Unilever sees sustainability supporting growth
London/Rotterdam - Growing evidence that integrating sustainability into Unilever’s business is driving growth, cost efficiency and resilience for the future.
Four years into its ambitious and wide-ranging Sustainable Living Plan, Unilever says it is making a growing and positive impact on its business in terms of growth, cost efficiency and resilience for the future. At a time when more and more companies are talking about ‘brands with purpose’, Unilever has put some definition and measurement behind what it calls ‘sustainable living brands’ – meaning brands that contribute to one or more of the Unilever Sustainable Living Plan goals and have a sustainable living purpose.
Many of Unilever’s brands that have led the way on sustainable living, such as Dove, Lifebuoy, Ben & Jerry’s and Comfort, are achieving above average growth, with high single and double digit sales over the past three years.
These findings were shared with sustainability specialists from NGOs, government, academia and business gathered at Unilever’s London headquarters, to review progress on the fourth year of the Unilever Sustainable Living Plan.
Paul Polman, Unilever CEO, said: “In a volatile world of growing social inequality, rising population, development challenges and climate change, the need for businesses to adapt is clear, as are the benefits and opportunities. This calls for a transformational approach across the whole value chain if we are to continue to grow.
“Consumers are recognising this too, increasingly demanding responsible business and responsible brands. Our experience is that brands whose purpose and products respond to that demand – ‘sustainable living brands’ – are delivering stronger and faster growth. These brands accounted for half the company’s growth in 2014 and grew at twice the rate of the rest of the business.”
The business case also now extends to the investment community, which is becoming increasingly aware of the risks and opportunities of managing in a new economic ecosystem where the interdependencies are more complex and unpredictable. This is evidenced by the growing number of institutions moving capital into businesses that will help realise a low-carbon future. Governments too are responding to the forthcoming climate negotiations in Paris in December with robust national plans to cut greenhouse gas emissions.
The Company confirmed that it is on track to meet most of the Unilever Sustainable Living Plan goals, which it set in 2010. The consumer element of the reducing environmental impact goal remains more challenging, and heavily dependent on wider market shifts. But Unilever has started to decouple its environmental footprint from its underlying sales growth.
Within the Company’s supply chain, there is promising progress. More than 55% of Unilever’s agricultural raw materials are now sustainably sourced, reducing the risk to supply - more than half way to its 2020 target of 100%. It has achieved its target of zero non-hazardous waste to landfill across its factory network, and is making significant reductions in CO2 from energy and water in manufacturing, reducing them by 37% and 32% per tonne of production respectively since 2008.
Against the ambitious target to help improve the health and well-being of over 1 billion people by 2020, Unilever is nearly 40% of the way (397 million) to reaching it. The Company has also enhanced the livelihoods of over 1 million people so far, having helped and trained 800,000 smallholder farmers since 2010 and provided 238,000 women with access to training, support and skills.
‘Sustainable living brands’ now represent half of Unilever’s growth and are growing twice as fast as its other brands. A growing number of its leading brands have integrated sustainability into the contribution they make to the world - their purpose – and into their products’ ingredients and lifecycle. The ‘sustainable living brands’ are evidence of Unilever’s Purpose in action - making sustainable living commonplace.
Unilever is committed to working to bring about transformational change throughout the whole value chain and to developing further its portfolio of ‘sustainable living brands’ in a way that meets the needs of consumers. It will continue to systematically measure its brands’ sustainability performance, using the learnings from this to drive further progress.
A detailed report on the progress made against the targets set out in the Unilever Sustainable Living Plan and Unilever’s approach to transformational change is available online at: unilever.com/sustainable-living.
In November 2010, Unilever set out the Unilever Sustainable Living Plan, committing to a ten year journey towards sustainable growth. Today, Unilever confirmed it is on track to meet most of the goals.
The Plan has three big goals to reach by 2020:
• Help more than 1 billion people improve their health and well-being
• Halve the environmental footprint of its products and de-couple environmental impact from growth
• Source 100% of agricultural raw materials sustainably and enhance the livelihoods of millions of people
By the end of 2014, Unilever has reported the following measurable updates to its Sustainable Living Plan:
Sustainable living brands
The company explained its rigorous approach to defining, measuring and monitoring ‘sustainable living brands’ as a combination of measurable contribution to one or more of its sustainability targets in the product lifecycle and a clear sustainability-linked purpose. It outlined a widening in the brands that classify as ‘sustainable living brands’ in their portfolio for 2015:
Dirt is Good, which includes Omo and Persil, whose purpose is about helping more children have access to the quality education they need to reach their full potential. Called the Preparing Children for Tomorrow Initiative, it will be rolling out globally through the rest of 2015 and beyond.
