Using our voice for a zero carbon future
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Climate change is one of the greatest challenges we face. We’re calling on everyone – businesses, governments and international alliances – to come together to tackle it.
The race to achieve a zero carbon economy and society must be a collective effort, and business alone cannot drive the transition at the speed that is required. So we’re calling on all governments to set ambitious net zero targets, as well as short-term emissions reduction targets, supported with enabling policy frameworks such as carbon pricing.
Global climate leadership
Progress on our own climate change targets mean nothing in an overheated world. We advocate for national climate policies that advance the Paris Agreement on Climate Change to limit global temperature increases to well below 2°C, and ideally no more than 1.5°C above pre-industrial levels, by the end of this century.
We believe the world must reach net zero emissions by 2050, and preferably much earlier – to avoid the worst effects of climate change. We’ve set our own goal for net zero emissions from our products by 2039. If we’re to avoid climate change wreaking havoc, global emissions must peak in 2020 and not later, we must achieve the UN’s Sustainable Development Goal 13 for climate action, and we must rapidly transition to a net zero economy.
This is an enormous task. Nothing is more powerful than demonstrating to governments that accelerated progress in decarbonising the economy is actually possible.
That’s why we’ve set ambitious goals to eliminate emissions from our operations, to achieve net zero emissions from our products from sourcing to point of sale, and to halve the greenhouse gas emissions from consumer use of our products.
We’re also working in partnership with others to scale up action around the world through multiple private sector groups and coalitions. We take part in events such as the United Nations intergovernmental climate summits and, when possible, advocate directly to heads of state, ministers and government organisations on the importance of climate action. And, we have asked the trade associations of which Unilever is a member, to confirm that their lobbying activities are in line with the Paris Agreement . We support policies that accelerate change towards a low-carbon economy, drive growth and reduce risk.
We work with many other businesses, international institutions and partners.
International climate advocacy
We use our voice to advocate for international climate action and we collaborate with our peers and partners through various international alliances. These include:
We Mean Business
We support the advocacy work of We Mean Business, a coalition of influential business groups and we’re a member of its Corporate Advisory Group to engage a record number of businesses around the world in taking action on climate change.
The World Business Council for Sustainable Development (WBCSD) is a CEO-led organisation of nearly 200 companies committed to sustainable business. We’re part of its Low Carbon Technology Partnership initiatives (LCTPi) to find business solutions to climate change.
World Economic Forum (WEF)
Alan Jope, our CEO, is a member of WEF’s Alliance of CEO Climate Leaders, which advocates ambitious action on climate change. The group meets annually in Davos to collaborate to drive action on climate change and Alan participated in the CEO Climate Leaders Meeting in January 2020, leading a discussion on how to raise ambition for the UN Climate Conference, COP26, which will be held in 2021.
Business Ambition for 1.5°C
We were one of the first companies to commit to and set a science-based target for reducing emissions in line with the 1.5°C ambition of the Paris Agreement. At the UN Secretary General’s Climate Action Summit, our CEO, Alan Jope, was honoured with an Ambitious Climate Leader Award by Lise Kingo, Executive Director of the UN Global Compact, for making this commitment.
UN Global Compact (UNGC)
We’re a member of the UNGC’s Caring for Climate Campaign and we have implemented the UNGC’s Business Leadership Criteria on Carbon Pricing. We also support its Guide to Responsible Engagement in Climate Policy.
Transform to Net Zero
We are a founding member of Transform to Net Zero, a partnership between nine companies including Unilever. Together we aim to deliver guidance and business plans to enable a transformation to net zero emissions, as well as research, advocacy and best practices to make it easier for the private sector not only to set ambitious goals – but also deliver meaningful emissions reductions and economic success.
Issue-specific climate alliances
We’re a member of RE100 Opens in new window, a campaign to encourage organisations to set goals to be powered by 100% renewable energy and in 2019 were elected to serve on the campaign’s Advisory Committee Opens in new window. We support the organisation’s campaigns and participate in policy-focused events in the UK and Brussels.
Powering Past Coal Alliance
Led by the governments of Canada and the UK, the Powering Past Coal Alliance Opens in new window brings together countries and companies committed to an accelerated phase-out of coal as a fuel source in the energy mix. Unilever was the first company to join the coalition, which aligns with our own target to have zero coal used in our factories by the end of 2020.
