Zhengjun Wang, who owns 9 cows and 6 calves, has been supplying milk to the Nestlé plant in Shuangcheng, North-East China, since 1990. A Nestlé project in the milk district now provides farmers with proper manure storage facilities, which reduces impact on water sources and also creates a biogas energy source for farmers’ homes.
“Depletion of natural resources and problems faced by rural communities affect agricultural productivity. Ensuring sustainable agricultural practices is in the interest of the entire food chain, from producers to consumers. And it is of urgent concern as global caloric consumption is set to double in the coming 25 years, which will require producing two to three times more agricultural products on the same amount of cultivated land.” Marc Pfitzer, Foundation Strategy Group
Nestlé’s practice of sustainable agriculture seeks to address the environmental, social and economic dimensions of farming and sourcing. In practice, this means, for example, helping to promote farming methods that preserve soil, water, air, energy and genetic diversity; minimize the risk of contaminants in raw materials; improve productivity and yields; boost farm income through transparent pricing; improve labor conditions; and help build traceability systems. Nestlé actively participates in international initiatives, such as the Common Code for the Coffee Community and the World Cocoa Foundation. These and other forums allow Nestlé experts to contribute experience and ideas to promote sustainability.
Rural development
Nestlé has a long history of helping farmers to be better and more prosperous suppliers. This has a positive long-term impact on economic and environmental development and standards of living, sometimes helping entire regions to increase agricultural productivity and economic performance. This often begins by helping farmers through agricultural programs that share good environmental and water management practices.
Our team of 675 agronomists and approximately 5,000 extension workers and contractors currently offers support and training assistance to 111,800 farmers via 28 projects in 21 countries as well as maintaining ongoing dialog with traders, governments and NGO partners. There are no conditions attached to the assistance we give and farmers are not obliged to sell their produce to Nestlé.
Such projects secure supplies of higher-grade raw materials, which ensure we can maintain production of high-quality end products. For example, Nestlé’s Doi Tung Experimental and Demonstration Farm helps hundreds of farmers in northern Thailand to grow Arabica coffee. They receive practical training on coffee fertilization, irrigation and harvesting techniques, which helps their coffee get a higher price. We have taken a similar approach in Yunnan Province, China, where Nestlé has set up a training center, demonstration farm, nursery and buying station.
Managing supplier relationships
In 2007, Nestlé conducted 3,400 audits of suppliers’ facilities to help ensure that they comply with Nestlé food safety standards. Our objective is a global, supply-chain-wide system of quality, social and environmental audits, which will not only reduce the total burden and any duplication of work, but also help us to replicate best practice across all key sourcing areas, continue building partnerships and deliver measurable results. Nestlé is also a member of AIM-PROGRESS Task Force, an initiative of leading fast-moving consumer goods (FMCG) companies that supports the use of common evaluation methods to determine CSR supplier performance and help promote responsible sourcing practices within the supply chain.
Nestlé insists on honesty, integrity and fairness in all business relationships, and when instances of non-compliance are discovered, corrective measures are needed for the supplier to be retained. It is Nestlé’s policy to apply sanctions in the event of misconduct or abuse of ethical standards and guidelines.
Furthermore, we make clear our expectations with regard to the social conditions of the farmers we buy from, with child labor and employee health and safety all high priorities.
Detailed policies and guidelines concerning our position on these and other issues can be found in the Reporting section. All measures taken to support environmentally sound business practices and improve environmental performance are set out in Nestlé’s Policy on the Environment.
Direct Purchasing guidelines
Nestlé is aware of the strain agricultural processes can put on environmental resources and ecological habitats. In order to maximize the performance of our agricultural inputs and minimize potential negative impacts, Nestlé has issued purchasing guidelines recommending, wherever possible, sustainable farming practices in the case of direct procurement from farmers.