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 Commitments Report 2016 (‘the CSV Report’) published on the Nestlé website (www.nestlé.com/CSV). The aim of this process is to provide assurance to Nestlé’s stakeholders over the accuracy, reliability and objectivity of the reported information and that it covers the issues material to the business and its stakeholders. The CSV Report has been self-declared to comply with the ‘in accordance - comprehensive’ requirements of the GRI G4 Guidelines.

Scope of work

The scope of our work was limited to assurance over performance data and information included in the CSV Report for the reporting period January 1, 2016 to December 31, 2016 (the ‘Selected Information’). Subject to the limitations and exclusions listed in the next section, our review included:

  1. statements, information and performance data contained within the CSV Report;
  2. Nestlé’s management approach of material issues; and
  3. alignment of the reported data and information to the requirements of the Global Reporting Initiative (GRI) G4 Sustainability Reporting Guidelines.

The assurance process was conducted in line with the requirements of the AA1000 Assurance Standard (2008) Type 21 assurance. We applied a moderate2 level of assurance.

Limitations and exclusions

Excluded from the scope of our work is the following:

  • Company position statements (including any expression of opinion, belief, aspiration, expectation, aim or future intent);
  • Information related to activities outside the defined reporting period or scope;
  • All data and information reported by markets as part of the Sustainable Agricultural Initiative at Nestlé;
  • Data related to the number of suppliers and downstream business partners who have been appraised and informed about the Tell Us system;
  • Data related to responsible sourcing and traceability of meat, poultry and eggs;
  • Data related to number of water units/structures developed for communities in India and Pakistan;
  • Data related to the healthy aging study, ketogenic clinical trials and Project Crown;
  • 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 2016 which is audited by an external financial auditor, including but not limited to any statements relating to tax, sales, and financial investments;
  • Content of external websites or documents linked from the CSV Report and www.nestlé.com/CSV pages; and
  • Country or business unit specific CSV Reports of other Nestlé entities or joint ventures.

This moderate level assurance engagement relies on a risk based selected sample of the selected information and the associated limitations that this entails. Our work was limited to head office based activities and understanding how Nestlé consolidates and reconciles data provided by local markets/countries. The reliability of the reported data is dependent on the accuracy of data collection and monitoring arrangements at market/site level, not addresses as part of this assurance.

This independent statement should not be relied upon to detect all errors, omissions or misstatements that may exist.

This assurance engagement does not constitute verification of Zero Waste to Landfill for the locations where Nestlé reported that this has been achieved.

Responsibilities

The preparation and presentation of the Selected Information in the CSV Report are the sole responsibility of the management of Nestlé.

Bureau Veritas was not involved in the drafting of the CSV Report. Our responsibilities were to:

  • provide moderate level assurance over the accuracy, reliability and objectivity of the information contained within the CSV Report;
  • form an independent conclusion based on the assurance procedures performed and evidence obtained; and
  • report our detailed conclusions and recommendations in an internal letter to management.

Methodology followed and summary of work performed

As part of our independent assurance, our work included:

  • Conducting interviews with relevant personnel at various levels throughout the organisation at Nestlé’s head office in Vevey, Switzerland and via teleconference;
  • Reviewing the internal systems, processes and controls to collect and report the Selected Information, including assessing the appropriateness of assumptions made, estimations techniques used and reporting boundaries;
  • Agreeing a selection of the Selected Information to the corresponding source documentation;
  • Reviewing a selection of market case studies featured within the CSV Report against corresponding source documentation;
  • Performing analytical procedures of the Selected Information;
  • Confirming where relevant the accuracy of information with third parties and/or external stakeholders;
  • Reviewing the outcomes of Nestlé’s materiality analysis and stakeholder engagement activities in 2016;
  • Assessing the disclosure and presentation of the Selected Information to ensure consistency with assured information; and
  • Evaluating Nestlé’s public disclosures against the GRI G4 Sustainability Reporting Guidelines.

Conclusion

On the basis of the scope of work, nothing came to our attention to suggest that:

  • the Selected information is not fairly stated in all material aspects;
  • 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.

