating its progress monitoring. Datasets for some 2017 KPIs evolved with new IT systems and stronger ambitions. Footnotes indicate where there are such adjustments. Our work on offering tastier and healthier choices contributes to the following SDGs: Offering tastier and healthier choices

Tailoring our products to meet daily nutritional needs Ever since our company’s beginnings, with Henri Nestlé’s special formula for infants who could not be breastfed, we have been keen to bring tasty, convenient solutions to parents looking to feed their children a nutritious diet. Our dietary intake and eating pattern studies of babies and children up to age 12 are now further helping our nutritionists and product developers address nutritional gaps in specific populations of children. To ensure that children get sustained benefits from the best nutrition, we have extended our ambition to improve the nutrition of mothers-to-be and new mothers. Starting in 2017, we adopted ambitious nutritional targets for our new food and beverage projects, addressing the nutritional needs and documented gaps of these more vulnerable consumer segments. In these new products, the proportion of food ingredients (vegetables, whole grains, lean protein foods, milk, etc.) and essential vitamins and minerals recommended for daily consumption by authorities must deliver a meaningful contribution, within age- appropriate portions, and be easy to recognise on the label. New product launches in 2017 included dairy beverages, many of which are fortified with vitamins and minerals missing in children’s diets (Nido, La Lechera, Ideal, Dancow and Milkpak); vegetable soups and pasta sauces (Maggi and Winiary); noodles with oat fibre and iron (Maggi); fortified flavoured milks and cocoa-malt drinks (Nesquik, Milo and Vascolet); fruit and vegetable purées (Gerber, Bona and 2nd Foods); meals with vegetables and lean meat or fish (Nestlé and Gerber); and fortified cereal porridges (Cerelac). Launching more nutritious foods and beverages Making our portfolio healthier and tastier Nestlé is providing access to tastier, healthier, convenient, premium and affordable foods and beverages. Our research documents the formulation of new and better tailored food and beverage solutions. The Nestlé Nutritional Profiling System helps us to continually improve our existing recipes, making it easier for people to adopt a healthy diet. We particularly focus on popular, affordable foods and beverages. Our commitment:

Launch more foods and beverages

that are nutritious, especially for

mothers-to-be, new mothers

and infants and children.

Year on year, we will increase the speed and number of launches of such nutritious food and beverage solutions, consistently turning the results of our research into meaningful support for parents. Achieving Nestlé Nutritional Foundation status with a preferred taste We assess the nutritional contribution of our portfolio through our Nestlé Nutritional Profiling System (NNPS). This approach, based on nutrition science and public health recommendations, allows for a thorough evaluation of the nutritional value of our foods and beverages. Our NNPS helps us determine how our foods and beverages fit into a child’s or adult’s daily dietary intake. We consider sensitive nutrients such as added sugars, saturated fats, trans fats, salt and energy content. Very importantly, we also look at nutritional contributions like calcium, protein, fibre, whole grains and more. Every food or beverage product that achieves the specific criteria of NNPS attains the Nestlé Nutritional Foundation (NF) status. Accordingly, it represents an appropriate choice when the consumer decides to have it in the context of a balanced diet. All newly launched foods and beverages for children must meet NF status. 82.1% of our foods and beverages achieved NF status (% of total sales)^1. For products consumed by children, it is 92.5%^2. While our NNPS guides our foods and beverages to make a positive nutritional contribution, they must then pass our consumer tasting programme. This test ensures that at least 60% of consumers prefer the taste of our recipes. If we achieve our goal of best taste and best nutrition compared with the competitor, everyone wins. 8 438 products per year^3 renovated for nutrition or health considerations By 2020: In both developed and developing countries, design and launch foods and beverages that address the daily nutritional needs and key nutritional gaps of infants, children up to age 12, new mothers and mothers-to-be. In progress Our results: 1041 new products were launched in 2017 addressing specific nutritional needs and gaps of babies, children, expecting women or new mothers. Progress against our objectives 1 Enlarged scope with stronger ambition. 2 Due to ongoing automation, a few product categories are not yet reflected here. 3 2012–2016 average.

