Our manufacturing sustainability strategy
We are reducing the greenhouse gas emissions, waste and water impacts of our manufacturing operations as our business grows.
How are we achieving our targets?
To achieve our ambitious manufacturing eco-efficiency targets, such as those relating to our carbon positive commitment, we are focusing on five areas of change:
- Increasing use of data to identify new opportunities
- Embracing new technologies and promoting best practices
- Empowerment of our teams to implement projects
- Increasing access to our capital investment fund
- Increasing the efficiency of our global and regional procurement processes
Our World Class Manufacturing programme
Our World Class Manufacturing (WCM) Programme builds on our existing Total Productive Maintenance (TPM) tools and techniques and focuses on integrating sustainability through continual improvement and investment in efficient equipment and new technologies. This covers more than half our production cost and environmental footprint.
Within the target setting process, every factory is given improvement targets. This helps to measure their performance against our sustainability performance indicators, to ensure that sustainability is part of what we do each day and that the link between eco-efficiency and better factory performance is clear.
Every year we ring-fence capital investment for projects that reduce energy, CO2, water use and waste that deliver the strongest environmental and financial benefits. This is generated through our internal carbon penalty on CO2 emissions from our manufacturing sites.
Training, awareness and best practices
Everyone in our company has a part to play in reaching the targets in our Unilever Sustainable Living Plan (USLP) and we can learn a lot from each other.
For instance, we’ve found that a practice from one factory can often be easily replicated elsewhere, reducing equipment purchasing and design costs. It means we can also leverage our global scale, sharing ideas, inspiring our colleagues to think outside of the box.
Amanda Layne, Operator of 2nd Shift, Goiania Brazil.
“Energy-conscious consumption training opened my eyes, enabling me to propose ideas for electrical energy reductions in the factory. I learned that a small change in attitude could drive improvements in the environment in which we live.”
We have a central Best Practice Portal, with over 360 environmental replicable examples which range from methods for using data to drive energy reduction, through cost effective sludge dewatering initiatives to large scale wastewater recycling technologies.
Sources of GHG emissions by type (2018)
Our manufacturing sites use different sources of energy depending on their production processes and geographical location. The chart below shows our latest GHG emissions from energy sources used by our manufacturing sites, together with other site GHG emissions (refrigerant losses, effluent treatment and waste to landfill).
Investing for a sustainable future
In March 2014, Unilever issued a £250 million Green Sustainability Bond, inviting investors to support our vision for sustainable growth while investing in Unilever credit. The four-and-a-half year bond was a first for Unilever, the first green bond in the sterling market and also the first to be issued by an FMCG company. Proceeds have been used on projects linked to greenhouse gases, water and waste targets in the Unilever Sustainable Living Plan and the bond was repaid on 19 December 2018.
We worked with independent sustainability service provider DNV GL to develop a Green Sustainability Bond framework which provides clarity and transparency around the Environmental and Use of Proceeds criteria. Together these criteria meet the guidance given in the Green Bond Principles (comprising Voluntary Process Guidelines for Issuing Green Bonds dated 13 January 2014) that there should be a robust process and disclosure by an issuer to facilitate understanding of the characteristics of a bond by investors and others in this area.
This is the fifth and final Unilever Green Sustainability Bond Report for the year to 31 December 2018.
Projects benefiting from proceeds of the Bond:
- Home Care South Africa: Our factory at Anderbold, Johannesburg, South Africa produces home care brands for the domestic market. The site design employs eco-efficiency improvements including rainwater harvesting, water recycling, daylight harvesting and LEED building certification. The site became fully operational in 2017.
- Home Care China: An investment in Chengdu, Sichuan, China is Unilever’s eighth factory in the country. The site, which produces laundry powders, brings eco-efficiency improvements including water recycling, a biomass furnace, LED lighting and LEED building certification. The site became fully operational in 2017.
