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Nurturing a Healthier Life for Nigerians

Nestlé in society

Nestlé Nigeria

Creating Shared Value Report 2012

Highlights 2012 for Nigeria Nestlé

pupils participatingin Nestlé Healthy Kids programme in Nigeria.

10,000Promoting nutrition education and physical activity in primary schools.

Combating micronutrient deficiency in Nigeria.

Ensuring sustainable water resources management.

3 388,145 mreduction in water use in our factories equivalent to a 22% drop

total water

Supporting smallholders farmers to grow high quality grains.

2,500farmers trained through capacity building programmes.

Promoting stakeholder engagement and CSV leadership.

450expert stakeholders, including multi-lateral agencies, NGOs, industry associations, government representatives, academia, media, investors and social entrepreneurs,attended CWA regional CSV Forum in Lagos.

Continuously reducing our environmental footprints in Nigeria.

4.4GJ/tonne total on-site energy consumption, against 5.3 in 2011.

households use MAGGI cubes everyday, making it the single largest carrier of iodine and iron in Nigeria. MAGGI cubes are produced from local soybean.

20 million Providing Nigerians with nutritious, all family cereals enriched with iron and vitamin A.

households consumeGOLDEN MORN enriched with Iron and vitamin A every month .

20 mio

4water pumps at Agbara factory help address local water issues in the local community.

70 teachers and volunteers participating in ProjectWET to promote awareness and stewardship of water resources.

8,000tonnes of maize purchased from famers in Nigeria.

5,000tonnes of soybeanpurchased from farmers in Nigeria.

5,900tonnes of sorghum purchased from farmers in Nigeria.

55Journalists from print, electronic and online media participated in the CSV Media Workshop held in Lagos to strengthen reporting skills and raiselevel of media coverage of nutrition, water and rural development issues.

1st Company in CSV Performance in Nigeria.

257.64Greenhouse gases emission - kilogram C0 equivalents per 2

tonne of product against 320.22 direct GHG emissions in 2011

Promoting indigenous technological capability in Nigeria.

13students participating in an 18-month multi-skill, vocational training in electro-mechanical automatic and Instru-mentation engineering at Nestlé Technical Training Centre, Agbara.

2,179permanent employees.

Table of Contents

Nutrition Water

Rural Development

EnvironmentSustainability

Stakeholder Engegement

EnvironmentalSustainability

Human Resources

Compliance and Human Rights

Nestlé in society 3

2012 Performance Summary for Nestlé Nigeria

Nestlé has developed key performance

indicators (KPIs) as part of our

commitment to more evidence-based

reporting.

The key performance indicators in this

report specific to Nestlé Nigeria only.

Global equivalents where they exist

can be found at:

www.nestlé.com/csv/2012/kpis

Unless stated otherwise, performance

indicators are for the year ending 31

December 2012. The reference in the GRI

column are to the applicable indicator from

Nestlé in society and Creating Shared Value Key Performance Indicator GRI 2011 2012

Economic

Total Group Sales (NGN billion) EC1 116.7

Net Profit for the year (NGN billion) EC1 21.1

Nutrition

Products featuring Nestlé Nutritional Compass labelling (% of sales) PR3 % 100%

Popularly Positioned Products (NGN billion) PR3 68.6

Rural development and responsible sourcing

Farmers trained through capacity building programmes 2500

Water 3Total water withdrawal (million m ) EN8 388,145

3Total water withdrawal (m per tonne of product) EN8 3.18

Environmental sustainability

Total production volume (tonnes) 121,921

Raw materials used (tonnes) EN1

123,140Packaging Materials (tonnes) EN1 12,533

Total on-site energy consumption (gigajoules) 537,718

Total on site energy consumption (gigajoules per tonne of product) 4.4

97.9

16.5

100

55.8

700

438,238

3.71

117,996

119,176

11,607

629,400

5.3

Production volume

Materials

Energy


the Global Reporting Initiative G3.I

guidelines. We welcome feedback

on these KPIs, and how they may be

developed further.

Nestlé in society and Creating Shared Value Key Performance Indicator GRI 2011 2012

Emissions, effluents and waste

Direct GHG emissions (tonnes CO ) EN16 31,4132

Direct GHG emissions (kg CO eg per tonne of product) EN16 257.642

3Total water discharge (m ) EN21 62,4553Total water discharge(m per tonne of product) EN21 0.5123

Quality of water discharged (average mg COD/I) EN21 71

By–products (kg per tonne of product) EN22 12

Manufacturing sites certified against ISO 14001 (Sites certified: Agbara, Flowergate and Ota DC) 3

Human rights and compliance

Nestlé contraventions of infant formula marketing policy requiring remediation PR7 0

Infant formula marketing staff trained in the WHO Code (% of staff) PR6 100

Total number of significant product recall or incidents of non compliance PR2 0

Our people

37,700

320.22

115,758

0.9810

84.9

16

3

0

100

0

Environmental sustainability governance


Total workforce (number of employees) LA1 2,179

Total rate of new employee hires (%) LA2 4%

Total rate of employee turnover (%) 3%

Lost-time injuries and illnesses among employees and on-site contractors (per million hours worked) LA7 0.01

Total recordable injuries and illnesses among employees and on-site contractors (per million hours worked) LA2 0.54

Fatalities of employees and on-site contractors LA7 -

Average hours of training per year per employee per category LA10 20

Leadership positions held by women (%) LA13 33.3%

Local Management Committee members native to country EC7 33.3%

2,168

6%

3%

0.65

0.8

-

16

22.2%

33.3%

Nestlé in society

In the past, corporate investment in

community and environmental initiatives

were often seen as 'obligations’ or

simply philanthropy: added costs that

had to be borne to minimise operational

risks and protect reputation. Creating

Shared Value redefines many of these

obligations as opportunities to

strengthen the business long term –

adding value for shareholders and our

stakeholders.

