Greenhouse gases

We are taking action to address our climate change risks, as well as working to create the opportunities these changes could present across our value chain. We combine actions to change our own business and value chain, with collective efforts and advocacy to help achieve the wider systems changes needed to create a low-carbon world. Our climate strategy is focused in a number of areas.

Reducing emissions in our supply chain

Around 27% of our GHG footprint comes from raw materials for ingredients and packaging. Mitigating the physical impacts of climate change is critical because we depend on raw materials sourced from countries that are particularly vulnerable to rising sea temperatures and changing weather patterns. An important step in mitigating this risk was the launch in 2018 of the renewed Sustainable Agriculture Code (PDF | 2MB) (SAC 2017), which has guidance on all aspects of Climate Smart Agriculture.

Our commitment to source 100% of our palm oil from sustainable sources is helping to avoid emissions from deforestation from agricultural commodity supply chains. We’re also encouraging the entire industry, including growers, traders, manufacturers and retailers to set and meet high standards of palm oil production, extending beyond current certification schemes.

In particular, we are focused on helping catalyse transformative change at the landscape or jurisdictional level in key regions of South-East Asia, South America, and West and Central Africa; and on ensuring – through our networks and relationships – that large-scale, performance-based payments for emissions reductions from forests are available to tropical forest countries. Find out more in protecting our forests.

Reducing emissions in our operations

Our own factories and sites are the parts of our value chain over which we have the greatest control. We've committed to becoming carbon positive in our operations by 2030. That means 100% of our energy will come from renewable sources – and we intend to directly support the generation of more renewable energy than we need for our own operations, making the surplus available to the markets and communities in which we operate.

Our Foods & Refreshment Division has prioritised reducing greenhouse gas emissions from ice cream freezers since 2008. As the world’s largest producer of ice cream, we have committed to accelerating the roll-out of freezer cabinets that use more climate-friendly natural (hydrocarbon) refrigerants.

Reducing emissions through product innovation

Over 60% of our GHG footprint occurs when consumers use our products. We’re using our knowledge and resources in innovation and R&D to bring people the products they enjoy but which also respond to the challenge of climate change, while creating business growth opportunities. For example, our concentrated liquid laundry detergents, such as Persil and Omo enable people to wash their clothes at lower temperatures, reducing GHG emissions by up to 50% per load.

Alongside our work on liquid detergents, we continue to lead the industry in developing lower-impact powders by removing or reducing phosphate – a key component with high GHG impact. We have eliminated phosphates in our machine dishwash products and reached a 95% reduction in the global use of phosphates across our laundry powders, resulting in lower CO₂ emissions of up to 50% per single consumer use.

A shift to vegetarian and vegan diets is also helping to reduce emissions. The business opportunity for natural and plant-based foods and beverages is significant as consumer demand grows. We have a range of vegan and vegetarian variants such as Hellmann’s vegan mayonnaise, Ben & Jerry’s non-dairy ice creams, Magnum vegan and other options. Two new brands – Love Home and Planet, a range of plant-based, home-cleaning products and Love Beauty and Planet, a natural hair and skincare product range – respond to the demand for vegan products. Find out more in innovating to reduce greenhouse gas emissions.

Advocacy and partnerships to drive systems change

Tackling climate change requires transformational changes to the broader systems in which we operate. For this, we need ambitious government policy that creates the right context for change and business action. It’s critical that organisations from all sectors work in collaboration, partnering on projects and initiatives to take action. Find out more about our external engagement on climate-related issues in global climate action.

We support the advocacy work of the We Mean Business and are actively involved in a number of other business-led initiatives such as WBCSD’s Low Carbon Technology Partnership Initiatives, RE100 which campaigns for renewable energy, the HRH The Prince of Wales’s Corporate Leaders Group and the B Team. We have publicly supported calls for carbon pricing and are a member of the Carbon Pricing Leadership Coalition, hosted by the World Bank.

We are signatories of the Caring for Climate initiative, led by the UN Global Compact together with UNEP and the Secretariat of the UNFCCC, which aims to shape the engagement of businesses with climate change. We are committed to engaging responsibly to help shape climate policy through positive lobbying and regularly review our trade association memberships to ensure alignment with our internal policy positions on climate change. In the last few years, incompatible trade association positions on climate change has been a factor in our decision to revoke membership of at least one trade association.

We recognise the importance of disclosing climate-related risks to, and opportunities for, our business. We have, therefore, adopted the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), of which our Chief Financial Officer, Graeme Pitkethly was the Vice-Chair, to aid understanding of the impacts of climate change on our business.

To understand these impacts, we performed a high-level assessment of the impact of 2°C and 4°C global warming scenarios in 2030. For more details on our scenario analysis, see pages 33–34 of our 2018 Annual Report & Accounts. We analysed the potential material impacts on Unilever’s business arising from each of these scenarios based on existing internal and external data. The impacts were assessed without considering any actions that Unilever might take to mitigate or adapt to the adverse impacts, or to introduce new products which might offer new sources of revenue as consumers adjust to the changing circumstances.

