creating shared value at nestlé

8/6/2019 Creating Shared Value at Nestlé

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Creating Shared Value at NestléCreating Shared Value has always been the core of who we are at Nestlé.

Creating Shared Value played an integral role at the inception of our company. Influenced by

the high infant mortality rate in mid 19th century Switzerland, our founder, Henri Nestlé,

developed the first cereal milk. His invention enabled him to save the life of his neighbors child.

From that single product, he founded what was to become the largest food and beverage

company in the world.

Today, more than 140 years later, Nestlé creates value through its basic business activity not

only for its shareholders but also for the societies in which it operates. We make long-term

investments that benefit both our business and our public because we recognize the inherent

interdependence of both.

We call this Creating Shared Value (CSV).

Creating Shared Value means making a positive impact upon the quality of life of the

communities we serve; our employees and their families; and our suppliers while also giving

value back to our shareholders. We Create Shared Value in three key areas: Nutrition, Waterand Rural Development.

At Nestlé Philippines:

We strive to make nutritious foods and beverages more accessible and affordable to Filipinos

while informing them about the importance of proper nutrition, health and wellness.

We help coffee farmers improve their yields while providing barangays with livelihood skills and

other opportunities.

We reduce, reuse and recycle our resources, optimizing both water and energy usage in our

factories. Nestlé Philippines is committed to constantly creating shared value among Filipinos

through sustainable programs and in so doing to help nurture future generations of Filipino

families as we have been doing for the last 99 years.

JOHN MILLERChairman & CEONestlé Philippines, Inc.

NutritionCreating access to nutritious products and promoting nutritioneducation«

³We strive to make nutritious food and beverages more accessible and affordable to

Filipinos while informing them about the importance of proper nutrition, health and

wellness´

± John Martin Miller, Chairman & CEO, Nestlé Philippines,Inc.



Laki Sa Gatas

Nestlé's commitment to promoting healthydietary habits is supported by educational

awareness campaigns that aim to givepeople a better grasp of what good nutritionis and its importance for the achievement of good health and overall wellness.

Launched in 2006, the LAKI SA GATAS initiative aims to educate Philippine publicschool communities on the value of healthy nutrition and the importance of drinkingmilk. More than just being educational, this advocacy at its very core seeks to empower public school kids, mums, teachers and educators alike that through balanced healthand education² realising one¶s dreams and ambitions are possible.

³LAKI SA GATAS´, loosely translated as ³Growing Up with Milk´, was born out of thereality of low milk consumption and the increasing number of prevalent cases of malnutrition amongst Filipino children in the lower socio-economic classes.

Now on its 4th year, the LAKI SA GATAS advocacy has visited over 2,700 schoolsacross the country and has reached out to more than 1,7 million school children, over half-a-million mothers and nearly 40,000 educators. This year the advocacy is stronger than ever rolling out to more public school communities with new and excitinginnovations that seek to further engage advocacy participants.

As each LAKI SA GATAS session in a school has 3 major event components² kids,mums and teachers sessions²all components this school year have been prepared tobe more educational, fun, and engaging.

In the Children¶s Session, grades 2 and 3 pupils are treated to fun and learning activitiesto help them understand healthy nutrition. They are likewise entertained by BEARBRAND Powdered Milk Drink mascots, ³Mama Bear´ and ³Kuya Bear´ (big brother bear).

The highlight of this session is to encourage children's ambitions. They are given blank

paper where they can draw the ambitions they would want to pursue when they growup. The drawings will serve as a reminder that a healthy mind and body can help themachieve their dreams.



In the Mothers¶ Session, the participants are lectured onhow to prepare healthy and affordable meals for their families. Mothers are also encouraged to serve their children milk everyday as a means to help give their children the nutrition they need to help them perform wellin school.

Educators, meanwhile, are trained on how to addressmalnutrition in their classes during the Teachers¶ Session.They are given tips on how to make teaching healthynutrition more fun and engaging for children.

