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Nesquik Sustainability Actions

No deforestation

Forests are vital to life. They cover 30% of the earth’s land surface and play a vital role in ecosystems, as carbon sinks and as a source of biodiversity. Forests are also critical for billions of people, including many vulnerable farmers, who rely upon them for their livelihoods. According to the United Nations Food and Agriculture Organization (FAO), an estimated 7.3 million hectares of forest are lost each year. When forests are cleared, species are driven to extinction, climate change effects worsen, and people’s livelihoods are destroyed – along with the natural ecosystems that we all rely on for the food we eat. We must address deforestation, urgently. Continued progress In 2010, Nestlé committed to ending deforestation in our supply chain by 2020 (pdf, 205Kb). Since 2010, we’ve worked across our supply chains to make no deforestation a reality. We included a No Deforestation, No Peat, No Exploitation (NDPE) requirement into our Responsible Sourcing Standard (pdf, 2Mb), and mapped our supply chains to identify product origins and assess their deforestation risk. While we have made progress, we still face challenges, many of which we will not be able to solve by ourselves. This is why, last month, we joined the High Carbon Stock Approach (HCSA) Steering Group. As of February 2018, our supply chain is 63% verified deforestation free (pdf, 90Kb) for our top five commodities linked to deforestation risks. We continue to make progress by conducting assessments, sponsoring conservation initiatives, and engaging smallholders. For example, in September we announced that, by the end of the year, we will monitor 100% of our palm oil supply chain using satellite technology. We’ll extend coverage to pulp and paper in 2019 and soya at a later stage. Our ambition is to work throughout our supply chains to transform practices to address deforestation. However, when companies do not comply with our Responsible Sourcing Standard and show no willingness to improve, we will take decisive action to remove them from our supply chain. Challenges remain At each stage of our journey towards no deforestation in our own supply chains, we have encountered new challenges. As we get closer to our 2020 target date, we face some real dilemmas. One of the first challenges we came across in 2010 was a lack of common understanding on how to define forests and deforestation. This is where the High Carbon Stock Approach (HCSA) comes in. Building on a methodology developed by Greenpeace, The Forest Trust (TFT) and Golden Agri Resources, it distinguishes forest areas to protect, from lands with low carbon and biodiversity value that may be developed sustainably. The approach allows for economic development, but also protects local community rights, community land use and livelihoods through the integration of Free Prior and Informed Consent (FPIC) procedures. Nestlé was one of the first companies to include a no conversion of High Carbon Stock lands requirement within our Responsible Sourcing Standard. This has been a critical tool to help us implement our No Deforestation commitment. Other challenges remain. One is how much we should focus upon our own commitment to no deforestation in our value chains, versus broader efforts to eliminate deforestation globally. Another is recognizing that achieving no deforestation is not just about preventing forest clearances, but also social issues – from human rights to the economic development of palm oil-producing communities, 40% of which comprise smallholder farmers. Cutting out smallholders and vulnerable communities to address deforestation more simply and quickly in our direct supply chains would not only harm tens of thousands of livelihoods, it would also increase pressure on forests. By engaging in programs like Rurality we are working to empower smallholder farmers in our supply chains, supporting them them to be more resilient and to produce responsibly. Global consensus is vital Given a lack of global consensus on how we should best respond to these challenges, we see the need for a new way of thinking, and a new platform to build consensus among civil society, producers, end users, and others. This is why we joined the HCSA Steering Group, which is tackling these tough issues head-on. Our ambition is to help make the HCS Approach the norm in forest conservation. We’ll do so by bringing in our experience of working with smallholder farmers in diverse and complex supply chains, and by applying the tools and technologies we all need – to help make deforestation history.

