Half our raw materials come from agriculture and forestry. We buy significant volumes of some crops, for example we buy around 12% of the world’s black tea, 3% of the world’s tomatoes for processing and around 3% of the palm oil produced.
Our top ten agricultural raw material groups account for around two-thirds of our volumes.
How do we measure sustainable sourcing?
We have developed a metric for the sustainable sourcing of raw materials. This is defined as either raw or packaging material sourced from verifiable sustainable renewable sources or made from recycled materials (as a % by weight).
A roadmap for delivery
We have made good progress on the sustainable sourcing of our top ten agricultural raw materials. 36% of our agricultural raw materials were sustainably sourced by the end of 2012. This exceeded our interim milestone of 30%, and marks a significant rise from 24% in 2011. We have plans in place to increase our sustainable sourcing to 50% by 2015 and 100% by 2020.
Sustainable sourcing of all our raw materials remains an ambitious target, especially where our market influence is lower because of our smaller volumes.
We started with our top ten agricultural materials and are now considering the next 30. These account for around 20% of our volume, so progress in these areas will mark a significant milestone. In 2012 we made considerable progress with ingredients such as vanilla and meat.
We recognise that verification and certification are not end goals. The real challenge is to show the positive impacts that sustainability can have on the lives of farmers, the environment and the communities in which they live and work.
These issues are complex to tackle. Working with others is a critical success factor: by transforming global supply chains together, we can move faster and also increase awareness among consumers of the benefits of sustainably sourced products.
Our non-agricultural (and therefore non-renewable) raw materials have also been a focus in 2012. We have been mapping the landscape for mineral mining to identify sustainability improvements and we now have visibility on the origins and extraction sites for about half our portfolio. We have also looked into existing initiatives and programmes to reduce the environmental, health and safety impacts of the raw materials we use (‘product stewardship programmes’).
What do we mean by sustainable agricultural sourcing?
Each of our agricultural raw materials, whether tea, tomatoes or soy, has a different growing method. When we began working on this issue, there were no agreed definitions of what sustainable farming meant for these and other crops. We established our Sustainable Agriculture Programme over 15 years ago. In that time, we have developed detailed guidelines on what sustainable agriculture means for our key crops.
We define sustainable sourcing using 11 social, economic and environmental indicators:
Soil health: improving the quality of soil and its ability to support plant and animal life.
Soil loss: reducing soil erosion which can lead to loss of nutrients.
Nutrients: reducing the loss of nutrients through harvesting, leaching, erosion and emissions to air.
Pest management: reducing the use of pesticides.
Biodiversity: helping to improve biodiversity.
Farm economics: improving the product quality and yield.
Energy: reducing the greenhouse gas emissions associated with farming.
Water: reducing the loss and contamination of water supplies from agriculture.
Social and human capital: ensuring the capacity of people to earn and sustain their livelihoods as well as enhancing farmers’ knowledge, training and confidence.
Local economy: helping sustain local communities.
Animal welfare: ensuring animal standards are based on the ‘five freedoms’ defined by the Farm Animal Welfare Council.
We also have a clear definition of sustainable sourcing for paper and board materials. See Sustainable paper & board.
Unilever Sustainable Agriculture Code
Our sustainable sourcing programme relies on compliance with the Unilever Sustainable Agriculture Code, either through self-assessment and verification against the Code or through external certification standards that we recognise as equivalent to the Code, such as those of Rainforest Alliance or the RSPO. Through mandatory and good practice standards it defines a process of continuous improvement.
In 2011 we published our Responsible and Sustainable Sourcing Standards Guide for our Supply Partners. It describes the role of responsible supply chains in creating a sustainable business and how by working together with others we will deliver responsible sourcing more effectively.
Over the last 15 years we have developed leading-edge sustainable farming practices that have been tested on all our key agricultural raw materials and compiled into the Unilever Sustainable Agriculture Code (USAC).
This Code applies to all our suppliers of agricultural raw materials, the farmers producing them and contractors working on farms. Suppliers must comply with the Code’s Scheme Rules, which detail external certification standards and self-verification methods. We published these Rules in 2012. Implementation Guides help farmers put our Code into practice.
2012 was our first year of getting to scale and gave us deeper insights about suppliers’ challenges. We have now sustainably sourced tomatoes, dairy, rapeseed, sunflower seed, sugar beet and potatoes, demonstrating the Code’s flexibility across crops and countries.
See Downloads for more information.
Our aim is to ensure continued access to our key agricultural raw materials and communicate the value of sustainable sourcing to consumers and influence their buying habits.
We expect all our suppliers of agricultural raw materials to commit to improving their sustainability and to demonstrate that they adopt minimum standards and improve performance over time.
Meeting the criteria for sustainable sourcing
We use a variety of ways to ensure that our supplies of raw materials meet our sustainable sourcing requirements. We can do this either through third-party certification, or through a combination of self-verification and performance reporting.
We are working with certification organisations such as Rainforest Alliance (for tea and cocoa), the Roundtable on Sustainable Palm Oil (for certified sustainable palm oil), the Round Table on Responsible Soy (for certified sustainable soy),Fairtrade (for Ben & Jerry’s ice cream ingredients) and Bonsucro for the sustainable sourcing of sugar. See Agricultural Sourcing Partnerships for more information.
However, external certification is not an option available to us in all cases. Sometimes these standards do not apply to all types of raw materials or geographies. And it is very difficult for us to work with hundreds of different national and crop-specific schemes. Where certification standards do not exist, our approach is to supplement our certified partnerships with a system based on self-verification following the standards in our Sustainable Agriculture Code.
For some of our crop suppliers, we are using Quickfire, a software tool which allows our suppliers to carry out a self-assessment against each of the 11 indicators which make up our Sustainable Agriculture Code.