Through this programme, we hope to reestablish thevalue of milk and its vital role and importance for the health of Filipino families acrossthe country.

Nestlé Healthy Kids Program

Towards a Healthier future, 40 Kids at a Time« Some 25.6% of Filipino children, 6-10 years of age, are found to beunderweight, according to the 6th National Nutrition Survey of theFood and Nutrition Research Institute (FNRI). As part of Nestlé's

mission to nurture generations of Filipino families, the Corporate Affairs Department of Nestlé Philippines, together with the RotaryClub of Caloocan, Business Team Nutrition Management System,Inc., NGOs and Local Government Units pooled their resources to

start a 90-day nutrition program for 40 malnourished children aged 7-12 at the LibisTalisay Elementary School in Caloocan.

Aptly called the Nestlé Healthy Kids Program, the feeding program is designed to bringnutrition into the lives of severely malnourished children. The program providessupplementary daily feeding for 90 days. Both the children and their parents go through

basic nutrition education -- for children so that they become aware of the importance of eating nutritious food early on and for parents so they will realize that nutrition need notbe expensive and that they can better nourish their kids with the right food andbeverage choices. As economics is a critical factor in malnutrition, the program alsoprovides the parents with livelihood opportunities so that they earn extra income to helpsupport their families.



The livelihood strategy links them up with our other Nestlé livelihood programs such as theBusiness on Wheels program and the Micro-Distributor program and offers these as anopportunity for the families to supportthemselves. And finally, to ensure theconsistent supply of food for the school,Nestlé also supports the construction of a

school garden consisting of basic vegetables that they can grow within school premises. With the help of the Nestlé Healthy Kids Program, which encompasses daily nutrition,nutrition education, effective weight monitoring, parent education, livelihoodopportunities as well as school garden initiatives, Nestlé hopes to be able to make apositive difference in the lives of 40 kids at a time. The Program, which is part of theNestlé Global Healthy Kids Programme set up by Nestlé S.A. in Vevey, will be scaled

up in time to reach communities and public schools located near the Nestlé factories inthe Philippines

Water and Environmental SustainabilityOptimizing water managementand advocating the responsibleuse of scarce resources«

³We reduce, reuse and recycle our resources,

optimizing both water and energy usage in our

factories.´

± John Martin Miller, Chairman & CEO, NestléPhilippines, Inc.

Waste Water Treatment Plants Showcasing the Company¶s reverence for water are the world-class wastewater treatment plants operating in all its factories. Manned by highly competent personnel,

these treatment plants capture every drop of wastewater discharged from the factories,cleanse the water of impurities, and release it to natural waterways clean enough tosustain marine life. Treated water from Nestlé factories is constantly tested and isknown to meet, and often exceed, strict government standards. The Company haslikewise explored several areas where water can be further optimized, leading to the re-use of sealing water from vacuum pumps, cooling water from MILO processing, rinsingwater, and recovered water from reverse osmosis plants.



These initiatives, coupled with simple techniques as the use of sensor-operated faucetsthat ensure automatic stoppage of water flow, have cut down water consumptionthroughout Nestlé by about 16% since 1997, or an average of 65,500 cubic meters of water every year.

Treating and Reusing Water

The wastewater treatment facilities of Nestlé factories showcase how water can betreated and reused, and demonstrates the importance the Company gives to water. Inthese factories, treated waste water is used to sustain life forms, from watering thegardens in the premises, to propagating Koi fish and tilapia, serving as a constantreminder to employees and guests about the life-giving value of water.

Agriculture and Rural DevelopmentDeveloping rural areas and communities by aiding farmers, facilitating indirect and direct employment

and continued infrastructure development

We help coffee farmers improve their yields while providing barangays with livelihood skills

and other opportunities

- John Martin Miller, Chairman & CEO, Nestlé Philippines, Inc.

