All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

Animal Ag Alliance Stakeholders Summit – The Journey to Extraordinary!

“Fact, Fiction, the Future - Measuring Sustainability”

Brian JonesResponsible Sourcing ManagerNestlé North America Procurement

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

2

Fact…

1Animal Agriculture Alliance, http://www.animalagalliance.org/educate/#sustainability accessed 04/15/2015

“…puts animal agriculture under increased scrutiny…”…the increased interest in food production by consumers…“…producers have to put far more emphasis on the social side of sustainability…”

Sustainability impacts us all!

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

3

Fiction…

• Climate Change• Water• Consumer Engagement• Energy• Human Rights

Sustainability, http://www.mylanderpages.com/sustainability/ten-trends-2015 , accessed Apr 20, 2015

The need to focus on Sustainability can wait

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

4

Future…

• How will we get there?

1Animal Agriculture Alliance, http://www.animalagalliance.org/educate/#sustainability accessed 04/15/2015

Managing and measuring Sustainability is the only way to drive the change necessary

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

5

Nestlé Responsible Sourcing

"Remove the worst, Promote the Best, Improve the Rest“

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

6

Nestlé’s Responsible Sourcing Program Is Founded On Three Key Documents

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

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

FARMER CONNEC

T

Nestlé

Resp

on

sib

le

Sou

rcin

g Traceability Programvs. RSGBy 2015 40% Traceable, 30% Responsibly Sourced

FARM OR FEEDSTOCK

TIER 1 SUPPLIER

Audit Programvs. Nestlé Supplier Code

SUBTIER SUPPLIER

Palm Oil SoyaSugarPulp and Paper

HazelnutsVanillaFish and Seafood

Meat, Poultry and Eggs

Coffee Cocoa

Dairy Shea

Execution of Nestlé’s Responsible Sourcing Program Involves EVERYONE in the Upstream Value Chain

Audits verify compliance to the Nestlé Supplier Code at

Tier 1 level

Traceability verifies the implementation of the Responsible Sourcing Guideline by

subtier suppliers (back to farm level)

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

8

Measuring Level 1 Suppliers

Responsible Sourcing Audits (RSAs)• Done at the Nestlé Tier 1 Supplier level• Independent, third party auditors• Standard audit protocol (SMETA 4-Pillar)

– Labor– Health & Safety– Environment– Ethics

SMETA – SEDEX Members Ethical Trade AuditSEDEX – Suppliers Ethical Data EXchange

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

9

Measuring our Supplier’s Sources of Supply

Responsible Sourcing Traceability (RSTs)• Supplier “source of supply” Assessments

– All of the areas included in RSAs– Category specific concerns (RSGs)

• Deforestation (Pulp & paper, Palm oil, Soya )• Human Rights (Cocoa & Coffee, Sugar, Vanilla,

Hazelnuts)• Animal Welfare (Meat, Poultry, & Eggs, Dairy)

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

10

Nestlé Commitment on Farm Animal Welfare

• Announced to the public August 21, 2014

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

11

Measuring Animal Welfare

We will support and implement actions to promote animal health and welfare, and eliminate practices which contravene the “Five Freedoms,” and tackle the root causes of those practices. In particular, we will initially focus upon:

• For cattle: dehorning; tail docking; disbudding and castration without anesthetic and analgesia; veal crates; permanent tethering

• For pigs: gestation crates; tail docking; surgical castration

• For poultry and eggs: cage systems, particularly barren battery cages; fast-growing practices

• For animal production systems in general: our first focus is the responsible use of antibiotics, in line with OIE’s guidance, and the phasing out of the use of growth promoters

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

12

Global Animal Welfare Approach

2015• Conduct Farm assessments to determine the prevalence of

undesired animal welfare practices in the Nestlé supply chain– 400 Dairy farm assessments global target– 600 M/P/E farm assessment global target

2016• Begin remediation to close the gaps between any undesirable

farm practices found in the 2015 assessments vs. the desired animal welfare practices Nestlé has committed to

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

13

Animal Welfare Farm Assessments

• The assessments in the meat-poultry-egg and dairy categories are done by the SGS audit company with support from the Nestlé NGO partner World Animal Protection.

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739

14

In Summary…

• Nestlé has recognized the need to sharpen it’s focus on sustainability

• Nestlé has communicated their sustainability position and principals

• Nestlé is committed to measuring and reporting our progress

• Nestlé is committed to Sustainability!!

All trademarks are owned by Société des Produits Nestlé S.A., Vevey, Switzerland. 34739