Making nutrition affordable and accessible We want to ensure that the most vulnerable in society – around 3 billion lower-income consumers worldwide – can also access tastier and healthier choices. Therefore, we have developed a specific business model called Popularly Positioned Products (PPPs). PPPs are high-quality foods and beverages, which are affordably priced and take local nutritional needs into consideration. They are often sold in smaller formats and are made easily accessible to consumers wherever they may live. We sell PPP versions of several leading brands, including Bear Brand, Milo, Nescafé and Maggi. And we apply the same vigorous quality and safety standards on our PPPs as on any other products. Food safety and quality are non-negotiable for Nestlé.

We take a holistic approach, and will not reduce sugar, sodium or fat if it means having to increase another nutrient of concern. We focus on foods and beverages that contribute most to people’s intake of these nutrients to ensure the most meaningful impact. Reducing sugar, sodium and fats Science-based renovation and innovation Public health evidence shows that diets with lower sugar, sodium, saturated fat and trans fats can improve health outcomes and decrease non-communicable diseases (NCDs). We have made great progress in reducing the levels of these public health-sensitive nutrients in our foods and beverages over the past 10 years. Our commitment:

Further decrease sugars, sodium

and saturated fat.

Reducing sugar We started our journey reducing sugars back in 2000, and by 2010 had achieved a 34% reduction. In 2014, we committed to reduce sugars by 10% by the end of 2016 in all products where energy from sugars contributes more than 10% in the daily diet. This was aligned with the World Health Organization’s (WHO) guideline recommending people keep free sugars below 10% of total energy intake. By that time, only 7% of our foods and beverages were in scope of this commitment because the other products already met the 10%; however, these products were the most challenging. As communicated in our 2016 report, we achieved an 8% reduction in total sugars. From a public health perspective, what really matters is that consumers choose diets that are nutrient-rich and low in sugars. The WHO suggests it could be beneficial if less than 5% of energy comes from free sugars in the daily diet (a conditional recommendation). We welcome ongoing scientific research on the health benefits of this recommendation, are firmly committed to progressive public health efforts and have leveraged the WHO’s 5% conditional recommendation to determine which products are in scope of our 2017–2020 sugar commitments. We are pleased that over half of our foods and beverages currently provide less than 5% energy from free sugars. We will now reduce sugars by 5% in the remaining roughly 45%. This is an ambitious task considering consumer demand for more natural and tastier products. By 2020: Reduce the sugars we add in our foods and beverages by 5% to support individuals and families in meeting global recommendations. In progress By 2020: Reduce the sodium we add in our products by 10% to support individuals and families in meeting global recommendations. In progress By 2020: Complete the 10% commitment taken in 2014, to reduce saturated fats by 10% in all relevant products that do not meet the NF criteria with respect to saturated fats. In progress Our results: We started reducing sugar in 2000. In 2016, we announced our new, ambitious 2020 commitment for sugar, sodium and fats, and in 2017 released implementation guidelines to help our markets achieve this. Standardised reporting systems will capture these additional reduction efforts, and measurement is in progress for all three of our objectives. We will report sugar, sodium and fat reduction, both as a percentage and tonnage, at a local and global level from 2018 onwards. Progress against our objectives 2000–2010 34% reduction in sugars based on total volume of sugar purchased and overall sales volume. 2007 Mandatory policy Focus on products that make a significant contribution to consumers’ total dietary sugar intake, as well as products intended primarily for children, such as breakfast cereals. 2014–2016 Forward commitments Further reduction by 10% in all products which are not aligned with the WHO recommended sugars intake guideline. 2017–2020 Forward commitments Further reduction by 5% in all products which are not aligned with the WHO conditional recommendation sugars intake guideline. Sugars reduction started in 2000 2000 2005 2010 2015 2020 2025