Creating Shared Value builds on our

commitment to compliance and

sustainability, both of which are

important ways of mitigating risks to our

business, protecting our reputation and

in the case of sustainability, reducing

costs. Creating Shared Value is

ultimately about ensuring our

competitiveness and commercial

success in the long term.

Compliance

Sustainability

The Nestlé in Society: Creating Shared

Value Report 2012 focuses on our work

in three core areas: nutrition, water and

rural development. The report also

highlights related progress in

environmental sustainability, support for

indigenous technological capability,

compliance and human rights as well as

stakeholder engagements in 2012.

Nestlé in society pyramid

Creating Shared Value

Nutrition, water, rural development

Protect the future

Laws, business principles, codes of conduct


For a company to be successful in the

long term and create value for its

shareholders, it must also create value for

the society. We call this Creating Shared

Value (CSV). We believe companies can

create value for society and contribute to

solving national problems in a variety of

ways - particularly through business

strategies that share the benefits of

commercial activities, delivering social,

environmental and financial returns.

Since the beginning of our operations in

Nigeria in 1961, Nestlé has always been

concerned with its impact on the

surrounding environment and

communities, adopting the highest

standards in all its operations. As a

result, our corporate culture has been

built on the belief that in order for us to

succeed as a business, we need to

ensure that the communities and

environment around us also prosper.

We believe that we can create value for

our shareholders and society by doing

business in ways that specifically help

address local issues in the areas of

nutrition, water and rural development.

We proactively identify opportunities to

link our core business activities to action

on related social issues. That is why we

have called this report Nestlé in Society:

Creating Shared Value Report 2012.

Our commitment to sustainability is

unwavering and we are pleased to

share our progress.

This is our first sustainability reporting

in line with the Global Reporting

Initiative G3.1 Guidelines. The Food

Processing Sector Supplement (FPSS)

is not referenced. The G3.1 enables us

to be transparent about a wider range

of sustainability issues.

This report highlights the major CSV

programmes that we have sustained in

the areas of nutrition, water, rural

development, environmental

sustainability, as well as compliance

and human rights commitments.

A Message from our Managing Director and Chief Executive

While these programmes do not claim

to address all of the significant social

problems that the country faces, we

believe that they create can make a

real and positive difference in society.

We have achieved a number of our

sustainability goals and we are on

track to achieve even more in the

years ahead as our sustainability

journey continues.

We welcome your input and ideas and

hope that you find our Nestlé in

society and CSV report informative

and engaging.

Martin Woolnough

Managing Director & Chief Executive


Martin Woolnough, visits Community Primary School Sagbe-Obe in Ibadan, Oyo State. Nestlé worked with the Oyo State Ministry of Education to introduce the Nestlé Healthy Kids Programme to the school.

Managing Director of Nestlé Nigeria,

Nestlé Nigeria CEO Martin Woolnough interacting with parents and teachers in Sagbe - Obe Community in Ibadan, Oyo State.

Nurturing a Healthier Life for Nigerians

To be the leader in nutrition, health and wellness, trusted by all stakeholders.

Mission Nurturing a healthier life for Nigerians

Values

Trust

Respect

Clarity

Action

Objective



Pupils of Sagbe-Obe Community Primary School in Ibadan, taking part in Nestlé Healthy Kids Programme.

About this Report

Our aim is to report on Nestlé’s long-

term impact on society and how this is

intrinsically linked to the creation of our

long-term business success.

This is our first sustainability report to

use Global Reporting Initiative (GRI)

G3.1 guidelines as reporting reference.

The Food Processing Sector

Supplement (FPSS) is not referenced.

As the learning process for this first

report using GRI G3.1, the scope of the

reporting period covers Nestlé Nigeria’s

operations for the year ending 31

December 2012.

The environmental data refers to

Agbara Factory only, and safety and

health figures cover 2,179 Nestlé

employees as well as contractors and

third party staff working on Nestlé sites.

Our subsequent CSV report will include

environmental data from Flowergate

factory.

The environmental performance

indicators support the consistent,

Our reporting history

Report boundary, scope and

assurance

We have not engaged the services of

independent parties to verify this report

as part of an assurance process. The

quantitative data presented was

calculated by Nestlé, in accordance

with the collection, recording and

analysis methods normally employed

by the company.

accurate and timely demonstration of

our environmental sustainability

performance at country level.

N

estlé carries out its social

responsibilities through value creation

focused on three areas: nutrition, water

and rural development. However, it is

not possible to report all our activities in

each area, and we follow the principle

of materiality, that is, we focus our

report on the company’s activities,

principles and values that can influence

stakeholders and decision-making

processes.


Nutrition

Water Rural Development


Agbara manufacturing complex is the biggest Nestlé factory in sub-Saharan Africa. The factory provides direct

employment to over 1,450 people locally, gives local consumers greater access to Nestlé products and offers other

indirect economic benefits across the community.


The Nestlé Corporate Business Principles

Nutrition, health and wellnessOur core aim is to enhance the quality of consumers' lives every day, everywhere by offering tastier and healthier food and beverage choices and encouraging a healthy lifestyle. We express this viaour corporate proposition'Good Food, Good Life'.

1

2Quality assurance and product safetyEverywhere in the world, the Nestlé name represents a promise to the consumer that the product is safe and of a high standard.

Consumer communication We are committed to responsible, reliable consumer communicationthat empowers consumersto exercise their right to make informed choices andthat promotes healthier diets. We respect consumer privacy.

3

Human rights in our business activities

We fully support the United Nations Global Compact's (UNGC) guiding principles on human rights and labour and aim to provide an example of good human rights and labour practices throughout our business activities.

4


The ten Nestlé Corporate Business

Principles are at the heart of

everything we do. The ten principles

are implemented through the relevant

codes, policies, and other processes

and tools developed by Nestlé to

ensure that they are practiced across

our company every day.

