Nestl Building Socially Responsible Supply Chain

Will identify and address embedded social and environmental issues with supply of palm oil and then with pulp and paper

Jos Lopez, Executive Vice President Nestl S.A., recently announced his company's partnership with TFT (The Forest Trust). The global non-profit organization will help Nestl build responsible supply chains by identifying and addressing embedded social and environmental issues. Nestl is the first global consumer goods company to become a TFT member.

The partnership starts with palm oil, and Nestl is studying its supply chains to determine a similarly ambitious target for the pulp and paper it uses. Together with TFT, Nestl has defined the Responsible Sourcing Guidelines, a set of critical requirements to guide the Nestl procurement process and to ensure compliance with the Nestl Supplier Code. The partnership will focus on assessing suppliers performance with respect to these guidelines and on providing technical support to those who currently do not meet the requirements, but who are committed to achieving sustainability.

Nestls actions will focus on the systematic identification and exclusion of companies owning or managing high risk plantations or farms linked to deforestation.

Nestl has already set the goal that by 2015, 100% of the palm oil it uses will come from sustainable sources. The Company has made strong progress toward that goal; 18% of its palm oil purchases in 2010 come from sustainable sources, and this is expected to reach 50% by the end of 2011.

To further implement the Responsible Sourcing Guidelines, Nestl and TFT will:

  • Communicate these guidelines strongly and clearly to the global commodity industry, particularly the palm oil and pulp and paper sectors
  • Continue to focus its procurement to already certified suppliers
  • Conduct and ensure field audits of its existing suppliers to determine their performance against the guidelines
  • Exclude all suppliers found to be in breach of the guidelines
  • Implement technical assistance programs to support those willing to proceed to sustainability
  • Identify new suppliers who comply or could with technical assistance comply with the guidelines
  • Provide regular and transparent feedback on its findings and its performance against these guidelines.
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