We are developing new technologies to enable both sugar reduction and sensory satisfaction. It has been gratifying to see that our new Milo in Chile, with 32% less sugar as reported in our 2016 CSV report, has become a successful innovation in the market, highlighting consumers’ trust and preference with our products. To help consumers choose lower-sugar foods and beverages, we also advocate for voluntary sugar reductions and a level playing field across the industry. We hope other competitors will take similar action to proactively reduce added sugar for the benefit of consumers and public health. Ground-breaking lower-sugar discovery In 2016, we made a ground-breaking discovery on sugar structure. Inspired by the structure of cotton candy/candy floss, we discovered a way to change the structure of sugar in a bar of milk chocolate so that it dissolves more quickly on the tongue. As it melts in the mouth, it delivers a sweet taste faster than normal sugar, allowing us to use less sugar while providing an almost identical sweetness. We expect this innovation to help us reduce sugar by up to 40%. We scaled up our technology in 2017, and plan to launch the first products using this technology in mid-2018. Reducing sugar in KitKat In 2017, we continued our sugar reduction journey in KitKat – our number one confectionery brand – and have achieved a reduction of around 7% through an improved recipe. Including the work made on portion control, this is equivalent to a removal of 1500 tonnes of sugars, while maintaining taste preference. We achieved this without using sweeteners or other artificial ingredients. The new and improved recipe contains more of the two main ingredients of milk chocolate: milk and cocoa. By the end of our global roll-out in 2018, the potential impact will be the removal of around 2100 tonnes of sugar from individuals’ diets. And we will reduce sugar even further in the coming years using natural ingredients. Reducing sodium We have been reducing sodium in our foods and beverages for over a decade. We began with a worldwide commitment in 2005, followed by a further commitment in 2012 to lower sodium by 10% in all foods and beverages not aligned with our targets based on a maximum daily intake of 2400 mg (6 g of salt). While this sodium threshold of 2400 mg was our interim target, since 2013, we have been working towards the WHO’s recommended intake levels of no more than 2000 mg of sodium (equivalent to 5 g of salt) per person per day, by 2025. In 2017, we issued a new policy to further reduce sodium by an average of at least 10% by the end of 2020, in all our products not yet aligned with our sodium targets, based on the WHO recommendation of a maximum sodium daily intake of 2000 mg. This means a targeted salt reduction of more than 15 000 tonnes. We will achieve this through innovation, reformulation using ingredients such as herbs and spices, and building on our chefs’ expertise to create delicious foods with lower salt. Extensive work is also ongoing to report progress transparently, and focus on products with the highest consumer reach and impact. In 2017, public announcements to go further than the 10% reduction have already been made by some Nestlé markets. Reducing sodium in Senegalese Maggi bouillons Senegal was the first market in Central and West Africa to introduce a new norm limiting the sodium content in bouillons. This resonates with our iconic Maggi brand’s mission to support home cooks with healthier and tastier choices. In response, our team successfully reformulated Maggi bouillons, resulting in a sodium reduction of 11% while maintaining taste. Mr Alioune Sarr, Trade Minister, recognised Nestlé Senegal’s leadership in salt reduction, as we were the first company to launch foods and beverages aligned with the new standard. Reducing saturated fats Fats and oils provide energy, help us absorb vitamins and contribute to many essential bodily functions. Through our Nestlé Policy on Trans Fat, since January 2017 over 99.8% of the fats and oils we use do not contain trans fats originated from partially hydrogenated oils. The WHO recommends that only 10% of calories in our diet should come from saturated fats and Nestlé’s NF criteria for saturated fats follows this same recommendation. In 2014, we committed to reduce saturated fats by 10% in all foods and beverages that did not meet the WHO’s recommendation by the end of 2016. We remain fully committed to closing the 3.5% shortfall reported at the end of last year. Achieving saturated fat reduction in Asian noodles is one essential step to closing this gap. Development work showed that the expected gains of using the previously proposed emerging oil could not be reached, and the project was economically not viable. Instead, we have identified an already commercially available and locally produced oil, which is nutritionally superior to our current oil. A sourcing study showed that the proposed oil can fully replace our current oil, and we have begun evaluating its commercial viability.