The ten principles of business

operation provide the foundations for

our Creating Shared Value strategy

and are addressed throughout this

report.

Leadership and personal responsibility Our success is based on our people. We treat each other with respect and dignity and expect everyone to promote a sense of personal responsibility. We recruit competent and motivated people who respect our values, provide equal opportunities for their development and advancement, protect their privacy and do not tolerate any form of harassment or discrimination.

5

6

Environmental sustainabilityWe commit ourselves to environmentally sustainable business practices. At all stages of the product life cycle we strive to use natural resources efficiently, favour the use of sustainably-managed renewable resources, and target zero waste.

9

WaterWe are committed to the sustainable use of water and tocontinuous improvement in water management. Werecognize that the world faces agrowing water challenge andthat responsible managementof the world's resources by allwater users is an absolutenecessity.

10

Supplier and customer relations We require our suppliers,agents, subcontractors andtheir employees to demonstrate honesty,integrity and fairness, andto adhere to our non-negotiable standards. In thesame way, we are committed to our customers.

7

Safety and health at work We are committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain.

Agriculture and rural developmentWe contribute to improvements in agricultural production, the social and economic status of farmers, rural communities and in production systems to make them more environmentally sustainable.

8


Nutrition

Left to right: Guy Kellaway, Category Business Manager (Culinary); Prof. Tola Atinmo, Founding President, Federationof African Nutrition Societies (FANUS); Iquo Ukoh, Marketing Services Director; Dr. Abimbola Ajayi, Head of Nutrition Unit, Lagos State Ministry of Health; and Samuel Adenekan, Corporate Communications and Public Affairs Manager, at the launch of the new MAGGI cube fortified with iron.


Fortification of MAGGI

cubes to address local

needs

Buoyed by the need to ensure that

fortified products reach the people

who need them most, Nestlé

introduced a new range of fortified

bouillon cubes to Nigeria in 2012,

adding iron to the already iodine-

fortified MAGGI brand seasonings.

Bouillons are a staple part of many

lower income consumers' diets in

Nigeria and are consumed in a

variety of traditional dishes. A single

MAGGI cube can serve two or more

people. MAGGI cubes reach 20

million households every day, making

it the single largest carrier of iodine

and iron in Nigeria.

A common problem with fortification

is that other nutritional components

in the food may reduce the

bioavailability of the fortified nutrient.

Adding certain nutrients can also change

the appearance and taste of the food. To

address these issues, Nestlé has developed

novel processes to reduce the organoleptic

changes caused by certain micronutrients,

while at the same time optimizing their

bioavailability.

Micronutrient deficiencies represent a

serious health risk to a child’s health,

particularly in developing countries.

Micronutrients such as iron, vitamin A,

iodine and zinc are essential for growth

and development. Micronutrient

deficiencies account for one-third of all

malnutriton-related child deaths in the

world, many of them occurring in

developing countries. Extreme cases of

iron deficiency result in anaemia. In

Nigeria, the problem affects more than

three-quarters of preschool-age

children.

We market a growing number of

Popularly Positioned Products (PPPs),

high quality food products that provide

nutritional value at a price people can

afford. They include everything from

culinary products to beverages and

cereals.

In 2012, Nestlé made a giant stride in

the micronutrient fortification of two

popularly positioned products in Nigeria:

MAGGI cubes and GOLDEN MORN, an

all-family cereal. Food fortification – the

addition of one or more micronutrients

(vitamins, minerals and trace elements)

to food and beverages – offers one of

the most cost effective public health

solutions to address population-wide

nutrient deficiencies and improve the

nutritional value of foods.

Fortifying our Popularly Positioned

Products with micronutrients can help

address deficiencies where they are

most prevalent.

A cross-section of consumers at the MAGGI Star Kitchen event in Kano Sate.

Recipe demonstration on how to use MAGGI cubes during the cooking process.


Micronutrient Fortification of Popularly Positioned Products

Iyabo Lawani, Nestlé Home Economist engages consumers in a meal planningpuzzle game during MAGGI Star Kitchen neighbourhood activation event in Lagos.

MAGGI Star Kitchen: Educating families to

cook balanced meals with MAGGI

In addition to improving the

nutritional value of its products

by reducing salt content and

adding micronutrients, our

MAGGI brand introduced a

novel cooking education

programme in Nigeria in 2012.

Known as 'MAGGI Star

Kitchen', the mobile kitchen

travels to towns and cities

week by week, promoting

good cooking practices,

offering interactive cooking

demonstrations, women's

forums for group discussions,

meal planning tips and

presentations on micronutrient

fortification.

The MAGGI Star Kitchen is part

of the campaign to promote

home cooking using fresh local

ingredients. This is a complete

creating shared value initiative

as it combines taste and

nutrition through the use of

MAGGI Women Forum

MAGGI Women Forum is a development programme

from the MAGGI brand. It is designed in collaboration

with the State Ministry of Women's Affairs and relevant

local government agencies to empower women in home

management and in ensuring a healthy lifestyle for the

family.

In 2012, the MAGGI Women Forum was held in 8 states

and reached 38,500 women.

Cooking demonstration during the MAGGI Star Kitchenneighbourhood activation event in Lagos.

MAGGI Women Forum in Ibadan.


Promoting Culinary Hygiene and Health Education

fortified MAGGI cubes. As

home-cooked meal are often

healthier than processed food

or street food, there is an

additional nutritional benefit

to home cooking.

Furthermore, there is an

environmental benefit as

MAGGI's campaign promotes

the use of local ingredients

which have a lower

environmental impact and

support the local economy.

The mobile MAGGI Star

Kitchen reached 100,000

people in Nigeria in 2012.

Nestlé also produced simple

educational materials such as

pocket cards and fact sheets

in Nigeria's three main

languages: Yoruba, Hausa

and Igbo, to promote better

understanding of the health

benefits of micronutrient

fortified products.

Addressing Micronutrient

Deficiencies in Nigeria

through GOLDEN MORN

In Nigeria, around one third of

preschool children are deficient invitamin A, while more than three

quarters of young children and many

pregnant women suffer from iron

deficiency. To address this issue,

Nestlé has fortified its popularly

priced GOLDEN MORN family cereals

with both iron and vitamin A. More

than 210 million servings of GOLDEN

MORN are consumed in Nigeria every

year, so fortification gives families

across the country the opportunity to

increase their nutritional intake at

breakfast every day.

Launch of GOLDEN MORN Choco, a chocolate-flavoured breakfast cerealfortified with vitamin A, at Agege market.

Left to right: Wale Arikawe, Category Business Manager (Dairy); Prof. Ignatius Onimawo, President, Nutrition Society of Nigeria; Mrs. Arinola Sodipo, representing the First Lady of Lagos State; Martin Woolnough, MD of Nestle Nigeria; Prof. George Obumneme, Director, Federal Ministry of Health at the launch of the new GOLDEN MORN (fortified with vitamin A and iron).



Helping Nigerian kids to

Get Active and

Healthy

Getting active and eating well

can help children achieve and

keep a healthy body weight. To

promote healthier lifestyles and

diets for kids, Nestlé launched

the Healthy Kids programme in

Nigeria in 2011, in collaboration

with the State Universal Basic

Education Board (SUBEB) and

Centre for Health Education,

Population and Nutrition

(CHEPON).

The Nestlé Healthy Kids

programme aims to teach the

benefits of a healthy lifestyle to

school-age children, giving them

the choice to develop positive

attitudes and behaviours towards

food and exercise to achieve and

maintain a healthy body weight

into adulthood.

The key to the programme's

success is the behaviour focused

approach and the quality of the

expert teams, which tailor the

format to meet the specific needs of

local communities.

We also ensure that Healthy

Kids is not associated with our

product brands.

The Healthy Kids programme

reached 10,000 pupils in Lagos

and Ogun states in 2012.

Nigerian children using textbooks provided by the Nestlé Healthy Kidsprogramme for 6 to12 year olds.

Promoting physical activity in schools through the Nestlé Healthy Kids programme.


Promoting Optimal Breastfeeding in

Nigeria

We believe that breastfeeding is the best start a

baby can have in life. In line with World Health

Organisation (WHO) recommendations, Nestlé

supports exclusive breastfeeding up to 6 months

of age, with continued breastfeeding along with

appropriate complementary foods up to two

years of age or beyond.

In 2012, Nestlé Nigeria lent a hand to the Federal

Ministry of Health (FMoH) to celebrate the World

Breastfeeding Week. In collaboration with the

FMoH, Healthcare professionals received SMS

messages promoting breastfeeding. These tips

reached 1,000,000 people.

We also support our female employees to

breastfeed by offering 4 months maternity leave

and 5 day paternity leave. Our head office is also

equipped with a breastfeeding room.Children relaxing at “Tinu-Baby Room” at the Ilupeju head office. The facility will enable female employees to breastfeed their babies during working hours.

Over the past few years and during 2012, we have had

constructive dialogue with different NGOs and interest groups on

optimal infant and young child nutrition, including breastfeeding.

To promote information sharing, education and foster professional

excellence among healthcare providers in Nigeria, the Department

of Peadiatrics, University of Uyo Teaching Hospital, Akwa Ibom

organized a workshop on neonatal resuscitation and nutrition in

the first 1,000 days of life in collaboration with the Nestlé

Nutrition Institute Africa (NNIA).

The Nestlé Nutrition Institute Africa, which is independent from

Nestlé, plays a vital role in providing healthcare professionals in

Africa with access to the most current nutrition information and

tools they can utilise to make good nutrition a motivating goal for

those they serve.

Healthcare professionals and key opinion formers generally

recognise that the primary interest of NNIA is in acquiring and

sharing knowledge to achieve positive change on nutrition issues.

Strengthening our leadership in Infant

and Young Child Nutrition

A cross-section of participants at the Neonatal Resuscitation Workshop in Uyo, Akwa Ibom.

Water

A cross-section of school pupils at Nestlé Waters Plant, Agbara Factory during the 2012 World Water Day



World Water Day

Every March, Nestlé Waters (Nigeria) marks World

Water Day in partnership with Project WET. Children

and teachers participate in Together for Water

festivals, to increase awareness of the importance of

fresh water for nature, healthy hydration, good

hygiene and disease prevention.

A cross-section of children on tour of Nestlé

Waters Plant at Agbara factory

Children participating in healthy hydration

activities at Agbara factory during the 2012

World Water Day.

Optimizing Water Reuse and Efficiency

We aim to be the most efficient water user among food

manufacturers in Nigeria. The close proximity of our food

manufacturing plant and the Nestlé Waters Plant at Agbara

has enabled us to install a connection so that all surplus water

from the Nestlé Waters deep well is used by Nestlé Nigeria 3plants, leading to a reduction in the water ratio (m /tonne of

3finished product) and annual water saving of 100,000m .

Water Use in our Operations

2008 2009 2010 2011 2012

600000

500000

400000

300000

200000

100000

0

Production volume (tonne) Total water withdrawal (cubic metre)

Water withdrawal versus production

volume, 2008 - 2012

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

Water Ratio (cubic metre per ton)

2008 2009 2010 2011 2012

Water Ratio(cubic metre per tonne of finished product)

Since 2008, water withdrawals at our Agbara factory have

fallen significantly, while our food and beverage production

volume increased considerably. Total water withdrawal by

source is the sum of water used by our factory from all

sources. This includes water that may be treated through

industrial services (such as softening and demineralising),

non-contact cooling water, water used for cleaning and

water used by itself as a raw material (e,g. for bottled

waters).

The reduction in water withdrawal is the result of extensive

efforts by Nestlé engineers and environmental managers

to improve water efficiency in our operations.


