To: The Stakeholders of Nestlé S.A
Introduction and objectives of work
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 (‘the CSV report’) published on the Nestlé website [www.nestle.com/CSV]. 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 21 assurance. The scope of work included a review of CSV activities and performance data over the reporting period January 1st to December 31st 2012. Specifically, this included the provision of assurance over:
- Statements, information and performance data contained within the CSV report; and
- Nestlé’s reporting against the Global Reporting Initiative (GRI) G3.1 Sustainability Reporting Guidelines, at the A+ application level.
We applied a moderate2 level of assurance to the engagement. Information and performance data subject to assurance is limited to the content of the CSV report and the provision of this information on Nestlé’s website as at April 2013. Content contained within the Nestlé in Society: Creating Shared Value and Meeting Our Commitments Summary Report was not assured.
Opinion and commentary
In our opinion, the content of the CSV report provides an accurate and objective account of Nestlé’s performance on material issues during the reporting period.
Errors or misstatements identified during the engagement were corrected prior to the report being published. On this basis, the reported information is considered to be reliable and free from material misstatement. It is our opinion that the CSV report:
- adequately represents the material issues of the business;
- provides a reliable account of CSV related information and performance activities during 2012;
- meets the GRI 3.1 requirements for the A+ application level; and
- adheres to the principles of inclusivity, materiality and responsiveness as outlined in the AA1000 Accountability Principles Standard 2008.
For our detailed methodology which explains the work undertaken to inform our opinion, please see ‘Methodology’ below.
We are pleased to observe progress in the following areas:
- The inclusion of the forward-looking commitments within the report provides a clear mechanism for external stakeholders to measure Nestlé’s future CSV performance, and demonstrates Nestlé’s on-going commitment to being held accountable for its actions.
- The materiality assessment process has been further refined and integrated within the business.
- There is an increasing emphasis on engagement and dialogue with external stakeholder groups through, for example, the CSV convenings, and the formalisation of a number of partnerships with civil society organisations (e.g. Fair Labor Association).
- The content and presentation of information contained within the report has been further developed to provide a more consistent approach to reporting on CSV issues, making it easier for external stakeholders to understand the issue, why its important to Nestlé, performance trends and future challenges.
- The implementation of new Global HS&E reporting system and improvements across many operational CSV aspects (including energy, water and waste reductions within Nestlé’s operations) should be commended.
Key observations and recommendations for 2012
- Nestlé continues to produce a comprehensive report covering its material social, ethical and environmental issues (and their management) across a diverse product and organisational footprint. However, for some CSV issues (for example, local community investment, farmer support, supply chain human rights) the current information systems do not provide detailed quantitative and qualitative data across all markets and for all activities. Nestlé should ensure that comprehensive and robust data collection and internal checking processes are in place for all its material CSV issues / impacts, forward commitments and GRI disclosures.
- Investments, Joint Ventures (JV’s) and commercial acquisitions continue to play an integral part in Nestlé’s growth and long term strategy. Each of these agreements have unique CSV related issues and challenges - for example, the nutritional profile of a new product, operational control of the entity, integration process, etc. Nestlé should ensure that relevant CSV aspects associated with its major investments, JV’s and acquisitions are identified, and that (where relevant) this information is disclosed externally in a timely manner.
- As Nestlé continues to further expand its portfolio of health and wellness products into areas such as chronic diseases - traditionally addressed by pharmaceutical products - it will become increasingly subject to ‘pharma’ related issues such as managing animal welfare, human clinical trials, sales and marketing. Nestlé should consider providing more information on the internal processes for the management of these issues in future reporting.
- Nestlé should be commended on the progress it has made to formalise it approach to address key agricultural supply chain impacts (through, for example, the implementation of Rural Development Framework and Responsible Sourcing Guidelines for key commodities). Future CSV reports should include information on the progress and lessons learned from these programmes, as well as emerging issues at the farmer level such as climate change impacts, resource grabbing and micro finance.
- Water (as well as biodiversity and natural capital management) continues to be of paramount importance for Nestlé’s continued success. Whilst Nestlé should be commended on the reductions in water use within its own operations, and the work undertaken to raise the issue of water scarcity at a global level, further understanding and information is needed on the impacts of Nestlé’s activities at the local watershed level, and water use down its supply chain.
Findings and conclusions concerning adherence relating to the AA1000 principles of Inclusivity, Materiality and Responsiveness and specified performance information.
Inclusivity3 – Nestlé engages with a range of key stakeholders including government officials, intergovernmental organisations, NGOs, charities and industry associations and has undertaken a number of formal stakeholder engagements in 2012. The output from these activities continues to inform Nestlé’s CSV strategy and reporting, and internal risk management process. The extension of the stakeholder engagement programme to include more input from the local communities in which Nestlé operates would further improve Nestlé’s understanding of its local CSV issues and impacts.
Materiality4 – The identification of material issues and the capturing of material concerns of stakeholders for the purposes of CSV reporting is robust, and continues to be undertaken on an annual basis. For 2012, the materiality determination process has been further refined to include long-term social, environmental and political trends; and the outputs of this process were further disseminated across the business. Future updates to the materiality assessment process should occur earlier in the reporting cycle, and include the timely output from any formal stakeholder engagements.
Responsiveness5 - Nestlé continues to improve its responsiveness to reporting on material issues, as demonstrated via the expansion of the report content in 2012. Further, the report also includes more detail on issues of concern highlighted by certain external stakeholder groups – for example, child labour in the cocoa supply chain. Nestlé should consider reviewing the different mechanisms (i.e. web, CSV report, social media, etc.) by which it can communicate and respond to its external stakeholders concerns.
We undertook the following activities to inform our assurance engagement:
- interviewed 60 personnel at various levels throughout the organisation. The majority of interviews were conducted 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 October 2012. Prior to attendance we also met with the convening facilitators to review the methodology for the selection of participants;
- reviewed the materiality analysis undertaken by Nestlé’s independent advisors and the outputs provided to Nestlé; and
- evaluated Nestlé’s public disclosures against the G3.1 Sustainability Reporting Guidelines. This included cross checking the content of the GRI index table against 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 which is taken from Nestlé’s Annual Report and Accounts, 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 CSR report. The scope of our work was defined and agreed in consultation with Nestlé. Our work covers global operations and relies upon the accurate collation of global information at Nestlé head office in Vevey, Switzerland.
The preparation, presentation and content of the Nestlé in Society: Creating Shared Value and Meeting Our Commitment report (‘the CSV report’) is the sole responsibility of Nestlé. 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 history in providing independent assurance services, and an annual turnover in 2011 of €3.35 billion euros.
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. The work has been led and reviewed by lead assurers.
London, March 2013
1 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 (AA1000AS (2008) Standard). For further information see www.accountability.org/standards/aa1000as.html
2 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 assurance standard.
3 Inclusivity is the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.
4 Materiality is determining the relevance and significance of an issue to an organisation and its stakeholders.
5 Responsiveness is the extent of an organisation’s response to stakeholder issues and is realised through decisions, actions and communication with stakeholders.