SUSTAINABLE COFFEE FARMING TRAINING PROGRAM

Coffee farmers are Nestlé¶s fundamental partners inproducing coffee products of the highest possiblequality for Filipino consumers. Knowing this, theCompany pursues an agronomy program aimed athelping farmers improve both the quality and quantityof their coffee yield. At the center of this program is theNestlé Experimental and Demonstration Farm (NEDF)in Tagum City, Davao del Norte, which was built in1994 to serve as the hub of the Company¶s agriculturalresearch and training activities. The Nestlé agronomy program helps farmers in four

ways:

Providing access to farming technological advances.Nestlé agronomists continually conduct trials and experiments at the NEDF to discover and develop better techniques of growing coffee. Continuing research allows Nestlé toequip farmers with scientific tools for adapting to changing agricultural conditions or new



community leader overseeing the operations and transacting business with the factory.The group has since become the sole supplier of sewing services to the factory.

Another noteworthy livelihood activity for Barangay Bagong Pook housewives is theYard and Garden project of the Nestlé Lipa Factory, which involves cut flower Product

on and organic vegetable farming in a plot of land within the premises of the factory.Here, the ladies grow vegetables and ornamental plants. With the factory givingfinancial assistance, planting materials, and relevant training, the Yard and Gardenmembers take full charge of the operation of the garden and sell all their produce to thefactory canteen and employees. They also rent out the ornamental plants to the factory.They use the earnings to pay for their operational expenses, including remuneration of those involved in the project.

BOWERS, MICO-D, ICE CREAM CARRITOS

Expanding its reach beyond barangays,Nestlé has developed a platform where itprovides livelihood to thousands of otherwise unemployed citizens throughoutthe country. This is in the distribution andselling of its products under the Micro-Distributorship (MD) Program, whichprovides able-bodied individuals who are at

least high school graduates with an opportunity to become small-scale entrepreneurs byselling Nestlé products to sari-sari stores. Under the Program, these fledglingentrepreneurs personally distribute and sell Nestlé products to small stores in denselypopulated areas that can not be covered by existing Nestlé distributors.

A similar program runs in two other business units of the Company² Ice Cream andNestlé Professional. In Ice Cream, the Program provides livelihood to commissionedstreet vendors who ply the streets of residential subdivisions and other high-traffic publicareas to sell the range of NESTLÉ Ice Cream products categorized as ³impulse´, thekind that consumers are known to crave for on a whim. In Nestlé Professional, livelihood

comes through its Business on Wheels (BOW) Program, where members earn byselling Nestlé products to small carinderias.

In all three programs, the peddlers are trained on the proper way of selling, productknowledge, and the mechanics of the program they are in. They are equipped withNestlé-branded motorized cabs and uniforms, and assigned to certain territories to tapand develop their accounts. They get their stocks of Nestlé products from Nestlédistributors, enjoy a certain discount on distributor rates, and are allowed to mark up



their price by a certain percentage. On any regular day, these enterprising peddlersearn a net income higher than the daily minimum wage, with the chance to earn morewell within their capacity.

GAWAD KALINGA

The Company¶s flagship project for theless-fortunate is its involvement in GawadKalinga (GK), the balikatan inspiredhousing program initiated by an NGO.Casting its support in 2003, Nestlé helpedbuild houses in Baseco for about 40families who had lost their homes to fire,

and adopted 14 more families to bring to 54the total number of homes it has so far sponsored. Seeing the positive impact of the Company¶s first Gawad Kalinga (GK) venture, NestléPhilippines has pledged to sponsor more GK villages until 2010, starting with 50 homesin Lipa and another 50 in Cagayan de Oro. Beyond merely building houses, Nestléintends to incorporate nutrition, water conservation, and community development inevery GK village it develops. The GK village in Lipa is envisioned to become anecovillage showcasing environmentally sound practices. It is equipped with a rainwater catchment system that will allow recycling of rainwater. The village uses of reed bed

technology, which processes sewage by natural reed system without the use of chemicals.

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