The tool quickly calculates whether or not a supplier’s volume counts as being sustainably sourced and identifies areas of best practice and areas for improvement, providing a basis for us to build a collaborative action plan for continuous improvement. It also collects data that allows us to measure the impacts of sustainable sourcing.
We began using this system in 2009 with our third-party suppliers of fruit and vegetables. By the end of 2012, more than half our suppliers had self-verified their practices according to the Unilever Sustainable Agriculture Code.
This process is being reviewed by an independent external advisory board to ensure that it is an adequate basis for self-verification. We intend to complement our system by carrying out third-party auditing. This will provide verification of what our suppliers enter into the online system.
Tools to improve sustainable farming
In 2010 we launched our Cool Farm Tool, a calculator to help farmers reduce their carbon emissions on their farms. In addition to raising awareness of the effect their actions have on the climate, the tool prompts farmers to make improvements, which often cut bills as well as benefiting the planet.
We developed Cool Farm with experts from the University of Aberdeen in Scotland. It is designed to be simple and practical to use, allowing farmers to identify the changes that will have an impact on reducing emissions. It also allows farmers to prioritise options by running different scenarios to see how much of an impact they make. Cool Farm takes account of a wide variety of factors including soil, climate, livestock, land use and input intensities, then presents the user with measures that can be implemented at the field and farm level.
To encourage wider use of the tool in the agricultural sector, we have made it available for other companies to use free of charge. Nearly 20 companies are using the tool. We also use our web-based tool, EIGER, which provides maps giving detailed information about agricultural raw materials, biodiversity, water, GDP and population.
EIGER helps us to identify new supply chains and new supply routes to ensure a secure supply of raw materials over the long term. It identifies opportunities and risks posed by global environmental and social trends that we need to consider when making sourcing decisions.
New sourcing countries: where do crops grow best, now and in the future?
Water vulnerability: which areas suffer water scarcity or will do so in the future? What is the irrigation water demand for our crops?
Biodiversity impacts: are existing or new sites and supply chains close to or inside biodiversity conservation areas?
The database was compiled using data from a range of R&D organisations and institutes.
In 2012 we published detailed Scheme Rules to provide clarity on how and when we class a particular purchase of agricultural raw materials as ‘sustainably sourced’.
With regard to land rights in our palm oil supply chains, Unilever is committed to the principle of Free, Prior and Informed Consent. This principle is included in the UN Declaration on the rights of Indigenous People and the UN Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries & Forests in the context of National Food Security. Unilever supports the implementation of these guidelines by national authorities.
For other commodities including sugar, tea and soy, Unilever has now endorsed the same approach and will require our suppliers to follow our commitment in order to protect the land rights of local communities.
Unilever will be transparent on the progress made with our suppliers in our annual Unilever Sustainable Living Plan Progress Report. We will also disclose the top three suppliers and countries of origin for these key commodities.
Laying the foundations of our Sustainable Agriculture Code
Unilever has been carrying out research into sustainable agriculture since the mid-1990s. Our Lead Agriculture Programmes have investigated a range of techniques to reduce the environmental impact of farming, while maintaining yield and profits for farmers.
We started with a focus on five key crops – palm oil, peas, spinach, tea and tomatoes. While some of these programmes continue today, we have now extended our work into other crops and ingredients, for example fruit and vegetables, gherkins, dairy, eggs and vegetable oils.
Throughout we have worked closely with local growers and planters, research institutes, industry and farmers’ associations, local government, NGOs and sometimes community groups.
We began publishing these techniques for all our key crops in Good Agricultural Practice Guidelines. In 2004, we started engaging our growers in the use of these Guidelines, in co-operation with other partners. This led to several changes and improvements leading up to the publication of the Unilever Sustainable Agriculture Code in April 2010.
Livestock implementation guidelines
Our Livestock Implementation Guidelines can be downloaded from this page. The Livestock Implementation Guides have been recently completed with the help of our external partners FAI Farms (Farm Animals Initiative). These replace the current Dairy Implementation Guides, extending the advice to cover meat as well as dairy. Species covered are cattle (for dairy and beef), pigs (for pork) and chickens (broilers for meat and layers for eggs). The advice covers the full range of SAC chapters, giving specific advice for livestock farming on issues such as manure management and reduction of GHG emissions, and gives more detailed, species-specific information for the Animal Welfare chapter.
As well as the Sustainable Agriculture Code coverage, there is an additional guide for the transport and slaughter of animals. This is outside of the current scope of the SAC, but will be included in the next version, as both are important in terms of animal welfare. We are pre-empting these revisions with guidance for suppliers ahead of time.
Oxfam report: Behind the Brands
On 26 February 2013 Oxfam released their ‘Behind the Brands’ report, as part of the GROW campaign on food security. In the report, which is based on publicly available information, Oxfam assesses the social and environmental impact of the ten largest branded food and beverage products companies worldwide.
Unilever tops the scorecard on the issues of Farmers (including small-scale farmers) and Workers (including farm workers). The report recognises the progress Unilever has made in its policies and practices under our Sustainable Living Plan and Sustainable Sourcing Programme including the areas of Water Use and Climate Change.
The Oxfam report places emphasis on greater transparency and on the importance of the role of Women and Land rights. We welcome this as we have highlighted these two issues ourselves by our CEO Paul Polman putting them on the agendas at the B20/G20 meetings and the WEF Task Force on Food Security.
We will continue to work on the traceability and transparency of our raw materials supply, together with our suppliers, in order to meet the targets of our Sustainable Living Plan. We believe that brand manufacturers are part of the solution to provide sustainable food and nutrition security. Meaningful progress can only be made, however, when all relevant stakeholders including primary producers, first processors, traders, retailers, civil society and governments, work together in this area.