Bureau Veritas’ Independent Assurance Statement

   

To: The Stakeholders of Nestlé S.A

Introduction and objectives of the engagement

Bureau Veritas logo

Bureau Veritas has been engaged by Nestlé S.A. (Nestlé) to provide independent assurance over the Nestlé in Society: Creating Shared Value and Meeting Our Commitment Report 2013 (‘the CSV Report’) published in hard copy and online PDF on the Nestlé website. The overall aim of this process is to provide reassurance to Nestlé’s stakeholders over the accuracy, reliability and objectivity of the reported information and that it covers the issues material to the business.

Scope of work

The assurance process was conducted in line with the requirements of the AA1000 Assurance Standard (2008) Type 2 assurance. The scope of work included a review of CSV activities and performance data over the reporting period January 1st to December 31st 2013. Specifically, this included the provision of assurance over:

  1. Statements, information and performance data contained within the CSV report; and
  2. Nestlé’s reporting against the Global Reporting Initiative (GRI) G3.1 Sustainability Reporting Guidelines and the Food Processing Sector Supplement, at the A+ application level.

We applied a moderate level of assurance to the engagement. Information and performance data subject to assurance is limited to the content of the CSV report.

Opinion and commentary

On the basis on the scope of the assurance engagement, nothing came to our attention to suggest that:

  • the account of Nestlé’s CSV activities and performance during 2013 and presented in the CSV Report is materially misstated;
  • Nestlé’s self-declared application level of A+ against the GRI G3.1 Guidelines is materially misstated;
  • Nestlé does not adhere to the principles of inclusivity, materiality and responsiveness as per the AA1000 Accountability Principles Standard 2008.

Any errors or misstatements identified during the engagement were corrected prior to the CSV Report being published.

For our detailed methodology which explains the work undertaken to inform our opinion, please see ‘Methodology’ below.

Positive Developments

We are pleased to observe progress in the following areas:

  • Nestlé’s ‘beyond compliance’ approach to tackling complex societal issues such as child labour in the cocoa supply chain and human rights contraventions in the value chain through local community participation and empowerment is commendable. Nestlé should consider how best to report publicly on the progress of its programmes whilst at the same time, respecting the on-going sensitivity of the issues being addressed.
  • It is acknowledged within the business that some CSV related issues cannot be addressed independently, and as a result there is an increasing emphasis on collective action on issues material to the business through the formalisation of a number of strategic and long term partnerships with civil society organisations.
  • During 2013, Nestlé renewed and strengthened a number of its CSV related policies including its Commitment on Water Stewardship and its nutrition policies. These policies are underpinned by a number of supporting commitments and key performance indicators (KPIs) that will enable the business to systematically measure performance over time and ultimately achievement of the policy objectives. Furthermore, the inclusion of these policies, commitments and KPIs in the CSV report demonstrates Nestle intention to be accountable to its stakeholders.
  • Nestlé’s CSV reporting this year provides greater disclosure on the challenges faced by the business in achieving its commitments, making it a more balanced report. Bureau Veritas encourages Nestlé to continue disclosing the contextual sustainability challenges in future reporting, but also the difficulties faced in implementing its frameworks, programmes and initiatives.

Key observations and recommendations for 2013

  • Reporting on the Rural Development pillar of CSV is still largely based on case studies where performance is measured and reported using KPIs that evaluate the reach and extent of a particular programme. Quantification of the direct impacts and benefits of its CSV activities still remains a challenge for the business. Nestlé should focus efforts on developing a methodology to measure the tangible impacts and benefits of its projects in line with stakeholder expectations.
  • Information on the governance of CSV issues is provided in each section of the report. Further information could be included in future reporting cycles to communicate to stakeholders how governance of these issues extends beyond the headquarters and into the markets and other entities such as Joint Ventures and newly acquired businesses.
  • Due to the size and complexity of the Nestlé business, some GRI performance indicators in the 2012 CSV Report were only partially reported due to systematically collect data. For these indicators, Nestle committed to improve the level of disclosure in the 2013 Report. Whilst Nestle has been able to demonstrate an improvement against indicators relating to H&S, environment, consumer health and grievances, collating data relating to local public policy and advocacy activities continues to be a challenge. To improve visibility over performance and to enable future reporting, Nestlé should enhance its internal reporting systems to allow for more comprehensive disclosure on the economic performance indicators.
  • Nestlé should conduct a review of its commitments in conjunction with the outcomes of the materiality assessment to ensure that all material issues which are considered to be of high concern to stakeholders and of high impact on Nestle are adequately represented by its commitments. Commitments related to the following issues of high materiality: food safety, food waste and business integrity, did not feature in this year’s report, although there is report commentary.
  • With an increasing portfolio of health focused businesses and products, issues such as patents and clinical trials are considered to be issues of increasing materiality for Nestle. It is recommended that Nestlé provides stakeholders with greater information on policy, governance and performance with respect to these issues.

Findings and conclusions concerning adherence to the AA1000 principles of Inclusivity, Materiality and Responsiveness and specified performance information.

Inclusivity – Stakeholder inclusivity is promoted and valued at all levels of the business. Nestlé continues to evaluate the effectiveness of engagement activities and recognises the need to better understand what engagement activities are being undertaken locally. The recent dissemination of engagement guidelines to its local markets will provide a common framework for local management teams to facilitate improved stakeholder mapping for more constructive dialogue at market level. Nestlé should accelerate the implementation of the community engagement guidelines that has been initiated by Nestlé Waters across all its factories.

