Bureau Veritas Independent Assurance Statement

To: the stakeholders of Nestlé S.A.

Introduction

Bureau Veritas has been engaged to provide external assurance to Nestlé SA (Nestlé) over its Creating Shared Value (CSV) report (the Report) and reporting process. The preparation of the Report is the sole responsibility of Nestlé.

Our aim is to provide assurance to stakeholders on the accuracy, reliability and objectivity of the information therein and to express our overall opinion as per the scope of assurance. The objectives, scope, methodology, limitations and exclusions of our work are detailed below.

Objectives of Assurance

The objectives were to:

1. provide reasonable assurance over the content of the Report for the reporting period;
2. provide an impartial commentary on the reporting process and associated systems and, where appropriate, propose recommendations for further development.

1. activities undertaken by Nestlé over the reporting period January 2007 to December 2007 (unless otherwise stated);
2. information relating to Nestlé’s issues, responses, performance data and case studies;
3. information relating to materiality assessment and stakeholder convenings; and
4. an evaluation of SHE data and systems across a sample of global operational sites.

• interviews with 29 key management staff predominantly at Nestlé’s Head Office in Vevey, Switzerland, and telephone interviews with external partners relating to materiality assessment (Sustainability) and stakeholder convenings (Accountability);
• review of processes for identification and collation of relevant information, report content and performance data from group operations;
• verification of performance data and factual information within the Report;
• visits (by Bureau Veritas’ global auditor network)) to approximately 4% of operational factories spanning 13 countries, to evaluate SHE data management, reliability and accuracy;
• pilot evaluation against the main principles of the AA1000 framework, entailing review of materiality analysis, stakeholder mapping and engagement, and overview of governance arrangements.

• Nestlé has identified and selected its key reporting areas through a combination of ongoing internal risk management, external advice, regular informal stakeholder consultation and an initial series of formalised global convenings with key strategic ‘expert’ stakeholders, and that such subject areas are those of material impact to Nestlé and its stakeholders;
• the Report includes information that is reliable, understandable and clearly presented, provides a reasonable account of relevant activities performance from across the business on these material areas over the reporting period,
• the Report reflects a reasonable level of completeness for a first comprehensive sustainability report, and provides adequate information through its positioning, data and case studies;
• reported safety, health and environment (SHE) performance data is derived from the global NEST system and whilst this is reliable on the whole, inconsistencies were detected at site level (see below).

• the Report includes limited information on the organisations internal governance, structures and systems (although descriptive information does exist in other Nestlé reporting)
• the Report does not adequately reflect some issues of national and regional concern that would improve transparency and understanding, informing the debate around such issues if included in more detail;
• the decision not to include indirect CO2 emissions due to concerns regarding the accuracy of the collected data and conversion factors used, whilst rational, represents an omission to the Report of material concern;
• the Report includes direct CO2 emissions that are corrected by an overstatement of approximately 3% to compensate for the use by some of its factories of inconsistent conversion for natural gas calorific values;
• of the sites sampled, the transposition of data for all required parameters into the NEST system was not always reliable.
• the Report makes partial use of the Global Reporting Initiative’s (GRI) G3, including reference to a limited selection of performance indicators;

• consider how to present its position and performance in the most balanced manner, including further transparency and context on risks, impacts and response to critical stakeholder views of global, national and local issues, as well as addressing issues that have not been prioritised as highly in the Report (for example, community impacts, workplace conditions and supply chain), and those of increasing significance for the sector (for example, sustainable palm oil production);
• provide fuller detail on the organisations governance, accountability and management structures to enable greater understanding of its control over key risks and issues, including how these are prioritised for action;
• further develop and report meaningful performance indicators for areas of growing sector, stakeholder and global concern (for example, water management) that demonstrate implementation of its long-term CSV strategy and that could enable greater sector benchmarking;
• consider reporting results of internal compliance auditing, for example against industry-wide Codes of Conduct for marketing communications and labour standards in the supply chain, in order to provide transparency over non-conforming areas and resultant remedial actions;
• develop and disseminate to all users a protocol for the input of data into the NEST system that defines best practice, key responsibilities, entry data requirements, applicable conversion information and internal QA processes to be followed, to ensure reliable and consistent management of site-based SHE information, such as indirect CO2 emissions; and so
• accurately determine its indirect CO2 emissions for the next reporting and as a result determine the materiality of this parameter in relation to direct CO2 emissions (considering the GRI G3 core indicator, EN16);
• consider the status of sustainability and responsibility practice across global operations, including stakeholder consultation, and how this could be extended beyond the corporate platform to ensure that appropriate mechanisms are applied for capturing both internal and external material issues and concerns consistently, to enable balanced and increasingly global reporting.

This opinion has been formed on the basis of, and is subject to, the inherent limitations outlined below in this independent assurance statement. The assurance work was planned and carried out to provide reasonable, rather than absolute, assurance and we believe it provides a reasonable basis for our conclusions.

Limitations and exclusions

Excluded from the scope of our work is information relating to:

• activities outside the defined reporting period and scope;
• statements of commitment to, or intention to, undertake action in the future;
• statements of position, opinion, belief and / or aspiration;
• additional content on www.nestle.com/csv; (referring to this website),
• any information hyperlinked from the web-based Report.

London, March, 2008