We depend on biodiversity – the variability among living organisms, which includes the diversity at ecosystem, species and genetic levels – in many ways, but especially for the raw materials we source from farms, forests and the oceans. We are committed to managing our operations in a way that safeguards all natural capital, including forests, biodiversity and ecosystem services. We take a proactive role in tackling deforestation, and seek to identify Important Water Areas with high biodiversity value that our factories are adjacent to, so that we help safeguard these vital areas of biodiversity.

Preserving natural capital

Natural capital is the sum total of nature’s resources and services, and it is the basis upon which economic activity is built. We procure a large range of raw materials from farms and forests, and recognise our long-term success depends on the products and services provided by natural capital. We know agricultural and forestry practices are a major contributor to the loss of natural capital – particularly through the conversion of natural habitats, overuse of chemicals and water, and degradation of soil – so we aim to develop our business in a way that safeguards natural capital, and in particular biodiversity and ecosystem services.

In our Nestlé Commitment on Natural Capital, we explicitly commit to act as a responsible steward of natural capital; report on risks and responses; support consumers to make better-informed choices; and work with stakeholders.

Assessing our priorities

We are keen to develop a ‘balance sheet’ approach to natural capital. We recognise the need to safeguard biodiversity and ecosystem services at the same time as we rely upon them. A key element of this is to better understand how to value the consequences of our activities throughout the value chain, especially where we are only one actor among many in a landscape. As a first step, we have estimated the land area that Nestlé is dependent upon for the production of commodities that it uses: about twice the area of Switzerland.

We have also compiled a list of priority issues and dependencies, drawing from a wide range of research from organisations such as the International Union for Conservation of Nature (IUCN), FAO, the Convention on Biological Diversity (CBD), UNEP and the WWF. Understanding our dependencies on biodiversity in this way helps us decide where best to focus our activities:

Safeguarding natural capital
Ecosystem Issues Nestlé dependency Nestlé response
  • Deforestation; forest degradation
  • Packaging, paper, timber pallets, palm oil, soya
  • A comprehensive commitment to manage forests well and eliminate deforestation through programmes across the relevant commodities. Read more on deforestation.
  • Overfishing; acidification; warming; nutrients/dead zones; plastics
  • Seafood
  • Responsible Sourcing Guideline on seafood. Plastic recycling schemes. Good practices on fertiliser application through the Nescafé Plan. Read more on responsible sourcing.
Fresh water
  • Water scarcity/over-extraction; water pollution
  • Every stage of our value chain depends upon access to fresh water
  • A comprehensive set of commitments and key performance indicators on water across supply chains, factories and public policy. Read more on water.
  • Loss of high-value grasslands/biodiversity
  • Agriculture, grazing (milk, meat)
  • Application of the High Conservation Value approach to responsible land management and sourcing, plus restoration through silvopastoral programmes at dairy farm level.
  • Increasing temperature; pollutants; ozone layer depletion
  • Stable climate, reliable precipitation, temperature
  • Emission reduction initiatives in factories and use of natural refrigeration units. Read more on manufacturing.
  • Tackling deforestation/high-carbon soils, and facilitating dairy farmer investment in biogas digesters.
  • Soil loss and degradation; increasing salinity
  • All our agricultural crops rely upon soil with adequate structure and nutrients
  • Included as part of our Responsible Sourcing Guideline on palm oil, soya, sugar, plus UTZ certification of cocoa. Read more on responsible sourcing.

As detailed in the following pages, we believe we can have the greatest positive impact in three key areas:

  • Sourcing raw materials;
  • Improving our factories; and
  • Supporting public policy.
  • We continue to implement our Responsible Sourcing Guideline (RSG) in the supply chains of our 12 priority categories – palm oil; pulp and paper; soya; sugar; cocoa; coffee; dairy; vanilla; hazelnuts; shea; meat, poultry and eggs; and fish and seafood – and our work on the direct sourcing of milk and coffee in particular.

    The suppliers of these materials are already subject to our Corporate Business Principles and Supplier Code. But through the RSG, we are now incorporating performance requirements on the use and management of water and soil, the maintenance and enhancement of biodiversity, the elimination of deforestation and the identification and protection of High Conservation Value areas in the supply chains of 12 priority categories.

    We are aiming to have assessed 30% of the volume of these priority categories against our RSG, and for them to be compliant or have improvement plans ongoing, by 2015 (see Raw materials). Currently, 28% (2013: 9%) of the volume of our priority categories is Responsibly Sourced in accordance with our Responsible Sourcing Guideline requirements. Read more on Responsible sourcing.

    Watercourse protection

    We have produced detailed requirements for water use in agriculture that are now being used in our Responsible Sourcing Guideline to guide better water stewardship at the farm level. These requirements are based on the SAI Platform’s water guidelines, but also include current thinking from the major agricultural commodity certification schemes and the Alliance for Water Stewardship standard.

    Raw materials and deforestation

    The destruction of tropical rainforests and associated peatlands adds to biodiversity loss and is contributing to social and land conflicts. We’re committed to ensuring that the raw and packaging materials we source have not led to deforestation.

