Nestlé Commitment on Deforestation and Forest …

1 Policy Mandatory February 2013. Appendix to The nestl Policy on Environmental Sustainability nestl Commitment on Deforestation and Forest Stewardship Forests cover over four billion hectares globally zero waste. The success of nestl is intimately and provide important ecosystem services such connected with the health of the forests and as carbon storage, water regulation and quality, forested landscapes from which it sources some and a home for pollinator insects. Nearly 90% of its raw materials. nestl recognises that the of terrestrial biodiversity is found in forests. One standards and practices followed by its suppliers billion people rely upon forests partially or wholly can impact positively or negatively upon the for their livelihoods, many of them the world's forests, through the expansion of agriculture or poor, whilst forests are also the foundation for a Forest plantations into forested areas, and the wide range of commercial activities.

2 Stewardship of forests from where raw materials Forests continue to be lost, primarily in the are sourced. biodiversity-rich tropical zone, at rates that have nestl believes that improving the remained largely static for the last 20 years. sustainability of our raw materials will create The causes are a complex mixture of factors shared value across the supply chain from including pressure for land for the rural and local communities all the way through to urban poor to improve their livelihoods, Forest consumers. The shared value will include inter industry expansion, and importantly, agricultural alia maintenance and restoration of ecosystem expansion. Degradation, a loss of Forest quality services, improved net small farmer income, and without the loss of total Forest cover is also a stronger relations between the different actors major problem though much less documented.

3 In the supply chain. It has therefore produced Degradation and habitat fragmentation are this Commitment on forests in order to describe particularly impacting upon species that require its commitments to both tackle Deforestation large contiguous Forest areas. and improve the standard of Forest stewardship, nestl buys a range of products that originate through the responsible purchasing of products from: land where crops are integrated within from forests and forested landscapes. Further forests; land that has been converted from forests detailed guidance on implementation of this in the past; and directly from forests. In addition Commitment is provided in more detailed nestl Waters owns and leases some forests and Responsible Sourcing Guidelines. land surrounding some of the water sources for This Commitment has been drawn up in its mineral water business.

4 These are managed to consultation with expert external stakeholders. ensure the purity and long term sustainability of It is applicable to all nestl majority owned the water resource. companies. nestl will discuss with Joint Venture nestl has long had a Commitment to partners the extension of this Commitment to joint environmentally sustainable business practices, venture operations. focusing on water preservation, natural resources efficiency, biodiversity conservation, air emissions reduction, climate change adaptation, and nestl Commitment on Deforestation and Forest Stewardship 1. nestl Principles on Deforestation We consider three years as sufficient time for and Forest Stewardship suppliers to show material progress towards nestl understands that its most significant delivering traceability and meeting our influence on forests is through its sourcing of RSGs, and five years as the maximum time paper and board, and agricultural commodities.

5 That it should take to be able to demonstrate nestl 's ambition therefore, is to ensure that its compliance. We will support suppliers who products have not led to Deforestation and that are willing to proceed towards meeting the nestl and its suppliers are responsible stewards1 RSGs, and exclude suppliers who are unwilling of the forests and forested areas from which they to comply with them. We will conduct regular are sourcing materials. Achieving this involves field audits of existing suppliers to determine ensuring that the Forest areas and ecosystems their performance against the RSGs. that supply materials are either protected, or Utilise independent third party verification where managed, have been assessed for their or certification schemes, to facilitate the conservation value and appropriate management demonstration of compliance against nestl 's responses applied.

6 RSGs. Such schemes are not the end- To this end nestl will ensure that all its raw point, only a tool to facilitate measurement materials sourced from forested areas: of progress. We will regularly review and Have not led to deforestation2 approve certification schemes for nestl use, Have not led to the loss of high conservation based on the following criteria: they deliver values3 compliance with national and international Have been produced in compliance with The laws and treaties; are scientifically based; they nestl Corporate Business Principles and The demonstrate a consistent high standard across nestl Supplier Code4 the world; have a balanced multi-stakeholder Have led to the creation of shared value for governance; have the broad support of NGOs;. society and local communities5 include respect for the rights and title of indigenous peoples and local communities.

7 The raw materials considered to have the highest have the active support and inclusion of small impact on Deforestation and Forest stewardship, owners; have the ability to exclude Forest and therefore the priorities for nestl to work on, conversion and other controversial sources;. are: paper & board, timber, palm oil, and soya. include the High Conservation Value concept;. Other commodities including inter alia, meat incorporate third party verification and chain & dairy products, cocoa, coffee and cassava of custody. are also problematic in some places, and will be Use the cut off dates established by Forest tackled accordingly country by country. Biofuel Stewardship Council (FSC), the Roundtable on is a further commodity associated internationally Sustainable Palm Oil (RSPO) and Roundtable with Deforestation and conversion of high on Responsible Soy (RTRS) for conversion of conservation value areas.

8 nestl 's purchases of forests and High Conservation Value areas, to biofuel are limited to transportation fuels which determine when nestl will not source product contain legally stipulated biofuel content, over from plantations/farms converted from Forest which nestl has little influence. nestl is very land. For those commodities where no suitable concerned about the impacts on food security scheme, or recognised cut-off date exists, we and environmental degradation and is advocating will set our own cut-off date, and communicate against the use of food crops for biofuels. A that publicly. separate Commitment on biofuels is available. Promote these principles through nestl 's farm level extension services including assisting nestl Specific Commitments small-holder farmers and communities to In furtherance of the above commitments, improve their tenure and stewardship of their nestl will: trees and forests.

9 Develop Responsible Sourcing Guidelines Communicate these principles and RSGs to (RSGs) for different commodities that suppliers and stakeholders, and provide regular define how we will meet these principles on and transparent feedback on the performance Deforestation and Forest stewardship. against the RSGs in annual reports and on the Set annual improvement targets and progress website. milestones for each RSG. Increase the transparency to consumers and Mobilise resources and work closely with customers of our commitments on Forest the companies and suppliers who provide stewardship and Deforestation through nestl with raw materials to help them meet category and product brand communications, these Forest Stewardship Principles. For our including web, point of sale and on-pack use suppliers we will require that they are able to of certification logos.

10 We will ensure that any trace, through to the source, using a verifiable communications on responsible sourcing chain of custody system, and to implement of commodities only communicates that a time bound action plan to meet the RSGs. the products are independently certified 2 nestl Commitment on Deforestation and Forest Stewardship to internationally recognised third party multi-stakeholder certification schemes6. Only schemes approved by an executive board member of nestl will be used and communicated. Engage with external stakeholders to improve our understanding of the issues, adapt our commitments and achieve our goals. This will include multi-stakeholder fora such as the Roundtable on Sustainable Palm Oil, and the Roundtable on Responsible Soy. nestl will support the High Conservation Value Resource Network, and Forest certification schemes to develop their coverage of water and carbon values, and improve their inclusiveness to small-holder Forest owners.