JESS REYESCSV Pillar Lead for Planet

Nestlé Philippines, Inc.

CLIMATE CHANGE INITIATIVES OF NESTLÉ

Our Purpose:

Enhancing quality of life and contributing to a

healthy future.

PHP 130.4 billion in sales in 2015

Cover over 500,000 outlets through

a network of 43 grocery distributors

3rd top tax payer in the country

Top 6 Nestlé market worldwide

Nestlé in the Philippines

OUR BRANDS

Over 20 brands

Manufacturing Facilities

Cabuyao FactoryInfant Nutrition & Liquid Beverages

Lipa FactoryBreakfast Cereals and MILO

Pulilan FactoryNESTLÉ Ice Cream and Fresh Dairy

CDO FactoryNESCAFE and BEAR BRAND

Tanauan FactoryCOFFEE-MATE and BEAR BRAND

1976 19921984

2009 2012

5 Manufacturing Facilities, 7 Co-manufacturers

Nestlé Policy on Environmental Sustainability

video

Nestlé Policy on Environmental Sustainability

Nestlé Commitment on Climate Change

Nestlé aims:

• To constantly lower GHG emissions associated with production and distribution

• To design products that help consumers lower their own GHG emissions in the use of the products.

Nestlé Commitments on Climate Change

Mitigation Adaptation Reporting

Mitigation Adaptation

• Reduction of GHG emissions from direct operations

• Extend scope of GHG reduction efforts along the value chain

• Identify the reduction potential and put in place programs for different GHG

• Further reduction in waste in the supply chain

• Implement a strategy to tackle deforestation

Nestlé Commitments on Climate Change

Reporting

• Engage with governments, farmers, and other stakeholders

• Participate in public policy dialogue

• Identify practical actions and agricultural systems that can be implemented at farm level

• Include enhanced resilience to climate change in plant breeding

• Develop early warning systems

• Share synthesized information on climate adaptation

Adaptation

Nestlé Commitments on Climate Change

Mitigation Reporting

Reporting

• Report, via website and reports on:• Activities to mitigate the causes of, and adapt to the effects of, climate change

• GHG emissions from direct operations

• Measures taken to improve GHG emissions performance

• Apply a product lifecycle approach across the value chain

• Work actively with governments, trade bodies and NGO’s

Adaptation

Nestlé Commitments on Climate Change

Mitigation

Implementation across the value chain

Manufacturing

Sourcing

Distribution & Marketing

Nestlé Responsible Sourcing

• Nestlé conducts audits on suppliers to ensure traceability of raw materials and to work with them to improve environment practices

4 Pillars:Human RightsSafety and HealthEnvironmental SustainabilityBusiness Integrity

The Nescafé Plan

• Long-term approach to Creating Shared Value in the coffee industry that aims to guarantee long-term supply of quality coffee and having a lower environmental impact.

• Gives farmers access to world-class coffee farming technologies, transfers knowledge through training, and promotes sustainable practices

Ash and Sludge used as soil conditioner

• Factory by-products in the form of ash and sludge, which normally end up as waste, are converted into compost or organic soil conditioner for coffee trees.

100% of the coffee waste is converted to soil conditioner

*Not actual pictures from site

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The Nestlé Energy Management Roadmap

Our Ambition• Be a reference company for energy

conservation

• Be recognized as “energy

responsible” by all stakeholders

Efficient use of equipment

Efficient processes

Nestlé Model – every year• Continuous energy savings

• Steady CO2 emission reduction

• Dedicated CAPEX for energy savings

projects

• Renewable energy projects

Improvement Drivers• Use of NEMT and EnMatrix

• Markets to propose Energy savings

projects to feed a database

• Targeted energy assessments

• Cogeneration

• Renewable energiess

Competitive advantage

• Reduction of TCOP

• Corporate image

• Prepared to future energy stress

Operational Pillars

• Efficiency in production

• Best practices in facilities

• Awareness and management of

performance

• Innovation in process technology

Renewable

Energies

Continuous improvement of Nestlé environmental performance

The Nestlé Energy Management Roadmap

Efficient use of equipment

Efficient processes

Renewable

Energies

Energy Target Setting

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ETS methodology

Intr

oducti

on

Safe

ty

Facto

ry

pre

senta

tion

Facto

ry t

our

Day 1

EnM

atr

ix,

NEM

T,

Wate

r m

appin

g

Data

collecti

on

Day 2

Identi

ficati

on

of

pote

nti

als

Pri

ori

tisa

tion

Invest

ment

est

imati

on

Payback

calc

ula

tion

Conso

lidati

on

of

pote

nti

als

Pre

para

tion o

f

Fin

al

pre

senta

tion

Fin

al

pre

senta

tion

Com

mit

ment

on a

cti

on p

lan

Daily

Debri

efi

ng

Day 3 to 8 Day 9 Day 10

D M A I C

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Resources

Min. 10 FTE for 2 weeks on-site:

Factory / Market:

Factory Engineer, IS Engineer, Process Engineer, Production supervisor,

Market Energy Champion, Market Water champion

Nestec:

CO-ENG/Serv Energy expert and Water expert, PTC process specialist,

Knowledge companies:

steam & combustion, electricity, water, compressed air, etc.