7.05 5.82 4.33 3.71 3.18

Driving Operational Efficiency

As part of our commitment to drive operational

efficiency, we are focused on reducing water withdrawal,

increasing reuse and continually working to improve the

water efficiency of our products.


Treating Wastewater Effectively

When water cannot be reused, either in the manufacturing process or

for external factory purposes, it is treated and returned to the

environment.

The Agbara factory has its own wastewater treatment facility, which

achieves the legal limits of COD (Chemical Oxygen Demand) of 90 mg

per litre and BOD (Biochemical Oxygen Demand) of 50 mg per litre for

treated effluents returning to the environment. We always ensure that

treated water is clean enough to sustain marine life.

Nestlé Brings Relief

When a natural disaster occurs, water

sources and distribution systems are

often polluted or damaged, resulting in an

immediate need for safe drinking water.

Nestlé, in partnership with local

authorities, can play a vital role to provide

affected communities with bottled water.

In 2012, Nestlé Nigeria donated water

and food products to the Nigerian Red

Cross Society for distribution to flood

victims in all affected states in Nigeria.

Providing Free, Clean Drinking Water to Nigerians

Nestlé helps to address local water issues in

communities where we operate because

improved water availability and access is

essential for rural development and improved

quality of life in the communities we depend

on for raw material supply.

Nestlé provides clean drinking water to the

immediate communities around our Agbara

factory.

Some residents fetching tap water in front of Agbara factory

Executive members of the Nigerian Red Cross Society, Edo State in a group picture with Nestlé Corporate Communication and Public Affairs Manager, during the donation of Nestlé PURE LIFE table water to Red Cross.

Agbara factory wastewater facility

Supporting Water Education for Teachers

Participants at Project WET Workshop held in Lagos in 2012.



Mrs F. A. Tijani

A cross section of teachers representing the key water users

at the 'Train-the-Trainer' Project WET Workshop in Lagos.

Project WET

To promote awareness, appreciation, knowledge and

stewardship of water resources, Nestlé launched Project WET

(Water Education for Teachers) in Nigeria in October 2012. The

launch was heralded by a 'Train-the-Trainer Workshop', themed

'Water Conservation and Healthy Hydration'.

The workshop brought together teachers and head teachers

from 20 schools drawn from 5 selected districts in Lagos State.

The Senior Vice President of Project WET, Mr. John Etgen,

facilitated the one-day workshop. The interactive workshop

examined diverse learning styles with relevant water-related

activities. Participants engaged in practical work and in thought

provoking discussions. The workshop also provided educators

with a large selection of creative teaching strategies and exposed

them to different local water-related teaching aids.

Country Business Manager, Nestlé Waters (Nigeria) Adewale Ojo (right) presenting certificate of parti-cipation to Akinwolere Colman, Head of Social Mobilisation Department, Lagos State Universal Basic Education Board (SUBEB), while Project WET Senior Vice President, John Etgen, looks on.

The Senior Vice President of Project WET, John Etgen,

explaining aqua bodies at the Project WET Workshop.


Rural Development

A Cassava farmer uprooting the high yielding cassava variety at IITA Ibadan multiplication site.


Nestlé's sustainable agricultural

strategy is designed to ensure a

steady supply of safe, high quality

agricultural commodities and to

allow rural communities to increase

their income as a result.


Nestlé/IITA Cassava Starch

Project

The Cassava Starch Project is aimed at

increasing productivity per hectare in

cassava, through multiplication and

dissemination of improved, high yielding

varieties. It seeks to ensure smallholder

farmers benefit from improved cassava

management practices.

The initiative aims to introduce smallholder

farmers in target communities to better

farming practices which will address the

common agronomic errors that keep root

yields below 12 tonnes per hectare. This

includes the efficient use of inputs, such as

the timely application of fertilizers /

herbicides and the use of harvesters to

reduce the drudgery of farming.

The project will also ensure sustainable

supply of cassava roots with high starch

content to targeted cassava starch

producing firms (MATNA Foods Company,

Akure and Nigeria Starch Mill, Ihiala) to

meet the supply needs of Nestlé.

The ultimate goal of the cassava project is

to replace imported corn starch with

cassava starch in our culinary

manufacturing process.

Between 2011 and 2012, over 500

hectares of land were planted with IITA

improved cassava varieties at various

locations in six states in the south-west

and south-east regions of Nigeria.

Supporting Smallholder Cassava Farmers

Cassava starch processing plant at MATNA Foods Company, Akure.

One of the Demonstration Plots (for resource use efficiency) at IITA Ibadan

Cassava tubers with high starch content at MATNA Foods Company, Akure.

Cassava starch sample from MATNAFoods Company, Akure

Nestlé Grains Quality

Improvement Project

The Nestlé Grains Quality Improvement

Project is designed to ensure our factories

receive a steady supply of safe, high

quality agricultural commodities, allowing

rural communities to generate higher

incomes as a result. Up to 30% of

cereal crops in Nigeria are lost to

mycotoxin contamination due to bad

agricultural and storage practices.

The project raises awareness through

campaigns; trains agricultural

The Project’s Components

extension agents and farmers on good

pre-harvest and post-harvest practices

for managing mycotoxin; tests grains

for mycotoxin to determine safety;

assesses possible uses of the grains;

develops warehouses to aggregate the

grains; and creates market linkages

with grains export value chain

organizations that are quality conscious

in order to maximise profits.

About 10,000 farmers (including

agricultural extension agents, farm

village heads, farm family heads, grains

suppliers and transporters) were

trained on best mycotoxin

management practices in the

2010/2011 farming season.

Factory gate rejection progressively

reduced from 4% in 2010 to 0.3% in

2012, showing that mycotoxin risk was

under control in our manufacturing

operation. Also, remarkable reduction

in grain storage at factory level: stock

cover significantly reduced from 8

weeks in 2009 to 3 weeks for

soybeans, and 4 weeks for maize and

sorghum in 2012.