Carbon Pricing Leadership Coalition
Hosted by the World Bank, the CPLC brings together leaders from government, the private sector and civil society to share experience of implementing carbon pricing and promote effective carbon pricing systems and policies.
Natural Climate Solutions Alliance
Unilever was one of the founding members of the Natural Climate Solutions Alliance Opens in new window, convened by WEF and WBCSD, which launched at the WEF Annual Meeting in Davos 2020. The NCSA is a multi-stakeholder alliance committed to developing best practice approaches to scaling nature-based solutions to the climate crisis.
Our position on carbon pricing
Carbon pricing – the concept of applying a cost to each tonne of carbon emitted – is a way to encourage investment in low carbon solutions and accelerate the transition to a low carbon economy.
Over the past five years, we have experimented with different forms of internal carbon pricing schemes, including a programme which 'taxed' divisional capital expenditure budgets in order to create a Low Carbon Fund to accelerate clean tech investment at our sites.
As we move into the final decade of our operational decarbonisation plan, we are replacing this approach with an explicit commitment to ensure that all of Unilever's capital expenditure is aligned with the achievement of our 1.5 degree aligned targets. In practice, this means that we will not finance assets within our operations which are inconsistent with achieving a 100% reduction in Scope 1 and 2 emissions by 2030.
Externally, we have consistently advocated in favour of carbon pricing policies and we signed the World Bank’s carbon pricing statement to encourage the others to do the same. We’re part of the Carbon Pricing Leadership Coalition Opens in new window. We also support the removal of fossil fuel subsidies, as these act as negative carbon prices.
Transparency on climate change risks and impacts
We support the aims of the Task Force on Climate-related Financial Disclosures (TCFD) Opens in new window and believe that businesses should communicate the risks and opportunities that climate change brings.
TCFD provides a framework to improve the disclosure of consistent, comparable, reliable, and clear climate-related financial information so that investors can make better capital allocation decisions in support of the transition to a low carbon economy. We’ve adopted the TCFD’s recommendations from the start, to help stakeholders understand the impacts of climate change on our business.
Results from our climate change scenario analysis
We use scenario analysis to understand the potential impact of climate change on our business, in line with the TCFD’s recommendations. This informs our strategy and financial planning.
We’ve made a high-level assessment of the impact of 2°C and 4°C temperature increases from climate change in the year 2100. Carried out in 2017, the analysis focused on the impacts on our business in the year 2030.
The results showed that there are financial risks to our business by 2030 in both scenarios, mostly from increased costs. But these risks can be managed, and we don’t need to significantly adapt our business model.
Without action, climate change presents financial risks to Unilever by 2030. While there are financial risks which need to be managed, we would not have to materially change our business model.
The most significant impacts in both scenarios are on our supply chain. Costs of raw materials and packaging rise, due to carbon pricing and a rapid shift to sustainable agriculture in a 2°C scenario. Chronic water stress and extreme weather affect supply chain costs in a 4°C scenario. The impact on sales and our own manufacturing operations is relatively small.
Climate change impacts on key commodities
We’ve looked into the impacts of climate change on our supply chain in more depth. We modelled the impact on some of our key agricultural commodities: palm oil, soybean oil and black tea. We predicted future crop yields and prices using crop-specific climate models, with help from the Potsdam Institute for Climate Impact Research.
Overall the results showed that there is little direct financial risk to our business – although there were some higher risks modelled for black tea. In general, for the specific commodities and countries we modelled, climate change could increase crop growth.
We’re one of the largest buyers of palm oil in the consumer goods industry. Our modelling showed a low direct financial risk of climate change impacting our palm oil supplies. Yields would likely increase over 2030 to 2050, and prices could go down by between 18% and 42%.
Soybean oil is a crucial ingredient in many of our food products. Our forecasts showed future soy yields will likely increase in 2030 to 2050 from climate change, lowering prices between 2% and 12%. The direct financial risk to our business is low.
We’re the world’s biggest black tea company. Our modelling showed average tea yields will increase due to climate change. But there are risks of lower yields and higher prices in Kenya and Argentina. We’re developing more drought-resilient natural tea varieties and working with farmers to improve sustainable practices.
We report in more detail on climate change scenarios, our deep-dive commodity analysis and the actions we’re taking to minimise these risks in the Unilever Annual Report & Accounts.
Our commitment to climate transparency means we have participated in CDP since it was founded in 2000. We publish our submissions for the CDP investor questionnaires each year: