1. May 19, 2015 Nancy Himmelfarb NJH Sustainability Consulting himmelfarb.com Sustainable Procurement: It Matters!

2. © 2015 NJH Sustainability Consulting Sustainability Pressures in Food Industry TRANSPARENCY 2

3. © 2015 NJH Sustainability Consulting Sustainability Pressures in Other Industries 3 TRANSPARENCY

4. © 2015 NJH Sustainability Consulting Drivers of Sustainable Procurement Practices Financial Risks 87% Activism, incl. Social Media 67% Compliance w/ Laws & Regs. 93% CARROTS STICKS 4 Cost Reduction 81% Competitive Advantage 84% (Top 2 box) Brand Risk 96% Client/Consumer Support 93% Do the Right Thing 79% Source: “Sustainable Procurement: Time to measure value creation!”, Whitepaper based on HEC/EcoVadis2013 – 6th Sustainable Procurement Barometer

5. © 2015 NJH Sustainability Consulting Create Competitive Advantage Actively managing and planning for climate change => 18% higher ROI Investing in carbon reductions => 50% lower volatility of earnings over the past decade & 21% stronger dividends Investing across U.S. companies that performed better than average on GHG emissions => 73% better return over the past 5 years than the S&P 500 Systematic sustainability management => higher share price Sources: CDP S&P 500 Climate Change Report 2014; http://www.newsweek.com/understanding-newsweeks-2014-green-rankings-253545; Technomic (“Building a Better Foodservice Business through Sustainable and Responsible Practices”), Feb. 2014 5 Drivers of Sustainable Procurement Practices “Foodservice companies that respond proactively and creatively to critical consumer demands [around sustainability] will reap significant reputational benefits, enhanced profit opportunities and greater shareholder value.”

6. © 2015 NJH Sustainability Consulting Cultivate Client/Consumer Support Source: http://www.conecomm.com/2013-global-csr-study-release; http://www.conecomm.com/stuff/contentmgr/files/0/fdf8ac4a95f78de426c2cb117656b846/files/2013_cone_communicationsecho_global_csr_s tudy.pdf 6 96% of global citizens will have a more positive image of the company 94% will be more likely to trust the company 93% will be more loyal to the company 91% likely to switch brands to support a good cause (if similar price/quality) 92% would buy a product with a social and/or environmental benefit 67% have done so in past 12 months 90% would boycott a company for irresponsible business practices 55% have done so in past 12 months 96% of global citizens will have a more positive image of the company 94% will be more likely to trust the company 93% will be more loyal to the company 91% likely to switch brands to support a good cause (if similar price/quality) 92% would buy a product with a social and/or environmental benefit 67% have done so in past 12 months 90% would boycott a company for irresponsible business practices 55% have done so in past 12 months If a Company Supports Social or Environmental Issues: Drivers of Sustainable Procurement Practices

7. © 2015 NJH Sustainability Consulting Anticipate Resource Scarcity, Volatile Prices & Supply Chain Disruptions Sources: Global Risk Report (2015 Edition), World Economic Forum, Jan. 19, 2015; http://www.greenbiz.com/article/environment- economic-threat-business-risk-sustainability “The common denominator between water wars, climate change, social unrest and other direct and indirect consequences of environmental damage is economic risk.” 7 Drivers of Sustainable Procurement Practices

8. © 2015 NJH Sustainability Consulting Respond to Activism from NGOs, Social Media & Investors 8 Drivers of Sustainable Procurement Practices Shareholder Proposals “In a hyperconnected world, in which organizations are under greater scrutiny from all quarters, [global supply chain] transparency will be a critical attribute.” Source: “Megatrends 2015 – Making sense of a world in motion,” EY

9. © 2015 NJH Sustainability Consulting Sources: http://www.behindthebrands.org/en/company-scorecard; http://forest500.org/forest- 500/companies?f%5B0%5D=field_industry_sector%3A30 9 Activists Rate Companies Drivers of Sustainable Procurement Practices

10. © 2015 NJH Sustainability Consulting Source: http://www.ceres.org/resources/reports/feeding-ourselves-thirsty-how-the-food-sector-is-managing-global-water-risks 10 Scores on global water risk management: Drivers of Sustainable Procurement Practices Investor Groups Rate Companies Score /Company Agricultural Products: 29/Bunge 20/Chiquita Brands 7/Fresh Del Monte Beverage: 67/Coca Cola Company 44/Molson Coors Brewing 29/Brown-Forman 1/Monster Beverages Meat: 33/Smithfield Foods 11/Hormel Foods Corp. 9/Perdue Farms Inc. 8/Tyson Foods Score/Company Packaged Food: 70/Unilever 64/Nestle 57/General Mills 55/PepsiCo 54/Kellogg Co. 43/Mondelez International 31/ConAgra Foods 31/Keurig Green Mountain 27/J.M. Smucker 26/Hershey 13/Dean Foods 6/Kraft Foods Group 1/Pinnacle Foods *Companies scored on 0-100 point basis Score /Company Agricultural Products: 29/Bunge 20/Chiquita Brands 7/Fresh Del Monte Beverage: 67/Coca Cola Company 44/Molson Coors Brewing 29/Brown-Forman 1/Monster Beverages Meat: 33/Smithfield Foods 11/Hormel Foods Corp. 9/Perdue Farms Inc. 8/Tyson Foods Score/Company Packaged Food: 70/Unilever 64/Nestle 57/General Mills 55/PepsiCo 54/Kellogg Co. 43/Mondelez International 31/ConAgra Foods 31/Keurig Green Mountain 27/J.M. Smucker 26/Hershey 13/Dean Foods 6/Kraft Foods Group 1/Pinnacle Foods *Companies scored on 0-100 point basis

11. © 2015 NJH Sustainability Consulting Best Practices in Sustainable Procurement 11 1.Make a corporate commitment 1.Map your supply chain 2.Articulate priority issues & communicate expectations 1.Set performance standards & assess suppliers (baseline) 2.Monitor supplier progress & drive performance improvements 3.Participate in industry initiatives 4.Be transparent 1.Make a corporate commitment 1.Map your supply chain 2.Articulate priority issues & communicate expectations 1.Set performance standards & assess suppliers (baseline) 2.Monitor supplier progress & drive performance improvements 3.Participate in industry initiatives 4.Be transparent Checklist Standard Compliance Tools Are Not Enough

12. © 2015 NJH Sustainability Consulting Best Practices in Sustainable Procurement Consider Innovative Procurement Tools 12 Set ambitious long-term goals Use procurement as a tool for economic or environmental development Use procurement as a tool for economic or environmental development Adopt a total cost model or Environmental P&L Adopt a total cost model or Environmental P&L Enforce code of conduct & disclose supply chain problems Enforce code of conduct & disclose supply chain problems

13. © 2015 NJH Sustainability Consulting Best Practices in Sustainable Procurement Consider Innovative Procurement Tools 13 Include sustainability criteria in RFPs & supplier contracts Include sustainability criteria in RFPs & supplier contracts Partner with environmental groups for expertise, credibility & impact Partner with environmental groups for expertise, credibility & impact Be proactive in adjusting procurement strategies Be proactive in adjusting procurement strategies Know when to make only small changes, maximizing ROI

14. © 2015 NJH Sustainability Consulting Contact Information Nancy Himmelfarb NJH Sustainability Consulting www.himmelfarb.com nancy@himmelfarb.com Nancy Himmelfarb NJH Sustainability Consulting www.himmelfarb.com nancy@himmelfarb.com 14