Value to Society

Value to Nestlé

Assisting Farmers to Grow High Quality Grains

A cross-section of farmers, farm village heads, farm family heads, grains suppliers and transporters at the Mycotoxin Management Seminar in Kaduna State in 2012.


Oluwaseun Akinoso, Nestlé Nigeria Strategic Buyer (Agric Raw Materials) showing a sample of mycotoxin - infested maize to farmers.

Mycotoxin Posters in Hausa

Engaging with Stakeholders

A cross-section of participants during the CWA regional CSV Forum in Lagos in 2012.


Engaging with our

stakeholders underpins

Creating Shared Value (CSV),

enabling us to share insights,

identify emerging issues,

shape our responses, develop

strategy and continue to drive

performance improvements in

the areas of nutrition, water

and rural development.

Stakeholders – ranging from

consumers, customers and

suppliers to the investor

community, employees,

governments and multi-lateral

agencies, non-governmental

organizations (NGOs),

community-based

organizations, civil society and

academia – are all important to

our continuing business

success and our ability to

'Create Shared Value'.


Nestlé CWA Regional Creating

Shared Value Forum

In pursuit of efforts to promote and

mainstream Creating Shared Value as a

corporate strategy and reach out to broader

stakeholder audiences, Nestlé Nigeria hosted

the maiden Regional CSV Forum for Central

and West Africa in September 2012.

The theme of the forum, organised in

collaboration with Lagos Business

School/Pan African University was “Creating

Shared Value: the Role of Business in Food

Security and Nutrition”.

The two-day event featured four plenary

sessions on the following thematic issues:

Harnessing the potential of micronutrient

malnutrition: challenges and

opportunities;

The role of agronomy research;

Food security and water crisis;

Capacity building in the agricultural value

chain; and

The big idea: Creating Shared Value.

The Forum enabled us to work with a number

of stakeholders to share insights, identify

best practices, discuss our CSV performance

and understand stakeholder expectations and

concerns on our CSV strategy.

About 450 participants and external expert

stakeholders from multi-lateral agencies, non-

governmental organisations (NGOs) industry

associations, government representatives,

farmer associations, academics, investors,

social entrepreneurs and the media attended

the event.

Stakeholders Engagement

A cross-section of participants at the regional CSV Forum.

Professor Mark Kramer of Harvard University, one of the pioneers of the creating shared value concept, speaking on “Creating Shared Value: Redefining the Role of Business in Society'' at the CSV Forum.



Nestlé holds Creating Shared

Value Workshop for Journalists

To further promote better understanding of

nutrition, water and rural development issues

and equip journalists with requisite reporting

skills, Nestlé organised a workshop for health

and science editors in 2012. Featured

speakers provided fresh thinking on how to

mainstream nutrition, water and rural

development reporting in the media. The

Special Adviser to the Minister of Agriculture

and Rural Development, Dr. Olukayode

Oyeleye led discussion on ''Telling the

agricultural story: opportunities and

mechanisms''; The Anglophone Africa

Coordinator, World Federation of Science

Journalists, Akin Jimoh, spoke on the

''Challenges of communicating science-based

food and nutrition information to the public'',

while the President, Africa Federation of

Science Journalists, Diran Onifade talked on

''Turning water into news''.

About 55 senior media executives from print,

electronic and online media attended the

event.

Nestlé Nigeria Managing Director, Martin Woolnough, making opening remarks at the CSV Media Workshop.

Akin Jimoh, the Anglophone African Coordinator of World Federation of Science Journalists facilitating a session on “Challenges of communicating science-based food and nutrition information to the public”.

Nestlé Regional Corporate Communication and Public Affairs Manager for Central and West Africa, Bineta Mbacke addressing journalists during the CSV Media Workshop.

Creating Shared Value Award

Nestlé emerges best Company in CSV

Performance in Nigeria

Nestlé has earned praise for its leadership in

Creating Shared Value in Nigeria. At the 2012

edition of the Nigerian Social Enterprise Reports and

Award (SERA), Nestlé won first Prize for CSV

performance. The company was also voted the third

most socially responsible company in Nigeria. Ken

Egbas the Managing Director of Tru Contact,

organisers of the event, commended Nestlé for

building the capacity of smallholder farmers through

the Nestlé Grains Quality Improvement Project,

among others.

Receiving the award on behalf of Nestlé Nigeria,

Martin Kruegel the Finance and Control Director,

stated: “Nestlé is most grateful for this recognition.

As the first organisation to adopt CSV, this

constructive approach has become a compelling

model for Nestlé to leverage its core activities and

partnership for the joint benefit of society and

shareholders. The SERA Award will be a strong

encouragement for us to continue with our efforts”.

Martin Kruegel, Nestlé Nigeria Finance and Control Director, speaking at the SERA Award.

Martin Kruegel, Nestlé Nigeria Finance and Control Director, receiving the certificate of third most socially responsible company in Nigeria from SERA.



Feedback from stakeholders

To further engage with our stakeholders, a dinner reception was

organised for key opinion leaders in Central and West Africa

during the CSV Forum.

The stakeholders were supportive of the overall CSV approach

and were highly complimentary about the spirit in which the

CSV Forum was conducted.

There was a wide-ranging discussions of relevant issues and

specific areas of concern were highlighted by the stakeholders,

including:

the growing importance of micronutrient fortification of

staple foods;

the increasing challenges of malnutrition;

the loss of skills and knowledge in farming communities as

low income drives people away from the sector;

increasing water stress and water security driven by climate

change.

Stakeholders also made a number of recommendations on

improving the overall strategic CSV approach including the

following suggestions:

extend the company's collaboration with community based

organisations, civil society and government players;

take a more active lead in public policy issues;

undertake more community engagement.

We value all suggestions and recommendations as part of

developing our CSV approach for the future. We will continue

to update all our stakeholders about our CSV, environmental

sustainability and compliance performance on a regular basis.