Materiality –The identification of material issues and the capturing of material concerns of stakeholders for the purposes of CSV reporting is robust, and is undertaken on an annual basis. Stakeholder engagement activities at a corporate level were conducted earlier in the 2013 reporting cycle, providing sufficient time for the results to be incorporated into the materiality analysis to inform the content and the structure of the 2013 CSV reporting. Nestlé should consider how to systematically capture the outputs of the market level engagement activities for trend analysis and future issues identification. Furthermore Nestlé should consider how it can incorporate these outcomes into the materiality determination process.

Responsiveness - Nestlé remains responsive to stakeholder concerns, recently demonstrated by the launch of the Creating Shared Value and Meeting Our Commitments 2013 Report, an example of how stakeholders have shaped Nestlé strategy and reporting. Within the reporting year, stakeholders have highlighted some gaps in Nestle approach to managing key supply chain issues such as land grabbing and women’s rights. Whilst Nestlé is publically responding to these concerns and is accelerating activities in these areas to address them, it is recommended that Nestlé undertakes a systematic review of the governance and implementation of programmes around its material issues (identified in the materiality matrix) to proactively identify and address any remaining gaps.

Specified performance information – Nestlé continues to invest in new systems for improved data management and reporting and has successfully integrated a new safety health and environment system to enhance data reporting capabilities for CSV reporting. These systems enable on-going management of issues through monthly and quarterly internal reporting of performance. The collation of data for labour relations, human rights and nutrition education programmes still largely depends on manual year-end data collection processes, which increases the risk of potential errors in data collation and calculation due to the challenging year end reporting deadlines.

Methodology

We undertook the following activities to inform our assurance engagement:

  • interviewed personnel at various levels throughout the organisation at Nestlé’s head office in Vevey, Switzerland;
  • document reviews, data sampling and interrogation of supporting databases and associated reporting systems as they relate to selected content and performance data;
  • reviewed a selection of external media reports relating to Nestlé and the food sector to evaluate the coverage of topics within the CSV pages of the Nestlé website;
  • attended, as observers, the stakeholder convening held in London in March 2013;
  • reviewed the materiality analysis undertaken by Nestlé’s independent advisors and the outputs provided to Nestlé; and
  • evaluated Nestlé’s public disclosures against the GRI G3.1 Sustainability Reporting Guidelines. This included cross checking the content of the GRI index table and corresponding weblinks.

Exclusions and Limitations

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

  • Activities outside the defined reporting period or scope;
  • Company position statements (including any expression of opinion, belief, aspiration, expectation, aim or future intent);
  • Historic text which was unchanged from previous years and did not relate to ongoing activities;
  • Financial data taken from Nestlé’s Annual Report and Accounts 2013 which is audited by an external financial auditor;
  • Content of external websites or documents linked from within www.nestle.com/CSV pages; and,
  • Country or business unit specific CSV reports of other Nestlé entities or joint ventures.

This independent statement should not be relied upon to detect all errors, omissions or misstatements that may exist within the CSV report. The scope of our work was defined and agreed in consultation with Nestlé. Our work covers global operations and relies upon the collation of global information at Nestlé head office in Vevey, Switzerland.

Responsibilities of Nestlé SA and of the assurance provider

The preparation, presentation and content of the printed and online versions of the Nestlé in Society: Creating Shared Value and Meeting Our Commitment Report 2013 (‘the CSV report’) is the sole responsibility of Nestlé SA. The responsibility of Bureau Veritas is to provide independent assurance to stakeholders on the accuracy, reliability and objectivity of the information contained therein, and to express our overall opinion as per the scope of assurance engagement defined in this statement.

Bureau Veritas recognises the need for a robust, transparent assurance process to ensure credibility and to act as a tool to drive performance improvement in Nestlé’s CSV reporting and strategy. This is achieved by providing an impartial commentary on the reporting process and recommendations for further development in this assurance statement, and in an internal management report presented to Nestlé.

Statement of Bureau Veritas Independence, Impartiality and Competence

Bureau Veritas is an independent professional services company that specialises in quality, environmental, health, safety and social accountability with over 180 years of history in providing independent assurance services.

Bureau Veritas has implemented a Code of Ethics across its business which ensures that all our staff maintains high standards in their day to day business activities. We are particularly vigilant in the prevention of conflicts of interest. Bureau Veritas has a number of existing commercial contracts with Nestlé. Our assurance team does not have any involvement in any other projects with Nestlé outside those of an independent assurance scope and we do not consider there to be a conflict between the other services provided by Bureau Veritas and that of our assurance team.

Our assurance team completing the work for Nestlé has extensive knowledge of conducting assurance over environmental, social, health, safety and ethical information and systems, and through its combined experience in this field, an excellent understanding of good practice in corporate responsibility reporting and assurance.

London, March 2014



Notes:

Type 2 Assurance: An assurance engagement in which the assurance provider gives findings and conclusions on the principles of inclusivity, Materiality and Responsiveness and also verifies the reliability of specified reported sustainability performance information (AA10000AS (2008) Standard). For further information see www.accountability.org/standards/aa1000as/).

All relevant text was supported by interview evidence as a minimum, and supported by corroborating interview evidence or another source wherever possible. A moderate level of assurance is commensurate with "limited" assurance as defined in the ISAE3000.

Inclusivity is the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.

Materiality is determining the relevance and significance of an issue to an organisation and its stakeholders.

Responsiveness is the extent of an organisation's response to stakeholder issues and is realised through decisions, actions and communication with stakeholders.