As we move ahead in the 21st century, we believe that a business strategy based on high-quality food and beverage products can only be maintained by business practices based on the principles of long term sustainable development.

Nestlé’s engagement in sustainable agriculture aims to minimize risks of contaminants in raw material sourcing, protect the company’s longer term sourcing requirements for agricultural raw materials, ensure quality, availability and competitive prices for consumers, and appeal to consumers who give preferences to sustainable brands which contribute to social, environmental and economic progress.

Nestlé value chain activities and voluntary investments support such sustainability objectives. Sourcing standards help mitigate safety risks. Research activities and direct farm assistance enable Nestlé to meet its quality and brand requirements while contributing to better farm practices.

Additional investments in cross sector partnerships such as The Sustainable Agricultural Initiative Platform bring these efforts to a global scale. Entire regions have seen vast productivity increases with the support of Nestlé agronomists and scientists. Nestlé’s challengefor the future will be to quantify how its activities translate into progress regarding the fundamental issues facing global agriculture: boosting farm income and economic development in general, improving labor conditions and achieving better environmental management throughout the raw materials supply chain.

For everyone in our company, our responsibilities and values are reflected in our commitment to the Nestlé Corporate Business Principles. These set out the basic rules we follow to make sure we maintain the highest standards of conduct. This report presents some key performance measures and figures, and shows how we endeavor to put our principles into practice.

In meeting our commitment to be a leader in sustainable development, we build on two of the essential pillars of our long term strategy: innovation-renovation and operational efficiency.

We innovate in new products and technologies to meet the present and future needs of our consumers in an increasingly sustainable manner, and we improve or renovate existing products and technologies for the same reasons. We are dedicated to continuous improvement in the efficient use of resources, resulting not only in lower operating costs, but also in a lower impact on the environment. Managing our activities in accordance with the principles of sustainable development makes good business sense.

Given the company's focus on high quality, food safety, nutritional value, and consumer appeal, Nestlé needs to purchase high-quality agricultural goods produced in a sustainable way. Even though we own no agricultural land, our approach has been, through technical assistance, to improve the farming methods and standard of living of millions of farmers.

This is Nestlé's initial effort to report on sustainable development, attempting to describe our impact on the well-being of people and the planet. As such, it is a step on a journey, as opposed to an end point in itself. In addition, we have produced more detailed reports, entitled Environment Progress Report 2000 and Nestlé in the Community, and our annual Management Report provides details on financial performance.

We are committed to being open and transparent, and to listening to the views of others as we move forward in sustainable development.

Read more about Nestlé's policy on "Sustainable Agriculture & The Food Industry" in a presentation given by Mr. Hans Jöhr, Corporate Head of Agriculture, Nestec S.A., at the World Food Prize International Symposium in Des Moines, Iowa, USA on October 19, 2006.