Benue Cultural troupe entertaining guests at the CSV KOL dinner

Participants going through CSV brochures at the exhibition stand during the Regional CSV Forum

Bola Audu, CSV Field Officer interacting with some participants during the CSV Forum

Professor Mark Kramer of Harvard University (left) exchangingviews with Etienne Benet, Head of Region, Nestle Central and West Africa at the KOL dinner

Environmental Sustainability


The Agbara manufacturing complex is one of the biggest Nestlé factories in zone A-O-A (Asia, Oceania and Africa). For

many decades we have focused on making the factory more environmentally efficient. Already certified to ISO 14001:2004,

Agbara factory, uses the most efficient technologies to optimise energy and water consumption, minimise waste generation,

utilise sustainably – managed renewable energy sources and eliminate emissions, including greenhouse gases.

As the leading Nutrition, Health and

Wellness Company in Nigeria, Nestlé is

committed to environmentally sustainable

business practices along the value chain.

We are continuously reducing our

environmental footprint by ensuring

efficient use of energy for manufacturing

operations. We commissioned a Tri-

generation Power Plant at Agbara factory

in 2011. The plant generates electrical

power, while chilled and hot water are

generated using heat from the power plant

exhaust gases. This allows us to increase

overall energy efficiency from 42 to 74 per

cent and to reduce CO emissions by 5,000 2

tonnes per year.

Continuously Reducing our

Environmental Footprints in

Nigeria


Promoting environmentally sustainable business practices

Why the investment in Tri-

generation Power Plant?

Nigeria's power infrastructure is one of

the major challenges constraining

socio-economic growth and

development in Nigeria. Most of

Nigeria's infrastructure in the power

sector was built in the 1970s and

1980s. Due to lack of maintenance and

expansion of the facilities, the country

has suffered significantly from the

impact of inconsistent electric supply.

In spite of the abundant energy

resources in the country, the quantity,

quality and availability of electrical

power does not allow for efficient

factory operations.

Ensuring Environmental

Sustainability and Energy

Optimization

One of Nestlé's key environmental

sustainability challenges is energy

efficiency. Energy is expensive and is

associated with multiple environmental

consequences. For example, one of the

primary air emissions associated with the

production of energy is carbon dioxide,

which contributes to global warming.


Mrs F. A. Tijani

Optimising the use of fossil fuels to

generate energy is a critical element in

the management of energy resources.

The tri-generation power plant

generates electrical power as prime

energy. Chilled water and hot water are

produced by recovering the heat

generated from the power plant

exhaust gases. As this heat is usually

expelled into atmosphere, the recovery

of the heat improves overall energy

efficiency. The use of new eco-friendly

absorption chillers also eliminates the

need for ozone-depleting refrigerants,

therefore further reducing the plants'

environmental footprint.

The Agbara Factory Tri-generation

Power Plant is a major contribution to

Nigeria's drive to reduce carbon

emissions. The new tri-generation

plant is also a significant effort in

technology transfer which is over and

above the technology of a standard

power plant.



A cross - section of participants at the Responsible Sourcing Workshop for Nestlé suppliers and vendors in Lagos in 2012.

Mrs F. A. Tijani Ikosi Primary School, Ikosi-Ketu

Responsible sourcing of raw materials

Nestlé transforms agricultural raw materials into tasty,

nutritious and healthy food and beverage products.

We are working with farmers and others in our supply

chain to grow, harvest and process these raw

materials in more environmentally efficient ways

through, for example, our responsible sourcing

programme.

In our Responsible Sourcing Audit Programme we

request key vendors to demonstrate compliance with

Nestlé supplier code with emphasis on integrity,

safety and health, labour compliance and

environmental sustainability.


Nestlé Nigeria supply chain team at the 2012 Vendors'

Day Programme.

Human Resources

Students of the Nestlé Technical Training Agbara Centre, in Mechanical Workshop.


In support of Nigeria's drive towards rapid

transformation and development of indigenous

technological capability, Nestlé Nigeria

inaugurated a state-of-the-art Technical Training

Centre at Agbara factory in 2011.

Multi-skill training: The Centre, which is part of

our Creating Shared Value initiatives, offers 18-

month multi-skill vocational training in Electro-

Mechanical – Automation and Instrumentation

Engineering. The programme is tailored along

the syllabus of the City and Guilds of London

Technicians Examinations Certificate.

Learning facilities: The Centre is ideally located

in the middle of engineering activities in the

factory. It is well equipped with modern

classrooms, a standard library, computer and

technical drawings rooms, state-of–the-art

electrical / instrumentation / automation and

mechanical workshops.

Dr Umar Bindir, Director-General of the National Office for Technology Acquisition and Promotion (NOTAP) (left) congratulating the Swiss Ambassador (right) and Nestlé MD, Martin Woolnough during the formal opening of the Technical Training Centre.


Supporting Development of IndigenousTechnological Capability in Nigeria


International Exposure

for Trainees:

The best five students from

each promotion will have the

opportunity to participate in an

additional training module of

four months in Switzerland. The

five students will be sponsored

by the Swiss Embassy as part

of a bilateral Migration

Partnership Agreement

between Switzerland and

Nigeria. The partnership, which

has a pioneering character,

brings co-operation between

Switzerland and Nigeria to a

new level. Designed to

acknowledge both the

opportunities and challenges of

migration, the partnership is the

first of such agreement

between Switzerland and an

African country.

Dr Umar Bindir, the Director-General National Office for Technology Acquisition and Promotion (NOTAP) congratulates students of the Technical Training Centre.

Raphael Omaballa working in the Electrical Workshop


Safety is one of Nestlé's 10 Corporate

Business Principles, establishing safety

as a non-negotiable priority. High quality

workplace conditions contribute not only

to product quality, but also to employee

safety and satisfaction. We are

committed to preventing accidents,

injuries and illness related to work, and

to protecting employees, contractors

and others in the value chain. We also

understand that when an employee

experiences an injury, it is our

responsibility to investigate to see how

we can improve working conditions.

