Water: Quality, Quantity, and the Need for Innovative Technologies

GUIRR MeetingJune 30, 2010

Kevin MathewsDirector Health and Environmental Affairs

Nestle Waters North America

WATER is the Oil of the 21st Century• Oil prices have fallen from their recent peaks, but

concerns about the availability of freshwater show no sign of abating.

• Global water consumption is doubling every 20 years at an unsustainable rate of growth

• Water, unlike oil, has no substitute.• For businesses, water is not discretionary. Without

it, industry and the global economy falter.

WHO World Population Estimates

2030 Estimate8.2 Billion

2010 Estimate6.8 Billion

Source: UN, Water a shared responsibility,New York 2006

Already today:

Regions where water withdrawals exceed natural supply

WORLD POPULATION DENSITY CENTERS

China and India account for 40% of World’s Population

Water at the right time, In the right form, In the right place:

Availability in monsoon regions

Monthly rainfall; Mangalore, IndiaMonsoon

Nestlé SASMS and the Mineral Water Interest Group Berne 1 June 2010 PBL/Ob/tv # 6

At the right time, In the right form, In the right place:

Water Scarcity 2030

Nestlé SASMS and the Mineral Water Interest Group Berne 1 June 2010 PBL/Ob/tv # 7

Nestlé is the world’s largest food and beverage company

Nestlé ~ 1.5%

The 20 largest food companies account for less than 9% of the world market

480 factories in 86 Countries around the world

Enhance quality of life by bringing nutrition to all consumers everywhere

• 10,000 different products • Around 1 billion products sold every day

Nestlé Perspective on the Water Issue

• Total world-wide freshwater withdrawal: 4 250 000 billion liters (Domestic 10%,Industry 20%,Agriculture 70%, Nestlé 0.004%, Nestlé Waters 0.0009%)

• We are a comparatively small user of water– And are committed to continually reducing our impact – While contributing to overall better water management as the

most effective solution to the water crisis

The Nestlé Commitment to Water Sustainability

• On July 5, 2007, Nestlé Chairman and five other world business leaders launched “The CEO Water Mandate”

• U.N. Global Compact project designed to help companies better manage water use in their direct operations and throughout their supply chains

• Companies pledge to make progress in six areas: – Direct operations– Supply Chain and Watershed management– Collective action– Public policy– Community engagement– Transparency.

• Additionally, they agree to address water shortages and sanitation:– Set water-use targets– Assist suppliers with water-efficiency practices– Partner with governments, policy makers and

community groups

CEO Mandate Framework

June 2010

CEO Water Mandate Framework launched at the UN Global Compact Leaders Summit in New York.

Managing Water Resources for Long-Term Sustainability

Monitoring Our Sources

• Data collected manually and electronically, to manage spring resources

• Balance over the long-term water withdrawal and natural recharge through rain and snowmelt.

Long-term monitoring diagramof a typical spring site

• Certification program developed by the U.S. Green Building Council.

• Factories designed to conserve water, reduce waste and wastewater, GHG emissions to lessen environmental impact

• 7 factories are LEED certified today….more tomorrow.

Reducing NWNA Supply Chain FootprintLEED (Leadership in Energy and Environmental Design)

Nestlé Progress in Environmental Sustainability: Water

• Since 1998, Nestlé has increased its food production volume by 76%.• Over the same time period we have reduced our water withdrawal by 28%. • Target is to reduce annual consumption per ton of product by 2%-3% over the next five years

Nestle Waters Global Initiative:

Global Environmental Footprint (GEF) Assessment Tool

Tracking our FootprintLife Cycle Sustainability

• Life Cycle Assessment• “Cradle to Grave”

– Multi-material– Considers the whole supply chain– From raw material and primary energy provision to end-of-life

disposal of the product• Impacts

– Water resources– Primary energy– Greenhouse gases emission, etc.

• Assessment Results– Liters of water consumption per liter of product

Nestle Waters Global Environmental Footprint Tool

resin & other packaging production

NWNA distribution bottle disposalraw materials& primary energy

249 Primary Packaging Production 516 Liters

Supply Chain

- 181 Packaging recycling landfill / incineration

120 Resin Pellets

86 Caps & Labels

350 Film & Corrugates

15 Film & Pallets

81 Finished Products

2 Packaging

43 PET Bottles

- 181 End of Life

83 Transport

365 Secondary / Tertiary Packaging Production

1348 Liters

Internal Operations

1000 Water Bottled

348 Industrial Losses

1864 Liters

Life Cycle Water ConsumptionPer 1000 Liters of 0.5L Eco-shape Bottled Spring Water

Water for AgricultureFrom Water Shortage to Food Shortage

• An Issue of strategic importance for Nestlé……and beyond

• Solutions to overcome water shortage are possible…and urgent:

• No one-dimensional approach

Water for food farming:One liter per calorie

Worldwide average: 3,000 litres of freshwater withdrawn to grow the daily food per person

Quelle: Peter H. Gleick, in: Water International, 21 (1996) 83-92; and Ismael Serageldin in www/the-world-around-water.net

Other consumer goods with embedded water from agricultural production:• textiles from natural fibres,• leather, • furniture, • paper, • etc.

The Meat Coefficient:

Water required = 10 times the need for plant-based calories and proteins

Animals transform only 5-15% of plant calories into meat.

As a result: water requirement for average diet:

Tunisia 2,964 l/person/day (share of meat in diet : 27%)

California 5,908 l/person/day (meat: 64%)Source: A. Zehnder, Swiss Federal Institute of Aquatic Science and Technology ETHZ 1999

Changing Diet: China’s Meat Consumption

1961-2001 (in grams per capita per day)

Source: FAO online database; calculations A. Le Vernoy, SciencePo Paris 2007

Comparison

Spain 320 gUSA 342 gNZL 389 g

Huge potential for water savings:

Theoretical versus actual freshwater withdrawals for food farming

For example: growing a balanced daily meal, 2,500 Kcal/per capita, 20% meat:

Actual withdrawal of freshwater3000 - 4000 liters

theoretically necessaryto grow this amount of food Potentialin a water-efficient manner for savings1900 liters of freshwater 40%-70%

Source: Zehnder, ETHZ and www.the-world-around-water.net

Biotechnology: Salt and drought tolerant plants

Drought toleranceRIKEN Plant Science Center, Thailand

Salt and frought tolerant riceProfessor Ray Wu, Cornell

International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in Hyderabad, India

Biogas digester:Nestlé assisting Chinese Farmers

Less water pollution

Biogas for households

Fertilizer

Nestlé’s SustainableAgriculture Initiatives

•Map

Nestlé SASMS and the Mineral Water Interest Group Berne 1 June 2010 PBL/Ob/tv # 26

Creation of a nature conservation zone partnership > 400 Ha above and beyond the legally planned conservation area!

-Collaboration with local players (agriculture, etc.)-Sustainable development of agricultural practice-Preventive protection of water resources

ECO-Broye ProjectHenniez Switzerland

Project Aggravair Vosges, France

A collaborative effort between industry, farming and the towns for the preservation and sustainability of water aquifers

VIDEO

A Few Solutions

• Improve the efficiency of water use in operations

• Stretch scarce water supplies much further through efficient management and modern technology on the farm

• Collaborate at the local, state and federal level to preserve and protect water sources

• Advocate fair water pricing without price supports to discourage water waste