Vaseline is teaming up with international NGO Direct Relief to help heal the skin of 5 million people living in vulnerable situations by 2020, including people caught up in natural disasters and in refugee camps.
Sunlight, Unilever’s oldest brand, which aims to reduce the burden of the millions of women who spend 200 million hours every day finding, fetching and carrying water and to free up their time. After successfully piloting two Sunlight Water Centres in Nigeria in 2014, in partnership with Oxfam, where women can safely get clean water, wash their clothes and dishes, and buy affordable everyday products without walking long distances, Sunlight plans to scale this up in 2015.
Sourcing and working across our value chain
Over 55% of Unilever’s agricultural raw materials are now sustainably sourced, more than half way to its 2020 target of 100%, and after 4 years, the Company is nearly 40% of the way (397 million) to reaching the target of helping to improve the health and wellbeing of over 1 billion people by 2020.
While greenhouse gas emissions have reduced in Unilever’s operations, across their value chain they have increased by 4% since 2010. While disappointing, underlying sales growth of 21% over the same period shows Unilever has started to decouple its environmental footprint from its sales growth.
Driving transformational change
To make a transformational difference to systems it operates within, Unilever is focusing its efforts on three areas where it is using its scale, influence and capabilities to catalyse change:
ending illegal deforestation caused by commodity supply chains, which causes up to 15% of the world’s total greenhouse gas emissions;
mainstreaming sustainable agriculture by helping smallholder farmers improve their yields and livelihoods;
improving health by making water, sanitation and hygiene (WASH) more accessible.
Ending deforestation linked to commodity supply chains and ensuring sustainable supplies of agricultural ingredients are strategic priorities for Unilever as a business, for combatting climate change, for global food security and for human development.
In 2014 Unilever championed the UN Declaration on Forests, in which over 170 governments, NGOs and multinational companies agreed to halve deforestation by 2020 and end it by 2030.
Continued progress across the palm oil industry in tackling deforestation with more than 90% of global traded palm oil now covered by zero deforestation commitments
Championing sustainable agriculture
To mainstream sustainable agriculture, Unilever is focusing on key commodities where it has the most influence and on helping smallholder farmers to improve their yields and livelihoods.
The company has helped and trained around 800,000 smallholder farmers since 2010 and announced a string of partnerships in 2014 to scale up its work in this area, including with IFAD, Solidaridad, Acumen and Clinton Giustra Enterprise Partnership, GAIN, Oxfam and the Ford Foundation.
With leading brands in the in-home water purification, toilet cleaning and health soap product categories, making water, sanitation and hygiene commonplace is both a human development and market development opportunity. Unilever is applying its advocacy to encourage universal access to safe drinking water, sanitation and hygiene to be adopted as an SDG and offered its support to Indian Prime Minister Modi’s ‘Clean India’ campaign, which aims to end open defecation by 2019.
Unilever is also working with a number of partners to scale up its WASH programmes, including DFID, Wateraid, PLAN, WSUP and the Children’s Investment Fund.
Unilever has made cumulative cost avoidance of over €400m through eco-efficiency measures in its factories since 2008.
In addition to this, last year (2014) Unilever made over €200m of savings through manufacturing, logistics, material efficiencies and research and development which can be attributed to the Unilever Sustainable Living Plan.
Future proofing the supply chain in a world of finite resources: In 2014, 55% of Unilever’s agricultural raw materials were sustainably sourced, ensuring supply.
Unilever is one of the world’s leading suppliers of Food, Home and Personal Care products with sales in over 190 countries and reaching 2 billion consumers a day. It has 172,000 employees and generated sales of €48.4 billion in 2014. Over half (57%) of the company’s footprint is in developing and emerging markets. Unilever has more than 400 brands found in homes around the world, including Persil, Dove, Knorr, Domestos, Hellmann’s, Lipton, Wall’s, PG Tips, Ben & Jerry’s, Marmite, Magnum and Lynx.
Unilever was ranked number one in its sector in the 2014 Dow Jones Sustainability Index. In the FTSE4Good Index, it achieved the highest environmental score of 5. It led the list of Global Corporate Sustainability Leaders in the 2014 GlobeScan/SustainAbility annual survey for the fourth year running, and in 2015 was ranked the most sustainable food and beverage company in Oxfam’s Behind the Brands Scorecard.
Unilever has been named in LinkedIn’s Top 3 most sought-after employers across all sectors.