- Beauty and Personal Care Turkey: A new multi-category factory in Selçuklu-Konya, Turkey producing brands employing eco-efficiency measures such as rainwater harvesting, water recycling, solar water heating and LEED building certification. The site became operational during 2018.
- Refreshment: This project further strengthens the environmental credentials of our ice cream cabinets at the point of sale through the purchase of HFC-free freezer cabinets using natural hydrocarbon refrigerants (HC). Freezers have been purchased for distribution and operation and this project is completed.
- Spreads US: An extension to an existing factory in Johnson County, Kansas, US (subsequently sold in July 2018 as part of the disposal of Unilever’s spreads business. The design for this site introduces many eco-efficiency features such as energy efficient drives and lighting, heat recovery from steam and refrigeration systems and LEED building certification. The site became fully operational in 2017.
Unilever Green Sustainability Bond assurance statements
The Spreads factory in the US, the Home Care factory in China and the Home Care factory in South Africa have each achieved all of the relevant environmental criteria for greenhouse gases, water and waste.
The Home Care and Beauty & Personal Care factory in Turkey meets the relevant environmental criteria for greenhouse gases and waste; whilst not fully meeting the water target in its current early operational phase this factory has demonstrated that it is capable of meeting the water criteria on the basis of the production volumes in the design forecast for the factory.
The Home and Personal Care factory in Turkey continues to monitor and improve its water usage.
- These statements have been independently assured by DNV GL – see DNV GL Independent Limited Assurance Statement – Unilever Green Bond 2018 (PDF | 747KB) to read the DNV GL assurance statement and which also lists the relevant environmental criteria.
In the report on the Green Sustainability Bond as at 31 January 2018, Unilever confirmed that all of the net proceeds of our Green Sustainability Bond:
- Have been managed according to the Use of Proceeds Criteria*; and
- Have been spent with the above projects to fund actual project expenditure*.
In addition, in the previous report on the Green Sustainability Bond as at 31 December 2015, Unilever confirmed that the HFC freezer cabinets meet the relevant environmental criteria for such freezers.
*KPMG LLP provided limited assurance in accordance with ISAE 3000 - see Downloads to read the KPMG LLP assurance report.
Bringing a lightbulb moment to life
Our Clean Technology Fund helps turn the sustainable business ideas of our employees and factory teams into reality. Ideas are evaluated according to environmental benefit and financial return and we expand the best ideas to our factories around the world.
In 2018, we invested €40 million in energy, CO2 and water saving projects through our Clean Technology Fund. Together the projects will reduce our global CO2 emissions by 4.0%, global energy use by 3.4% and water use by 3.3%. The projects will achieve an average payback period of less than three years. Examples of projects funded include a biomass boiler in Ghana to reduce use of fuel oil and a process to recover and reuse waste water in Ecuador.
Our successful eco-efficiency projects are known as Best Practices. We’ve found that a practice from one factory can often be easily replicated elsewhere. This helps speed up the delivery of environmental benefits and inspire new ideas.
By consolidating our procurement through global, regional or national contracts we can achieve environmental improvements in a cost-effective way.
While we are reducing our energy intensity, we are scaling up our use of renewable energy. By the end of 2018, 111 of our manufacturing sites across 36 countries were using 100% renewable grid electricity, accounting for 67% of our total grid electricity consumption. Where it is not possible to produce our own renewable electricity on our sites, we have a mixture of direct purchase agreements with large-scale solar, geothermal or wind installations, and with small-scale hydropower schemes and renewables via purchased International Renewable Energy Certificates (IRECs).
Increasingly, governments are allowing the expansion of markets which is enabling this change. For example, in 2018 around 90% of the electricity used across our factories, distribution centres and offices in Mexico has been produced from wind power. In the Philippines, we are now sourcing all of our electricity from a geothermal power plant.
