Our commitment: Implement responsible sourcing in our supply chain and promote animal welfare
Consumers and stakeholders increasingly want to know what is in their food, where it comes from and how it is made. Responsible sourcing – the sourcing of raw materials in compliance with our Responsible Sourcing Guideline, with the aim of achieving transparency and traceability throughout our supply chains – provides that information. It is therefore an essential part of ensuring a sustainable future for our business, and for the farmers and producers on whom we depend for our ingredients. Our work towards ensuring raw materials are traceable back to place of origin and responsibly sourced focuses on 12 priority categories. These are the raw ingredients we source in the largest quantities or which are most important for our business. They are: cereals; cocoa; coffee; dairy; fish and seafood; hazelnuts; meat, poultry and eggs; palm oil; pulp and paper; soya; sugar; and vanilla. Cereals was a new addition to this list in 2016, replacing shea, based on the volumes we source and its importance to our product portfolio and our consumers.
Responsibly sourced: where places of ingredients’ origin are assessed against our Responsible Sourcing Guideline requirements and found to be compliant, or corrective action plans are developed (or equivalent standards implemented).
Traceable: where ingredients we buy are identified back to their place of origin, such as mill, farm, plantation or fishery.
Watch our video to find out more about responsible sourcing at Nestlé.
Our objectives in 2016
By 2016: For Tier 1 suppliers, cover 50% of the total volume sourced from audited and compliant suppliers.
By 2016: For upstream, 50% of the volume of our 12 priority categories to be traceable, 40% to be Responsibly Sourced.
Our progress to date
We exceeded our targets, with 61% of total volume sourced from suppliers compliant with the Nestlé Supplier Code (SMETA and Ecovadis audited), 51% of raw ingredients in our priority categories being traceable and 44% Responsibly Sourced, although progress varies across categories due to individual circumstances in each supply chain. In 2016, we introduced cereals as a priority category, because of the high volume we purchase and its importance to our consumers and overall product portfolio. Assessments began within the cereals supply chain, with initial results due in 2017.
Our objectives towards 2020
By 2017: For Tier 1 suppliers, cover 60% of the total volume sourced from audited and compliant suppliers.
By 2017: For upstream, 60% of the volume of our priority categories to be traceable, 50% to be Responsibly Sourced.
By 2020: For Tier 1 suppliers, cover 80% of the total volume sourced from audited and compliant suppliers.
By 2020: For upstream, 80% of the volume of our priority categories to be traceable, 70% to be Responsibly Sourced.
Tier 1 supplier audits
Nestlé’s auditing of Tier 1 suppliers began in 2010. The purpose of the audits is to verify how a material or service is produced and to drive our direct suppliers’ continuous progress towards full compliance with our Supplier Code. All new suppliers are screened when entering into a business relationship with Nestlé, and signing the code is an integral part of our mandatory vendor approval process.
Suppliers are required to arrange and host an ethical audit to show they are adhering to national and international laws and standards, and the minimum standards set out in our Supplier Code. These take place across all categories (raw, packaged, etc.) globally.
Audits are carried out by approved independent verification firms, using either the Sedex Members Ethical Trade Audit (SMETA) 4 Pillars guideline (pdf, 839Kb) for most of the production facilities or the EcoVadis methodology for certain services suppliers. The topics assessed reflect best practice in labour standards, health and safety, the environment and business ethics.
Our auditing programme aims to guide our Tier 1 suppliers towards full compliance with the Nestlé Supplier Code, identifying areas where compliance is not yet achieved.
Updating our Responsible Sourcing Policies
Given progress in accelerating the implementation Responsible Sourcing on the ground, we acknowledge the need to streamlining existing Nestle policies and are currently in the process of merging and updating them into one 'Responsible Sourcing Standard*'. This Standard will replace current versions of the Nestlé Supplier Code, Nestlé Responsible Sourcing Guideline and Nestlé Commitment to Responsible use of materials from agricultural origins and will better reflect our work on the ground, for example regarding ethical recruitment or no deforestation where our current operational cut-off date of February 1, 2013 will be better reflected. This new Standard is already drafted, in consultation with external stakeholders, and will be publicly released in June 2018**.
*Nomenclature to be confirmed.
** tentative date