On the last day:

Steering Committee:

Market Technical Manager, Factory Manager, Chief Engineer

Factory / Market:

Factory Engineer, Factory IP, Production manager

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=> On-site MilestonesInfo on

Teamroom

DAY1

Factory data

for calculations

4

List of opportunities

to be pursued

5

Chart with all

projects

7

Complete Summary XLS

file ($, GJ, etc.)

8

Projects

descriptions &

calculations on

Teamroom

9

Final presentation

10

Energy

Target

Setting

ETS Action plan example

Priority Project Short Description

SavingsEnergy Saving Water Saving CO2 Investment Payback

[kEU

R/y

ear]

[kC

HF/

year

]

[GJ/

year

]

[GJ/

t]

m3

/yea

r

[m3

/t]

Dir

ect

[t]

[tC

o2

/t]

[kEU

R]

[kC

HF]

[Yea

r]

1

1

2

2

3

33

Projects with Payback < 1 YearProjects with Payback 1-3 YearsProjects with Payback > 3 Years

Total

Typical projects: Apply the good practices in production

processes

25

Apply best practices in Industrial Services

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PROJECTS - Optimization and Management

CIP Improvement

• Shortening CIP Time by relocating conductivity meter

• Annual Savings of 5.2 Mio

Optimize Dearator Use in Boiler House

• Reduce from 2 to 1 Dearator

PROJECTS - Optimization and Management

Steam Trap and Direct Leak Management

• Replace leaking steam traps

• Arrest direct steam leaks

Energy and Resource Recovery Projects

Condensate recovery from Evaporators• Condensate from Evaporators and the cow water is

presently drained.

• This can be recovered after assessing the suitabilityof the water for Boiler operations.

• Total condensate recoverable – 2450 Kg/h

Recover flash steam from dryer air heaters

• Flash steam recovery from dryer air heater and connect it to the LP steam header

• Quantity of flash steam – 446 kg/h

Packaging Impact Quick Evaluation Tool

• Nestlé uses a simplified life cycle approach in packaging development through an eco-design tool, PIQET, to evaluate the impact of the new packaging during its conceptualization and development stage including green house gas emissions.

Packaging Optimization – NESTLÉ Fruit Selection Yogurt

• Original packaging: preformed plastic cup

• New packaging: plastic sheet that is formed, filled, and sealed (FFS) at the production line with a paper label and metallized polyethylene terephthalate (MPET) lid.

Reduced annual packaging material usage

Packaging Optimization – NESCAFÉ 3in1 Variants • Original packaging: 3-layer laminate (printing, barrier, and sealant layer)

• New packaging: thinner 2-layer or duplex laminate (printing and sealant-barrier layer)

Lighter, thinner, and still continues to ensure product quality throughout its guaranteed shelf life.

Solatube® Daylighting System• Lighting system that captures sunlight from outdoors and diffuses the light

inside the facility

Provide 1.5 times more illumination

Renewable Energy forCanlubang & Lipa Factory

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Lipa FactoryRegional Supply Center for breakfast cereals

Hub of MILO products

2.5 MW of clean and renewable energy source from Aboitiz Power

Coffee Waste as fuel for boiler

• Waste in the form of spent coffee grounds, roasted chaffs, and coffee wash generated frommanufacturing coffee products are collected and fed into a atmospheric fluidized bed boiler.

150,000 kg of spent coffee grounds per day are used producing 20-ton per hour of steam energy.

Annual savings of more than 4,000 million liters of oil, reduced SOxemission by nearly 300 tons and prevention of 70,000 tons of waste.

Renewable Energy Source in other Nestlé Markets

• The UK and Ireland: since April 2016, our entire grid-supplied electricity in the UK and Ireland has been sourced from renewable sources, including wind

• Mexico: Nestlé Mexico currently meets 80% of its electricity needs through wind power, one of the first food companies in Mexico to do so;

• Spain: in 2015, Nestlé Spain sourced 85% of its electricity from renewable power sources, supported by green energy certificates. This has enabled us to avoid more than 20 000 tonnes of CO2 – emissions equivalent to more than 8230 return trips from Geneva to Sydney;

• Italy: in 2015, Nestlé Italy bought 100% renewable electricity.

Greening the Supply Chain

• Nestlé shares its best practices and assists its business partners (raw material suppliers, co-manufacturers, transportation provider, etc.) in raising environmental performance by incorporating environment protection into business practices.

• The program includes Environmental Management Systems Training, on-site visits, fora, and recognition.

Message from the Chairman

..."we are committed to being a leader in environmental performance.

This leadership is only possible through the collective commitment of the tens of thousands of individual Nestlé employees who, on a daily basis, work to make this a better planet on which to live."

Peter Brabeck-Letmathe