Nestlé secures place in FTSE4Good index

Nov 24, 2011

Nestlé has maintained its place in the FTSE4Good index following its entry in March this year.

The company is the first and only infant formula manufacturer to achieve inclusion in FTSE4Good, FTSE’s responsible investment index.

The index is designed to help investors identify companies that meet globally recognised corporate responsibility standards.

Independent assessments

To achieve a place in the index, Nestlé first had to provide documentary evidence to
demonstrate that it had met the FTSE4Good Breast Milk Substitutes inclusion criteria.

Nestlé also had to demonstrate it had met the other FTSE4Good inclusion criteria, which cover areas such as the environment, human rights, and supply chain.

This evidence was assessed by EIRIS, an independent research firm and FTSE partner.

Nestlé then had to allow a third party, commissioned by FTSE, to undertake a series of independent assessments of its operations against the breast milk substitutes inclusion criteria.

The assessments were carried out by PricewaterhouseCoopers this summer at Nestlé’s headquarters in Switzerland, and at its operations in India and in Zambia.

Exchange of letters

On the basis of these assessments, the FTSE4Good Breast Milk Substitutes Marketing Committee has concluded that Nestlé is making “good and reasonable efforts” to implement the criteria in the two countries visited.

Mark Makepeace, Chief Executive of the FTSE Group, has written to Paul Bulcke, Nestlé’s Chief Executive Officer, confirming the company’s inclusion in FTSE4Good.

In the letter, he thanks Mr Bulcke for Nestlé’s “diligence and transparency” in working with FTSE and PricewaterhouseCoopers. He also identifies four areas for improvement.

These are: influencing third parties, activities that may be regarded as promotional, board reporting, and transparency and whistle blowing.

Continuing efforts to improve

Mr Bulcke has responded to thank Mr Makepeace for the opportunity to work with FTSE and its partners.

He acknowledges FTSE’s contribution in helping Nestlé in its “continuing efforts to improve” in the responsible marketing of breast milk substitutes.

FTSE is expecting to commission further assessments of Nestlé’s activities in two additional countries in 2012.

Related information:

The exchange of letters:

FTSE4Good website

FTSE4Good Breast Milk Substitutes inclusion criteria

FTSE4Good inclusion criteria

PricewaterhouseCoopers sustainability services

Nestlé Policy and Instructions for implementation of the WHO International Code of Marketing of Breast-milk Substitutes

FTSE4Good index

Other external assessments of Nestlé