Bureau Veritas’ Independent Assurance Statement


To: The Stakeholders of Nestlé SA

Introduction and objectives of the engagement

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Bureau Veritas has been engaged by Nestlé SA (Nestlé) to provide independent assurance over the Nestlé in society: Creating Shared Value and Meeting Our Commitments 2015 report (the CSV Report) published online in 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 2015. Specifically, this included:

  1. Statements, information and performance data contained within the CSV report;
  2. Nestlé’s management approach of material issues; and
  3. Nestlé’s reported data and information as per 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.

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 2015 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.

Positive developments

We are pleased to observe progress in the following areas:

  • As investment into CSV-related projects continue to be the driver for performance improvements in a number of CSV areas, Nestlé has made progress with the governance of such projects by incorporating investment decisions into its Capital Expenditure process, particularly in the area of Environmental Sustainability.
  • While some of Nestlé’s commitments came to an end in 2015, Nestlé has demonstrated continued focus on its material CSV issues by establishing new commitments that challenge its performance going forward.
  • It is positive to observe that the Nestlé Nutrition Institute (NNI) maintains a high degree of independence in its policies and underlying systems from Nestlé’s business priorities and focus. As the NNI is moving towards publishing more practical material, this is essential in maintaining its reputation as a credible research body.
  • Nestlé has rolled out an updated Responsible Marketing to Children policy which aligns with the EU Pledge criteria, committing to a consistent global approach that ensures minimum performance levels across markets.

Key recommendations for 2016

  • As per our recommendation in the 2014 CSV report, Nestlé should consider communicating more information to stakeholders on how governance over material issues extends beyond the corporate entity to the end markets, and also to other entities such as Joint Ventures and newly acquired businesses.
  • Reporting on Responsible Sourcing and Traceability figures within the CSV report still lags by one year. In addition, reported figures do not cover all of Nestlé businesses3, and are reliant on estimations and manual consolidation of data. Nestlé should therefore consider reviewing its internal reporting process and tools for responsible sourcing to produce more timely and accurate data that aligns with the CSV reporting period. In addition, Nestlé should ensure that reporting on the 12 priority categories is consistent; covering all businesses included within the scope of reporting.
  • 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 and wellness, continues to increase.
  • As per previous years, Nestlé’s reporting on employee data covers approximately 84% of its employees (which represent those covered by its central reporting system). Nestlé should therefore consider consolidating its reporting systems to ensure the completeness of reporting on its employee data globally, and that CSV reporting is representative of its entire workforce.
  • With Nestlé’s ‘Tell Us’ grievance mechanism Nestlé should consider its communication channels and the accessibility of the ‘Tell Us’ system, particularly for stakeholders in its upstream supply chain.
  • Reporting on impacts of global initiatives could be standardised across markets and strengthened at the centre level. This is to ensure consistent data collection, collation and reporting across markets and operations

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

Inclusivity4 – 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. In 2015 this has been further extended by engaging with specific stakeholders on key issues and focus areas throughout the proceedings of the convenings. At the local level, there remains scope for Nestlé to improve its active engagement with local stakeholders – as opposed to global stakeholder group representation – to capture issues and feedback at this level.

Materiality5 – Nestlé has used the same materiality determination process which was used in 2014, as it was deemed to continue to be appropriate and relevant to the business. We believe that this process continues to be relevant and is therefore representative of Nestlé’s material issues in 2015.

As per our commentary in 2014, Nestlé should ensure that topics and aspects related to its evolving business model towards nutrition, health and wellness are captured in its process. Also, 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.

Responsiveness6 – Nestlé remains responsive to stakeholder concerns through its CSV report and continues to disclose the key recommendations made by stakeholders during the annual stakeholder convenings. 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, Transport, both of which currently lag the overall reporting period (2013 data reported in 2014). In addition, market-level reporting on the impact of global initiatives and programmes could be strengthened to ensure consistency and accuracy.

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;
  • 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 a selection of market case studies featured within the CSV report;
  • Reviewed the outcomes of Nestlé’s stakeholder engagement activities in 2015; and
  • Evaluated Nestlé’s public disclosures against the GRI G4 Sustainability Reporting Guidelines.

Exclusions and limitations

Excluded from the scope of our work is the following:

  • Data related to responsible sourcing and traceability of dairy ingredients, data related to responsible sourcing of hazelnuts, and data related to percentage of purchased palm oil that is RSPO certified;
  • Data related to number of violations involving rights of indigenous people, suppliers with significant risks of forced and compulsory labor, and suppliers who have undergone human rights screening;
  • Data related to Nestlé Professional product sales and penetration;
  • Information related 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 2015 which is audited by an external financial auditor;
  • Content of external websites or documents linked from within www.nestlé.com/CSV pages; and
  • Country or business unit specific CSV reports of other Nestlé entities or joint ventures.

This assurance statement is subject to the following limitations:

  • This assurance engagement does not constitute verification of Zero Waste to Landfill for the locations where Nestlé reported that this has been achieved;
  • 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; and
  • 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 2015 (‘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 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.



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 ISAE3000 (2003, rev2008) assurance standard.
  3. Businesses not covered by the scope of responsible sourcing and traceability data include Nestlé Nutrition, Nestlé Skin Health, and Nestlé Health Science.
  4. Inclusivity is the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.
  5. Materiality is determining the relevance and significance of an issue to an organisation and its stakeholders.
  6. Responsiveness is the extent of an organisation’s response to stakeholder issues and is realised through decisions, actions and communication with stakeholders.