To: The Stakeholders of Nestlé S.A.
Introduction and objectives of the engagement
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 2014 (the CSV Report) published in hard copy and online PDF on the Nestlé website. The 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. 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 work included a review of CSV activities and performance data over the reporting period January 1st to December 31st 2014. Specifically, this included:
- Statements, information and performance data contained within the CSV report;
- Nestlé’s process for determining material aspects for reporting and the management approach to material issues; and
- Nestlé’s reported data and information as per the requirements of the Global Reporting Initiative (GRI) G4 Sustainability Reporting Guidelines, as indicated in the GRI index.
The assurance process was conducted in line with the requirements of the AA1000 Assurance Standard (2008) Type 2 assurance. We applied a moderate level of assurance.
Opinion and commentary
On the basis of the scope of work, nothing came to our attention to suggest that:
- the account of Nestlé’s CSV activities and performance during 2014 and presented in the CSV Report 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.
We are pleased to observe progress in the following areas:
- The roll out of the Rural Development Framework as a pilot in three countries demonstrates Nestlé’s commitment to addressing the challenges faced by rural communities that produce the essential commodities which the business relies upon.
- Nestlé continued its emphasis on collective action as key to addressing some of the most pertinent CSV issues by engaging in multi-sector and sector-specific platforms. Nestlé is sharing learning and experiences with other businesses which demonstrates a desire to achieve tangible positive results across the sector.
- Nestlé’s Nespresso has undertaken a review of the AAA program 10 years after it commenced to test the impacts of its rural development focus to contribute to formulating its ongoing strategy. This is good considered practice validation and assessment of its management approach.
- Nestlé has elaborated on the results of its annual materiality analysis and has commissioned an independent study to evaluate the commercial relevance of its material issues.
- Nestlé has made progress with the accountability of its commitments this year at both the functional and Executive Board level. Also, formal systems for tracking performance against each commitment are established.
Key observations and recommendations for 2014
- 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 outputs of the programme. Measuring the impacts of CSV activities still remains a challenge and Nestlé should focus on developing a methodology to quantify the tangible benefits of its projects.
- Some information on the governance of material CSV issues is provided in each relevant section of the report. Nestlé should consider reporting the key topics and outcomes of its external advisory groups such as the CSV Council and the Nestlé Nutrition Council, or include external commentary from the council members in the report to communicate on emerging CSV issues
- Additionally, further information could be communicated to stakeholders on how governance over these issues extends beyond the corporate entity to the end markets, and also to other entities such as Joint Ventures and newly acquired businesses.
- Nestlé made three new commitments for this reporting period in relation to marketing to children, business integrity and compliance. Whilst this has closed a gap between the outcomes of the materiality process and the development of commitments, Nestlé should ensure that all material issues of high concern to stakeholders and of high impact upon the business are adequately represented by its commitments.
- With the relevant high materiality status assigned to traceability and responsible sourcing, Nestlé should consider reviewing its internal reporting for responsible sourcing to produce more timely data that aligns with the CSV reporting period. In addition, Nestlé should consider enhancing the reporting process to reduce reliance on estimations as much as possible.
- There is a significant focus on research and innovation which will ultimately provide the products that will drive Nestlé’s business model from food and beverage to nutrition, health & wellness. Nestlé should consider including more detail of these research and innovation activities in its reporting. This could include associated emerging issues such as patents, animal testing and clinical trials.
Findings and conclusions concerning adherence to the AA1000 principles of Inclusivity, Materiality and Responsiveness, and specified performance information
Inclusivity – 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. At a local level, Nestlé Waters is leading the way with the roll out of its community engagement programme as part of its water stewardship approach. Overall, there is scope for Nestlé to improve its active engagement with consumers on CSV issues, as this important stakeholder group is currently under-represented. Nestlé should also consider direct engagement with local stakeholders – as opposed to global stakeholder group representation – to capture issues and feedback at this level.
Materiality – Nestlé has further strengthened its materiality determination process this year, to enable better disclosure of the level of impact of each material issue along the value chain, and has subsequently commissioned an independent study to quantify the relevant economic impact of these issues in terms of revenue, cost structure and reputation. As the business model evolves towards nutrition, health and wellness, some new relevant topics, and potentially material aspects, will emerge. Nestlé should ensure that such topics and aspects are captured in its process.
In the prioritisation of material issues, Nestlé should consider incorporating regulations and compliance requirements in the materiality scoring criteria for aspects that require continuous monitoring, robust management and regulatory reporting.
Responsiveness – Nestlé remains responsive to stakeholder concerns through its CSV report and it is encouraging to see that the key recommendations made by stakeholders during the annual stakeholder convenings are disclosed. It is recommended that Nestlé also reports its response to key stakeholder concerns and issues raised to indicate the actions that will be taken to address them.
Specified performance information – As with previous reporting cycles, Nestlé has continued to produce reliable data for its reporting on Safety, Health and Environment (SHE) through its internal data capture and reporting system. SHE data is well managed owing to a high degree of control at a global level with appropriate checks to ensure consistency and veracity. Attention should be given to improving the data collection process for other key performance data sets such as Responsible Sourcing and Transport, both of which currently lag the overall reporting period (2013 data reported in 2014).
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;
- conducted 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;
- reviewed the outcomes of Nestlé’s stakeholder engagement activities in 2014;
- 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 G4 Sustainability Reporting Guidelines.
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 2014 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 2014 (‘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 recognizes 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 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 specializes 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.
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 AA1000 Assurance Standard (2008)
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 (2003, rev2008) assurance standard.
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.