Safety and Health at Work

0.01

2012

LTIFr - Total Country 2012

We achieved a 98.5%

improvement in Lost Time

Injury and Illness Frequency

rate (LTIFr) during 2012.

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0

0.65

2011

Sunday Nmecha, undergoing screening exercise at Ilupeju head office staff clinic.


0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0

2011 2012

RIFr - Total Country 2012

Our Total Recordable injury

and illness frequency rate

(TRIFr) also dropped by

32.5% over corresponding

period in 2011.

0.8

0.54

Supply chain team at the Ota Distribution Centre, celebrating 1000 dayswithout accident on site. The site also passed ISO 14001 and OHSAS 18001

We require everyone to play an

active role in promoting

awareness and knowledge of

safety and health to employees,

contractors and other people

related to or impacted by our

business activities. Each of our

facilities builds a proactive safety

culture through communication,

training, education and equipping

employees so that unsafe

situations are avoided and rapid

response is available.

We monitor our performance

through the Nestlé Occupational

Safety and Health Management

System.


Anti Corruption

WHO Code Compliance

Our company has zero-tolerance

attitude to corruption and unethical

practices. Our new integrity reporting

system includes the roll-out of a

dedicated website for employees to

deal with compliance-related

grievances.

This anonymous whistleblowing system

enables staff to raise concerns in

relation to our operations and report

malpractices, illegal acts or omission by

employees. Such concerns could be

communicated to the company through

the new Integrity Reporting System.

We also use our Nestlé Continuous

Excellence (NCE) framework to foster a

common understanding of compliance

across the functions. This includes the

verification of appropriate principles and

policies, adequate internal controls,

effective structures, monitoring and

reporting among others.

We are strongly committed to

marketing our infant nutrition products

in accordance with the International

Code of Marketing of Breast-milk

substitutes (WHO Code) and with

national legislation. To this end, we

have in place strict policies and

procedures, and train all our employees

involved in the marketing of infant

nutrition products on the WHO Code.

In 2011, Nestlé became the first infant

formula manufacturer to be included in

the FTSE4Good index. It is the only

responsible investment index in the

world that includes strict criteria and

rigorous monitoring of the marketing of

breast-milk substitutes by

manufacturers.

Human Rights Due

Diligence:

We integrate human rights into all

aspects of our business operations.

We exercise due diligence to identify,

prevent and address actual or

potential human rights impacts

resulting from our activities or the

activities of those with whom we

have relationships.

Our due diligence process includes

the following components:

Workplace Relations

A comprehensive Human Rights

Impact Assessment on Nestlé

Nigeria was conducted in 2011 by

the Danish Institute for Human

Rights (DIHR). The assessment was

part of efforts to help ensure human

rights responsibilities are

implemented in Nestlé globally.

To further advance human rights

principles in the workplace, 1,186

employees were trained on human

rights in 2011 and 1,466 in 2012. The training helps our staff better

understand the relevance of human

rights principles to business

operations.

We are not just committed to

the relevant ILO Conventions,

international standards and

initiatives through the Nestlé

Corporate Business Principles,

but we also work permanently

to improve the level of

awareness and to ensure

compliance with those

Compliance and Human Rights

standards throughout the company.

Management meets regularly with the

local union and the National Union of

Food Beverages and Tobacco

Employees (NUFBTE) as well as the

Food, Beverage and Tobacco Senior

Staff Association (FOBTOB) to

exchange information and discuss

workplace matters.

Our employees have the right to

exercise freedom of association and

collective bargaining. The national

unions of both junior and senior staff

categories are represented in

membership by our staff.

Equal Opportunities and Non-

discrimination

Our policies are free from

discrimination based on race, colour,

gender, religion, ethnicity or tribe,

health status such as HIV/AIDS.

Grievance Procedure

To further discharge our responsibility

to respect human rights, we have

established grievance handling

mechanisms which are legitimate,

accessible, equitable, rights-

compatible, clear and transparent and

based on dialogue and mediation.

Respecting the Right of IndigenousPeople

Land acquisition for manufacturing

purpose is done through relevant and

appropriate government agency.

There is no incident of violations

involving rights of indigenous people.

Nestlé Nigeria continues to take proactive approach to embedding human rights principles

within business operations. The bi-annual MD-Union Forum is an interactive approach to

foster good workplace and industrial relations.


Responsible Advertising

and Marketing

· We are committed to responsible, reliable,

consumer communication that empowers

the consumers to exercise their right to

informed choice and promotes healthier

diets.

· We adhere strictly to the Nestlé Consumer

Communication Principles. We do not

advertise to children under 6 years of age.

· Advertising to children aged 6 – 12 years is

restricted to products that meet

predetermined nutritional profiling criteria.

· Our children's communication principles are

specifically aimed at protecting children by

ensuring that the advertising is not

misleading, does not undermine parental

authority or generate unrealistic expectation

of success.

Supplier and Customer Relationship

· To foster good business practices within

our supply chain, we have communicated

Nestlé Supplier Code to our suppliers in

Nigeria through a training on Responsible

Sourcing.

· All our significant suppliers and contractors

have undergone screening on human rights

through our internal risk assessment to

identify suppliers with a high-risk potential.

· All our suppliers have completed a self-

assessment questionnaire and were

assessed through a third-party audit.


Human Rights Issue

Next Steps

We have made remarkable progress on

our CSV focus areas of nutrition, water

and rural development as well as on

human rights and compliance. However

we still need to do more to provide

greater disclosure in respect of progress

and lessons learned from these CSV

programmes.

In our next report, we plan to align

completely with Global Reporting

Initiative’s (GRI) G3.1 guidelines and

Food Processing Sector Supplement

(FPSS).

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