Our analysis shows that, without action, both scenarios present financial risks to Unilever by 2030, predominantly due to increased costs. However, while there are financial risks which would need to be managed, we would not have to materially change our business model.

The most significant impacts of both scenarios are on our supply chain where costs of raw materials and packaging rise, due to carbon pricing and rapid shift to sustainable agriculture in a 2°C scenario and due to chronic water stress and extreme weather in a 4°C scenario. The impacts on sales and our own manufacturing operations are relatively small.

The results of this analysis confirm the importance of doing further work to ensure we understand the critical dependencies of climate change on our business, and to ensure we have action plans in place to help mitigate these risks and thus prepare the business for the future environment in which we will operate.

During 2018, we developed and piloted an approach to assess the impact of climate change on our key commodities. We selected soy for this pilot based on its importance to Unilever (large purchased volume), with it being a high-profile crop in the countries where it is grown, and the availability of good historical price data and suitable climate models. Further details of this work can be found in our 2018 Annual Report & Accounts.

CDP is the world’s largest disclosure platform of environmental data for investors. We have been recognised by CDP for our efforts on climate change and supply chain – making the A List for CDP Climate and the Supplier Engagement Leader board. For CDP Forests, we achieved an A in Timber, Palm oil and Cattle and B in Soy. In CDP's recent Fast Moving Consumers report, we ranked first in the Household and Personal Care sub-sector.

We will halve the greenhouse gas impact of our products across the lifecycle by 2030.*

Incorporated into this target is our commitment to become carbon positive in own operations by 2030, by eliminating fossil fuels from our energy mix and switching to 100% renewable energy. We also intend to directly support the generation of more renewable energy than we consume, making the surplus available to the markets and communities where we operate.

Two of our GHG reduction targets are recognised as science-based by the Science Based Targets Initiative**:

• Halve the greenhouse gas impact of our products across the lifecycle by 2030 (this target covers all the phases across the lifecycle of our products: ingredients/raw materials, manufacturing, distribution, retail, packaging, consumer use and disposal).
• Reduce scope 1 and 2 greenhouse gas emissions by 100% from our own operations by 2030 (this is part of our ambition to become carbon positive in our manufacturing by 2030).

We have continued to develop products with a lower GHG impact, however the GHG impact of our products across their full lifecycle has increased by around 6% since 2010.^{* ∞} This is a slight improvement from 2017, when our GHG impact per consumer use was up 9% compared to 2010.

The increase in GHG emissions per consumer use is mainly because we have expanded our portfolio of hair and shower products via acquisitions. Our turnover has increased at a higher rate than our GHG emissions have grown, which is an indication of decoupling. As we make progress towards our 2030 GHG reduction target, we expect the extent of decoupling to accelerate.

We are having more success in areas that we can directly control. Although our factory sites achieved our CO₂ reduction from energy target in 2016 – four years ahead of schedule – they are continuing to cut CO₂ emissions from energy. Compared to 2008, CO₂ emissions from energy in our factories have fallen by 52%^† per tonne of production. In 2018, 67% of all grid electricity used in our manufacturing operations was generated from renewable resources.

We continue to reduce GHG emissions from refrigeration through the ongoing roll-out of climate-friendly ice cream freezer cabinets, which use hydrocarbon refrigerants rather than hydrofluorocarbon (HFC) refrigerants. By 2018, we had rolled out around 2.9 million climate-friendly ice cream freezer cabinets. Finally, CO₂ emissions intensity from transport has improved by 38% since 2010.

We’ve created a detailed plan to annually assess the feasibility for Unilever to reach our target to halve the GHG impact of our products across the lifecycle by 2030. This takes into account both external transitions towards a low-carbon economy as well as the latest available data and assumptions about our GHG footprint.

To reach our 2030 commitment of halving the GHG impact of our products across the lifecycle by 2030, we’re dependent on a wide range of external factors, such as the energy efficiency of consumer appliances, and the carbon intensity of the energy supplied to people’s homes – as well as consumer behaviour.

The amount of available renewable energy is increasing and the costs are falling rapidly. But, much of the world's infrastructure remains reliant on fossil fuels. For example, that means the electricity used to heat water, including the hot water used by our consumers, significantly contributes to GHG emissions.

We have a role to play to help advocate for policy and legislation which accelerates the transition to a low-carbon economy. Strong policy measures and carbon pricing – applying a cost to each tonne of carbon emitted is one of the most effective ways to encourage investment in low-carbon solutions – are needed to accelerate the transition. The removal of fossil fuel subsidies is also essential, as subsidies act as negative carbon prices.

* Our environmental targets are expressed against a baseline of 2010 and on a 'per consumer use' basis. This means a single use, portion or serving of a product.

** Two of our targets were approved by the Science Based Targets Initiative (SBTi) in 2017. We set our first science-based target in 2010, to halve the greenhouse gas impact of our products across the lifecycle by 2030. The second science-based target was introduced in 2015, aiming to source 100% of our energy across our operations from renewable sources by 2030.

^∞ The spreads business was sold in mid-2018 and is excluded from the performance measure (including the baseline) to ensure alignment with the existing business structure.

^†Independently assured by PwC