    We have taken a proactive role in tackling deforestation, particularly in the responsible sourcing of palm oil, through our work to drive traceability, our work directly with suppliers and our support for the goal of the Consumer Goods Forum (CGF) to mobilise resources within our respective businesses to help achieve zero net deforestation by 2020. We also assisted the CGF in setting up the Tropical Forest Alliance 2020, a public–private partnership between the CGF and the governments of the USA, United Kingdom, Norway and the Netherlands that aims to reduce tropical deforestation associated with key global commodities.

    Nestlé has also backed the New York Declaration on Forests, whose vision is to halt and reverse the loss of forests, and participated in various conferences and events to raise awareness, seek solutions and develop collaborative efforts across different sectors to tackle deforestation in key locations such as Africa, South East Asia and Latin America.

    In our own Commitment on Deforestation and Forest Stewardship, we pledge that our products will not be associated with deforestation. This covers all the raw materials we use to make our products, and also packaging. Our Responsible Sourcing Guideline Framework for Forest-Based Materials has been developed to help procurement staff and suppliers implement our commitment.

    Three categories of raw material are central to our ‘no deforestation’ commitment, as they are considered to have the highest impact on deforestation and forest stewardship: palm oil, soya, and pulp and paper. Our approach to the challenge remains the same for all three: to work with suppliers and partners to map our supply chains back to the origin, then assess and develop our suppliers against our Responsible Sourcing Guideline. Other commodities including meat and dairy products, cocoa, coffee and cassava are also problematic in some places, and are being tackled accordingly country by country.

    In addition, in our Commitment on Biofuels, we raise awareness of the risks to forests, water and food supplies resulting from conversion to growing biofuel crops.

    Improving biodiversity through direct sourcing

    For our Farmer Connect activities, sourcing milk and coffee from more than half a million farmers, we take a more hands-on approach to assessing impacts and influencing behaviours to protect biodiversity at the farm level:


    • Our 2010 survey of factories revealed that our dairy factories and the surrounding milk districts are often close to protected areas and areas of high biodiversity. This is applicable to operations in Brazil, China, Ecuador, Nicaragua, Peru, the Philippines and South Africa. Using RISE, our assessment and action planning tool, we are working with dairy farmers to review their methods and develop action plans for economic, social and environmental improvements. RISE studies have been completed on 92 farms in eight countries to date.


    • Biodiversity issues are managed primarily through the 4C Coffee Code, the Nespresso AAA Sustainability Quality™ Program and the Nescafé Plan, which, in partnership with Rainforest Action Network, has developed better farming practices. These initiatives include safeguards against sourcing from protected areas, restrictions on pesticide use, soil conservation and watercourse protection.

    Improving biodiversity through silvopasture

    Silvopasture is the practice of combining forestry and grazing of domesticated animals in a mutually beneficial way. The advantages of a properly managed silvopasture system are enhanced soil protection and increased long-term income resulting from the simultaneous production of trees and grazing animals.

    We continue to help farmers implement silvopastoral systems, planting different species of trees, hedges and shrubs on the pasture land to improve biodiversity and yields. Nestlé Nicaragua has recently helped 10 pilot farms implement silvopastoral systems.

  • All factories operate according to our Nestlé Environmental Management System, and 621 of all Nestlé sites are certified to the ISO 14001:2004 standard (2013: 601). This gives us a solid foundation for developing initiatives with local authorities and other stakeholders to manage our operations, improve performance and enhance biodiversity where our factories are located in legally protected areas and Important Water Areas.

    We have developed our understanding of the relationship between our factories and the biodiversity around them, focusing on the inter-relationship between water and biodiversity, and identified those factories where we have either a dependency, or a potential impact, on Important Water Areas. We continue to identify improvement programmes at those factories adjacent to Important Water Areas and will report on progress next year.

    To find out which of our factories were in areas of high biodiversity or protected areas, we embarked on a project with the UNEP World Conservation Monitoring Centre in 2013. The resulting database highlights 53 factories where high biodiversity risk has been identified and where we will focus our future actions to safeguard the natural environments that we depend on.

    We have planted wildflower meadows at five UK sites to develop natural habitats and increase biodiversity, and plan to have them at all 13 of our UK factories by 2015. The meadows are designed to attract a variety of wildlife, including pollinators such as butterflies, bees and birds that are integral to the food supply chain.

    Meanwhile, the My Tree Community saw employees at our Kejayan factory in Indonesia purchase and plant more than 1 000 locally sourced trees on factory premises and in the surrounding community in 2013, and 1 000 more in 2014.

  • Nestlé is a signatory to the Natural Capital Leadership Compact, launched by the Cambridge Institute for Sustainability Leadership (CISL) in 2012.

    We also continue to be an active member of the Cambridge Natural Capital Leaders Platform, a major business-led programme focusing on practical evidence, action and policy influence. The cross-sectoral platform addresses the impacts of ecosystems and natural capital loss and degradation on businesses, their customers and wider society.

    During 2014, we continued our membership of the Platform, helping guide the development of the next three-year phase of that work.

    We are also participants in two consortia developing a Natural Capital Protocol and on the board of the WBCSD’s Redefining Value work programme.

Related content


UN Convention on Biological Diversity definition.

Water-related areas of a catchment that are legally protected or under a conservation agreement which, if impaired or lost, could adversely impact the environmental, social, cultural or economic benefits derived from the catchment in a significant or disproportionate manner.

Formerly the Cambridge Programme for Sustainability Leadership (CPSL).