A message from our Chairman and our CEO

Peter Brabeck-Letmathe (Chairman, Nestlé) speaking at the 2014 CSV forum
Leadership in focus: Peter Brabeck-Letmathe (Chairman, Nestlé) welcoming guests from government, academia, civil society and business to the 6th Creating Shared Value Forum in Switzerland, which was co-hosted with the United Nations Conference on Trade and Development.

We are pleased to share our 2014 Creating Shared Value Report including an assessment of the challenges we face and the real progress we have made in meeting our societal commitments. This report underlines our firm belief that for a company to prosper over the long term and create value for shareholders, it must create value for society at the same time. Each and every commitment is based on our own convictions, not convenience. Respect, for people, different cultures, the environment and for the future of the world we live in, is the foundation of Creating Shared Value.

These commitments serve both external and internal purposes. They have helped frame our external communications but, equally importantly, they guide our management and all of us at Nestlé across Business Units, Zones and Markets in our collective efforts to reach these specific objectives. They also take into account the views of our stakeholders. We meet regularly with NGOs, academics, multilateral agencies, governments and others to listen and learn from their criticisms and encouragement. Our efforts are strengthened by this dialogue.

Our shareholders also guide us with insightful questions about these societal commitments and how they strengthen our business. This we can explain. Our ambition to be the leading Nutrition, Health and Wellness company is at the heart of our corporate strategy and what we live for as a company. We care deeply about people’s health and wellness, and are investing for the future through our network of research centres, the Nestlé Institute of Health Sciences, Nestlé Health Science and the new Nestlé Skin Health. A deep understanding of nutrition, and access to tastier and healthier food and beverages, is what our consumers demand and what society needs.

Water too is an essential part of good nutrition and, at the same time, a human right and the linchpin of food security. We actively promote healthy hydration at all ages while making every effort to reduce water use in our own operations and advocating for inclusion of a specific goal on water in the post-2015 development agenda. Our new Cero Agua factory in Mexico, a dairy factory with a positive water impact, exemplifies our commitment to reducing water use in our own operations and how we embrace new technologies and innovative ways to achieve this goal. Water is a business opportunity, an operational challenge and a societal issue that is of deep concern to us all. As we have said many times, we will run out of water long before we run out of oil.

Likewise, rural development and our work with farmers combined with our Responsible Sourcing Guideline help address the need to build sustainable farming communities, but also to answer our own consumers’ demands to know ‘where does my food come from?’ Our rural development work helps secure the quality and quantity of supply of our key categories and increase the attractiveness of farming for future generations.

Paul Bulcke (CEO, Nestlé) visiting the Food Safety Institute in Beijing
Innovation in focus: Paul Bulcke (CEO, Nestlé) visiting Beijing in March 2014, to open the Nestlé Food Safety Institute, which works with authorities to help provide the scientific foundation for food safety policies and standards.

We continue to actively manage our commitments to environmental and social sustainability, necessary for operating our factories and for the sustainable growth and development of the communities and countries where we operate. Our commitment to youth employment, called the Nestlé needs YOUth Initiative, helps strengthen and develop the skills and employability of young people across Europe. This programme will soon be extended globally.

At Nestlé, Creating Shared Value is the way we do business and it is embedded in our holistic management thinking. Integrating business opportunity and societal need is what we expect of our leaders and employees. Internal management tools help facilitate this process, such as a strategic portfolio tool that assesses our brands against financial and nutrition targets, a capital expenditure process that includes societal indicators, and a Rural Development Framework which digs deep into the needs of cocoa, coffee and dairy farmers and farming communities, helping us to better target our efforts and investments. Our challenge is to find a consistent method of measuring the business value of Creating Shared Value as well as to assess societal impacts and not just activities. We will continue to develop our thinking on this during 2015.

Join us on our Creating Shared Value journey which focuses business on the long term where the success of society and economic activity are intimately intertwined and mutually reinforcing. It should also lead to more effective, collective action to address some of society’s deepest concerns and challenges. Better dialogue, engagement and partnerships are required if we are to help address the ‘double burden’ of malnutrition, water scarcity, sustainable farming, climate change, human rights and more.

This year, again, we have introduced some new commitments in the areas of responsible marketing to children, anti-corruption and internal and external grievance mechanisms. With this report, we also restate our support for the UN Global Compact, as a founding member of the UN Global Compact Lead – an important platform for corporate sustainability leadership. We look forward to your feedback on our commitments and on this report.

Peter Brabeck-Letmathe and Paul Bulcke