More whole grain and fibre in our breakfast cereals One of the ways we can have a big impact is through Cereal Partners Worldwide (CPW), our joint venture with General Mills. We have set whole grain requirements for our breakfast cereal brands – all those carrying the ‘Whole Grain Tick’ contain at least 8 g of whole grain per serving. They also display a green banner to make them easier for individuals and families to identify. In particular, we want to ensure that our cereals popular with children and teenagers contain more whole grain than any other ingredient, and we are committed to making all our cereals a source of fibre. For example, Uncle Toby’s – Australia’s leading brand of oats – has launched Nature’s Mix, a no-added-sugar range that is naturally sweetened with dried fruit and nuts. And in Brazil, we succeeded in making whole grains the central ingredient in Snow Flakes without compromising texture. Improving nutrition through fibre-rich grains and vegetables Helping families achieve balanced diets Vegetables, grains, pulses, nuts and seeds are a vital part of a balanced diet, as they are excellent sources of fibre, vitamins, minerals and other essential nutrients. However, recent research indicates that children and adults are not eating enough of these nutrient-dense food ingredients. We are currently establishing specific objectives for each relevant product category. We also help families increase their intake by providing relevant nutritional advice on-pack or online, and promoting healthy home cooking. Our commitment:

Increase vegetables, fibre-rich grains,

pulses, nuts and seeds in our foods

and beverages.

We have updated the wording of our 2020 objective, to make it more consistent with our other CPW commitments and to enable us to ensure efficient tracking. Making whole grain our main ingredient in all our recipes is part of our overall ambition at CPW. From a health perspective we are interested in increasing fibre from all sources, not just whole grain. This challenging target has strict criteria defining which nutrient-dense ingredients count towards it; we exclude ingredients that are mixed with other sub-components (e.g. vegetable juices mixed with starches), refined cereals with less than 6 g of fibre per 100 g (e.g. standard wheat flour, white rice) and cereals that undergo further processing. It is important that any product reformulation does not adversely affect consumer preference through changes to texture, taste or shelf life. And wherever possible, while incorporating more whole grain and fibre into our breakfast cereals, we also further reduce sugar and sodium. Increasing our use of vegetables We have also been working towards increasing vegetables in our recipes, especially in our prepared meals and sauces, but also in our dressings and condiments. For example, we have raised the vegetable content in our Lean Cuisine and Stouffer’s Fit Kitchen ranges. Getting children to eat vegetables can be particularly challenging, so we aim to help parents and caregivers. In the United States, for example, where vegetable consumption is below recommended levels, we add vegetables to our Lil’ Pastas whole grain pasta dough filling and sauces to achieve a significant quantity with delicious and subtle taste. The navy (haricot) beans in Lil’ Beanies make the snack interesting for young children not consuming enough vegetables, fibre and vitamin E. And we advocate eating and cooking with more vegetables and other fresh ingredients through our Maggi ‘Simply Good’ home cooking programme. In the UK, Nestlé has pledged to include more vegetables in on-pack and online meal recommendations for its Maggi range, as part of the Peas Please campaign. Peas Please is a ground-breaking initiative from the Food Foundation, a think tank focused on increasing vegetable consumption. It aims to bring together farmers, retailers, fast food and restaurant chains, caterers, processors and government departments with a common goal of making it easier for everyone to eat more vegetables. By 2020: Add to our products at least 750 million portions of vegetables, 300 million portions of nutrient-rich grains, pulses and bran, and more nuts and seeds. In progress Our results: Set the implementation guideline and calculated the baseline, based on 2016 data: 7.4 billion portions of vegetables, 5.7 billion portions of fibre-rich grains, approximately 11 000 tonnes of pulses and 17 000 tonnes of nuts and seeds were already added to our foods and beverages. By 2020: In addition to whole grain already being the main ingredient in our ready-to-eat breakfast cereals for children and teenagers, all our Nestlé-branded cereals^ will be at least a source of fibre, and have more whole grain than any other ingredient. In progress Our results: More whole grain than any other ingredient in any serving of children’s or teenagers’ breakfast cereals: 2017 95% 2016 93% 2015 85%*

• (^) Wherever technically feasible. ** (^) Reduction compared to 2014 due to the adoption in 2015 of a more stringent tracking methodology for whole grains. Progress against our objectives