Observations of good practice and positive developments

We are pleased to observe progress and good practices in the following areas during 2016:

  • as some of Nestlé’s commitments came to an end in 2016, Nestlé has demonstrated continued focus on its material CSV issues by setting new targets;
  • Nestlé also reinforced its long term commitments by incorporating the Sustainable Development Goals into its reporting for the first time;
  • the CT-NHW team at head office conducts thorough checks of the reductions being achieved at market level in the salt, sugar, and fat content of products;
  • Nestlé recently launched a Diversity and Inclusion Framework, adopting a more integrated approach which covers all diversity topics under a single framework and recognises the significance of diversity along the value chain, including employees, consumers and supply chain;
  • we noted a drive from various functions for more centrally integrated reporting systems to ensure greater coverage globally and better visibility of markets and Nestlé businesses;
  • during 2016, there was a significant increase in the number of product test results recorded in the global quality management system rather than only in locally managed systems;
  • the CT-NHW team have been working towards 100% coverage of all the ingredients and recipes for its products globally in the centrally managed recipe management systems for 2017;
  • Nestlé has put a plan in place to upgrade its Human Resources systems by 2020 to achieve completeness of reporting by including its entire workforce (reporting currently covers only 82.5% of employees); and
  • as with previous reporting cycles, Nestlé has continued to produce reliable data for its reporting on Safety, Health and Environment through its internal data capture and reporting system.

Key recommendations for 2017

  • To increase transparency behind the calculations of the reported performance data, Nestlé should publish a separate reporting criteria document alongside its annual CSV Report, outlining key definitions, reporting boundaries, baseline years, and calculations methodologies, including any exclusions and assumptions. In addition, we recommend that each content owner creates an internal procedure document to explain in details the data collection and aggregation processes. This will help to ensure that the data is collected in a consistent way in case of personnel changes or absences.
  • Our work identified data entry errors which were corrected. To ensure accuracy of each key performance indicator in the future, we recommend strengthening and formally documenting the internal review process. This review should be conducted for each indicator at market and/or head office level by someone who is independent from the data gathering process and should include checking the accuracy of calculations, identifying data gaps or abnormal data points and comparing the data to prior years.
  • Data owners should ensure that there is a clear, documented link between data sources and the data being reported. For example, the documentation of the data sources, estimation techniques and assumptions used to generate the responsible sourcing data should be improved. Also, a number of activities are carried out at market level as part of the Sustainable Agriculture Initiative at Nestlé. The outcomes of these activities are pulled together into numerous case studies for head office. It is recommended that more robust evidence of these activities is collected from the markets by head office to support the information being reported.
  • As per our recommendation in the 2015 CSV Report, reporting on responsible sourcing and transport figures within the CSV Report continues to lag the overall reporting period by one year. Nestlé therefore should review its internal data gathering processes to produce more timely data.
  • Nestlé has in place a comprehensive global system to record training delivered. However, some training activities are recorded separately and manually added at year end to the total figures. We recommend that Nestlé records all of its training data into one central system.

Findings and conclusions concerning adherence to the AA1000 principles of Inclusivity, Materiality and Responsiveness:

Inclusivity3 – At the global level, Nestlé’s on-going programme of stakeholder convenings involving NGOs, government, academia and investors, continues to provide the business with valuable stakeholder insight on its CSV strategy and activities. Beyond this, the materiality analysis incorporates a review of stakeholders’ interests.

Materiality4 – Nestlé has conducted a new materiality analysis in 2016 which included an assessment of stakeholders’ interest and the corresponding Nestlé business impact. This year the issues were also mapped against the Sustainable Development Goals. A number of new issues were identified, merged with others or have gone up in the prioritisation rankings.

We believe that this updated materiality process is appropriate and relevant to the business in 2016.

Responsiveness5 – Nestlé remains responsive to stakeholder concerns through the publication of its annual CSV Report. In addition, this year Nestlé has published in the CSV Report the full list of stakeholders’ recommendations from the 2016 Stakeholder Convening in Geneva and its responses.

Statement of Independence, Impartiality and Competence

Bureau Veritas is an independent professional services company that specialises in quality, environmental, health, safety and social accountability with over 185 years history. Its assurance team has extensive experience in conducting verification over environmental, social, ethical and health and safety information, systems and processes.

Bureau Veritas operates a certified6 Quality Management System which complies with the requirements of ISO 9001:2008, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

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 other projects with Nestlé that would cause a conflict of interest.

London, April 2017



Notes:

  1. Type 2 Assurance: an engagement in which the assurance provider gives findings and conclusions on the principles of Inclusivity, Materiality and Responsiveness and verifies the reliability of specified sustainability performance information (AA1000AS (2008) Standard). For further information see www.accountability.org/standards/aa1000as/
  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 International Standard on Assurance Engagements 3000 (Revised) – Effective for assurance engagement dated on or after December 15, 2015.
  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.
  6. Certificate of Registration FS 34143 issued by BSI Assurance UK Limited