Nestlé Open Forum on Deforestation, Malaysia

Together with TFT, Nestlé has defined the Responsible Sourcing Guidelines, a set of critical requirements to guide the Nestlé procurement process and to ensure compliance with the Nestlé Supplier Code.

17 May 2010 --- José Lopez, Executive Vice President Nestlé S.A., announced in Malaysia Nestlé’s partnership with TFT (The Forest Trust), reaffirming Nestlé’s commitment to ending the deforestation of rainforests.

TFT, a global non-profit organization, will help Nestlé to build responsible supply chains by identifying and addressing embedded social and environmental issues. Nestlé is the first global consumer goods company to become a TFT member.

The partnership starts with palm oil, and Nestlé is studying its supply chains to determine a similarly ambitious target for the pulp and paper it uses. Together with TFT, Nestlé has defined the Responsible Sourcing Guidelines, a set of critical requirements to guide the Nestlé procurement process and to ensure compliance with the Nestlé 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.

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

Nestlé 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.

By setting critical requirements for its procurement process and checking compliance with its Supplier Code, Nestlé wants to ensure that its products have no deforestation footprint.

Responsible Sourcing Guidelines

Together with TFT, Nestlé developed the following requirements for palm oil: The palm oil Nestlé purchases, will:

* Be derived from plantations and farms operating in compliance with local laws and regulations
* Protect high conservation value forest areas
* Support the free prior and informed consent of indigenous and local communities to activities on their customary lands where plantations are developed
* Protect peatlands
* Protect forest areas of ‘high carbon’ value

To further implement the Responsible Sourcing Guidelines, Nestlé 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.

These Responsible Sourcing guidelines are enforced with immediate effect. TFT’s work with Nestlé has already begun and Nestlé will continue to communicate on its progress.