This table summarises our energy and renewable energy use since the implementation of the USLP in 2010.
|Total energy use (GJ)||33,176,585||30,181,865||30,480,293||30,054,697||28,422,211||27,080,563||27,267,621||26,507,528||25,907,758|
|Renewable energy use (GJ)||5,278,522||6,549,465||7,442,875||8,114,768||7,986,641||7,663,799||8,616,568||8,899,486||9,495,335|
Always seeking further energy savings
When it comes to energy savings, there's never a point at which we'd say “enough”. Not only do further efficiencies reduce our GHG impact on the environment, but they often also reduce our business costs.
So we're still searching for efficiencies, despite the fact that since 2008 we've reduced CO2 emissions from our operations by 52% per tonne of production - and met the target we set in 2010 four years ahead of schedule. And since we set that target our ambitions have grown. In 2015 we announced our ambition of becoming carbon positive in our operations by 2030 - and energy efficiency and emissions reduction remain critically important.
We have a multi-faceted approach to cutting our energy use and reducing CO2 emissions across our manufacturing network.
- Taking a World Class Manufacturing (WCM) approach, which involves energy loss analysis and focusing on improvement projects, such as how we can use heat more efficiently to reduce our energy use.
- Encouraging our people to adopt small actions such as ensuring lights and equipment are turned off when they are not in use.
- Investing in our employees’ ideas to reduce GHG emissions through our global ‘Clean Technology Fund (formerly ‘Small Actions Big Difference fund’).
- Replicating eco-efficiency projects, our ‘Best Practice’ projects, in other factories. We share best practice tips, such as lagging pipes to reduce heat loss, through ‘Simple Solutions’, our eco-efficiency awareness programme.
- Running environmental workshops in factories with a large environmental footprint.
- Investing in additional monitoring, metering and reporting of energy use at our sites to track performance and identify further opportunities to reduce energy use.
- Ensuring that any equipment replacements are of a higher eco-efficiency standard
Over €600 million of cost avoidance
Reducing energy emissions isn’t just about reducing our environmental impact – it also makes good business sense. We collect financial information through our Environmental Performance Reporting system for all manufacturing sites and by each energy and water type, which enables us to measure the economic benefits of our eco-efficiency programme.
Hazardous & non-hazardous waste
In 2014, we achieved zero non-hazardous waste to landfill (ZWL) in our global factory network.ӿ This means that the non-hazardous waste that was previously sent to landfill is now reused, recycled or recovered. We report our manufacturing waste performance since 1995 in our Sustainability performance data.
In 2018, we reduced the volume of total waste sent for disposal by 97%† per tonne of production compared to our 2008 baseline.
Of the total waste we produce – including both hazardous and non-hazardous waste that is recycled, recovered or disposed⁰ – 97%† was reused, recycled or recovered. In 2016, we started to measure waste reuse separately, and found we reused 38,000 tonnes of waste. In 2018, we reused over 110,000 tonnes of waste.
In 2018, disposed hazardous waste increased by 9% per tonne of production compared to 2017 but was 65% lower per tonne of production than in 2008. In 2018, our hazardous waste accounted for 0.6% of our total waste and remains a small component of our waste footprint.
Waste is classified as hazardous or non-hazardous according to local legislation in the locations where each of our factories operate. What constitutes hazardous waste differs between countries and definitions can change frequently. We are continuing to reduce both our hazardous and non-hazardous waste as part of our continuous improvement programmes. In our Tultitlan factory in Latin America we supply the waste mineral oil from our process to cement kilns where it is used as an alternative fuel replacing fossil fuels, this practice is in place in several other factories globally. In the Boksburg factory, South Africa the oil filters from machines are sent to specialist recycling companies where the metal, oil and other components are recycled.
⁰ Landfill is used for waste where legislation mandates or there are no available alternatives.
ӿ We aim to maintain our achievement of zero non-hazardous waste to landfill (ZWL) across our manufacturing sites worldwide. However, incidents can occur where small amounts of non-hazardous waste are sent to landfill in error or because of operational changes e.g. acquisitions or supplier issues. We consider ZWL is maintained when less than 0.5% of non-hazardous waste is disposed to landfill in the 12-month period.