Grown respectfully

Several years ago, Eduardo Camarena thought he had lost everything. He no longer had a job, was going through a divorce, and had to move away from his children. He got so low that "even the sun couldn’t warm me". Shortly afterwards, his grandfather passed away. But Eduardo had one thing left to cling on to. A promise made to his grandfather that he would look after the family’s coffee plantation and make it successful. Today, Eduardo runs a thriving coffee farm, is helping raise his children, and is a source of help and advice to other farmers in the region. How did he turn things around? Respect for our farmers By joining the Nescafé Plan, which over the last decade has helped give farmers like Eduardo across the world the support they need to grow more and better coffee, and to do so sustainably, with benefits for the communities where they live. On International Coffee Day 2018, Nescafé has launched Grown Respectfully to express how it works respectfully to deliver great-tasting coffee, by supporting coffee farmers, their communities and the planet through the Plan. "It was the best decision I could have made in my life," Eduardo says of his decision to join the Nescafé Plan. But before he did so, there was no telling if his coffee plantation would survive. The plants weren’t growing as they should, and his region was hit by drought. He often thought that he’d have to give it all up. Through the Nescafé Plan, Eduardo was one beneficiary from the distribution of 29 million high-yielding, disease-resistant coffee plantlets to farmers in Mexico. This allowed farmers to renovate their plantations, improve quality and increase productivity levels on plantations by up to 81%. He was also one of 390 coffee farmers who took part in a course run by Nescafé and the Monterrey Institute of Technology and Higher Education, which gave them knowledge, help and advice on running their businesses. Eduardo returned to his coffee estate eager to apply his new knowledge, on everything from improving the coffee crop to improving farm economics. Respect for our communities If Eduardo’s experience reflects Grown Respectfully by showing how farmers can benefit from the Nescafé Plan, its positive community impact is also evident across our 17 countries where the Plan is active. For example, in Kenya, 6,000 women have benefited from a Women’s Empowerment Program, with some promoted to leadership roles in cooperatives as a result. A Nescafé partnership with another coffee brand, Zoegas, provided over 300 coffee farming families with better access to safe drinking water. In India, Nescafé provided access to free medical diagnoses and care for more than 1300 farmers, farm workers and their family members. And in Vietnam, Nescafé enabled its farmers to increase their incomes by 30% by adopting better agronomic practices. Respect for our planet Under the Plan, Nescafé is also ensuring that, while growing better coffee, farmers are applying new techniques to protect and conserve natural resources for future generations. In Colombia, for example, Nescafé has worked closely with over 2600 coffee farmers to ensure more efficient use of water, wastewater treatment and reforestation. It has also run training activities to raise community awareness on sustainable water use. The brand has also protected more than 200 natural water springs on coffee farms in Brazil, planted 70,000 native trees and installed nearly 100 wastewater-cleaning systems on farms, to avoid contaminating rivers and streams. All these local actions support Nescafé’s 2020 public objectives, which include – responsible sourcing for 70% of all Nescafé coffee, distributing 220 million coffee plantlets, better coffee economics and labour rights, and sustainable factory operations. Grown Respectfully reflects how Nescafé contributes to Nestlé’s broader company purpose of enhancing quality of life and contributing to a healthier future – for individuals and families, for our communities and for the planet. armers like Eduardo have benefited from the Nescafé Plan through being able to grow better crops, manage their finances effectively and to help other farmers. These things have helped inspire his own, personal transformation. "I became a better human being, a better parent," Eduardo says. "Now I can be close to my children, to raise them, and, most importantly, I can keep the promise I made to my grandfather."

The quest for better packaging

How many pieces of packaging do you recycle every year? You may have no idea, but there are few more important questions for the future of our planet. From the oceans to the deserts, the world depends on our ability to reduce, reuse and recycle our waste. It depends on our ability to create a world in the very near future where every single piece of packaging is recyclable or reusable. And it depends on our ability to create a world where rubbish isn’t sent to landfill, but is turned into something new. “Plastic waste is one of the biggest sustainability issues the world is facing today” Mark Schneider, Nestlé CEO Those could be the words of an environmental campaigner. In fact, they are from Nestlé CEO Mark Schneider when making a new commitment to improving the environmental performance of packaging, aimed at cutting pollution from plastic packaging waste. The global announcement represents the start of a new phase in Nestlé’s work on packaging. Nestlé’s ambition is that 100% of our packaging is recyclable or reusable by 2025. Up to 12.7 million tonnes of plastic enter our oceans, rivers and waterways every year. And although plastic packaging is vital for keeping food safe and fresh, there is still a lot of work to be done to ensure less is used, what is used is fully recyclable and that recycling systems are available around the world. The packaging of the future Doing his part to help protect the environment is motivation for Xavier Caro as he works to develop new packaging materials at Nestlé’s Product Technology Centre in Germany. He has dedicated his career to making more environmentally-friendly packaging. His starting point is to question whether packaging for a product is absolutely necessary. If the answer is yes, Xavier then looks at all of the options for reusing and/or recycling. In his laboratory he meticulously peels back the three layers of a powdered soup packet, assessing the need for the inner layer of plastic, alongside the aluminium foil and the outer plastic laminate. However, most packaging cannot be avoided altogether. It is essential to protect food from damage, germs or pests when being transported. And the packaging also carries important information about the food’s ingredients and nutritional value. New technologies and innovations are making a wider choice of packaging materials and more environmentally friendly formats available. Each time a new prototype for packaging is made, it is tested to see how easy and convenient it is for customers to use and store. But, at the end of the day, if its environmental performance is not better than the original version, it will be not be used. Xavier will return to the drawing board in his quest to make something better. Transforming the plastics economy Developing new packaging that is environmentally friendly and fully recyclable is only part of Xavier’s challenge. “It’s not good enough just to design the pack and make it recyclable,” he says. “It is important to establish how this packaging will be collected and recycled too.” In Europe that is a relatively straightforward process, he explains, because companies can work alongside established recycling schemes. But in less developed countries the company needs to work with local partners to ensure recycling is a reality as well as a mere possibility. Single-serve product packaging makes up a large portion of plastic waste in the environment. It’s an issue that companies like Nestlé are working to address. The company is a participant in the New Plastics Economy, which advises developing countries such as Indonesia and the Philippines where marine litter is a significant problem. The initiative, led by the Ellen MacArthur Foundation, aims to rethink the future of plastics by applying the principles of the circular economy. It brings together key stakeholders to rethink and redesign the future of plastics, starting with packaging. Around the world, people like Nestlé’s Xavier Caro are taking up that challenge. They are working to make sure our food is packaged in a way that keeps it safe and meets human needs – and ensures the natural world and the animals that live in it are not harmed by waste plastic.

Zero water

Industry is a thirsty thing. After agriculture, it’s the biggest user of fresh water around the world. About 22% of our water is used by industry, compared (pdf, 2 Mb) to 8% in our homes. So how on earth do you go about making a ‘zero water’ factory? Innovative technology When it comes to saving natural resources, often innovation holds the key. That is certainly the case at Nestlé’s powdered milk plant in Lagos de Moreno in Mexico. The ground-breaking factory, which opened in 2014, extracts water from the milk it processes instead of drawing on an outside supply. By doing so it saves 1.6 million litres of water per year, about 15% of Nestlé’s entire water use in Mexico. And the technology which has transformed the Mexican plant will soon save even more water elsewhere. Two factories in Brazil have gone ‘zero water’ and four more will come online in the country by 2018. Going forward similar plans are in place for facilities in South Africa, India, Pakistan, China and California. A precious resource After years of drought, California understands what a precious resource water is. Efforts to reduce the amount of water used in industry are of particular importance. Nestlé is cutting water consumption at the five water bottling plants and four food and pet care facilities in the state. Work is already underway to transform the milk factory in the city of Modesto. As a ‘zero water’ facility it will not use any local freshwater resources for its operations. The CHF 7 million (AUD 9.3m) project should save nearly 286 million litres per year when it is completed in 2018. At Nestlé factories in Bakersfield and Tulare, savings of more than 98 million litres of water each year are being made through water conservation measures. These will potentially reduce the plants’ absolute annual withdrawals by 12% compared to 2014 levels. Nestlé Waters’ bottling plants in California should save 208 million litres of water a year. That’s a reduction of nearly 8% compared to 2014. And work is underway to implement the Alliance for Water Stewardship standard in each of the factories. Three-step saving Nestlé uses a three phase approach to reduce water in its factories around the world. First, engineers look for ways to optimise the existing manufacturing processes to reduce water use. Second, they look for opportunities to reuse the water already being used. In the third phase they deploy innovative methods to extract water from raw materials and recycle it. The 'zero-water' factory is an example of third-phase innovation. This triple-pronged approach has been used in more than 80 factories worldwide, enabling an overall reduction in water usage of 25% since 2010. Across the entire company, Nestlé has 516 water saving projects at its factories, saving 3.7 million m3 of water every year. That’s the equivalent of 1500 Olympic sized swimming pools. The global research organisation World Resources Institute is also helping Nestlé to save water by ensuring water management is environmentally, socially, and economically beneficial. Innovation and careful management has helped Nestlé cut water consumption by a third over the past ten years. But the job is never done. The company constantly reviews its use of resources and is committed to staying at the forefront of efforts to increase efficiency and reduce all types of waste wherever possible.

The circular economy

With an overall score of 92 out of 100 (pdf, 600Kb), Nestlé received industry-best scores in all three dimensions: Economic, Environmental and Social. The Index praised the company for the ‘outstanding steps’ it has taken to embed human rights into supplier management policies, as well as its industry leadership in health and nutrition. Awarding Nestlé an ‘Environmental score’ of 100, the Index recognised the company’s commitment to ensuring that its products and process are as environmentally and socially friendly as possible. For example, in Switzerland Nestlé recently partnered with local farmers to open the country’s largest agriculture biogas plant, which uses manure from cattle to generate green energy for its Henniez bottled water factory and the Swiss power grid. In return, the farmers receive a more environmentally friendly manure, and Nestlé also helps them care for the local environment. Projects like this helped earn a company score of 98 out of 100 in the DJSI social dimension for Corporate Citizenship/Philanthropy.

Green energy

Andrew Griffiths’ eyes don’t quite glaze over, but there’s a broad smile on his face as he talks about the new addition to the Nestlé factory at Fawdon. The ‘pet’ he’s referring to isn’t an office cat or a goat brought in to keep the grass down. Andrew, who is Nestlé UK's Head of Environmental Sustainability, is talking about an anaerobic digestion plant, which quietly gurgles its way through hundreds of thousands of litres of liquid waste every day and turns it in to green energy. Chocolate soup The factory in the north east of England makes some of Nestlé’s best known UK confectionery brands such as Rolos and Fruit Pastilles. The production of these sweets inevitably creates some waste. Looking for ways this waste could be put to use instead of thrown away, managers turned to a centuries-old technique called anaerobic conversion. The plant is primarily focused on processing the site’s liquid wastes. In addition rejected chocolates and sweets that aren’t suitable for eating, and other leftovers including starch and sugar get broken down into small pieces. The mixture is then dissolved into waste liquid from the site’s cleaning processes to create a ‘chocolate soup’ (which is definitely not as tasty as it sounds). This ‘soup’ is then fed into an airtight tank. Inside, anaerobic digestion occurs - the natural process of bacteria breaking down biodegradable material. And this is why Andrew Griffiths sees the plant as being like a pet. It’s a living thing with its own likes and dislikes. “It can get quite upset if its diet changes too quickly. It evolves and develops over time.” The agricultural industry has used the technique for centuries but what makes the system at Fawdon unusual is its ability to handle this liquid waste so much quicker. From waste to warmth Anaerobic digestion produces biogas, a renewable fuel which contains methane. The biogas produced at Fawdon can provide enough power to meet between to 5-8% of the site’s energy needs. As well as producing energy, the digester helps clean the waste water discharged from the factory. "It's given us a great chance to cut our waste, dramatically reducing our environmental footprint," Andrew Griffiths says. While based on a simple principle, the biogas system took time and money to get right. The site piloted the project for three months, using a smaller version of the anaerobic digester. Set up at a cost of CHF 4.7 million (AUD $6.2m), the system at Fawdon wasn't cheap. But the cost savings it generates mean the system is economically viable. Zero waste The Fawdon project is just one of many that Nestlé is investing in. Recently, the company gave livestock farmers in Panama small-scale anaerobic digesters. These turn animal waste into biogas for cooking and liquid fertiliser. The farmers no longer rely on wood for fuel, reducing deforestation in the surrounding areas. Nestlé has implemented similar projects with farmers it works with in places like China, Mexico and Pakistan. These are just a few examples of how the company is working to achieve its objective of zero waste in its sites by 2020. Human behavior For Andrew Griffiths, one of the unexpected benefits of the zero waste project is the effect it has had on the workforce. Seeing waste being turned into energy on site has made everyone focus on what else they can do in their own area to make a difference. “It's been a catalyst to help everyone at the plant understand more about reducing our environmental impact." Bacteria may be tiny, but they can make a huge difference when it comes to reducing energy consumption, eliminating waste and even changing human behaviour.

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