Global climate action
Climate change is one of the greatest challenges we face, as a society and as a business.
To tackle climate change we need transformational change – and fast
Climate change is already wreaking havoc today. Fires in the Amazon, California, Indonesia and, most recently, Australia are serving as a totemic reminder of the fragility of our ecosystems faced with a changing climate. Consumers, especially millennials and Gen Z, are alive to the unfolding crisis and risks of irreversible and catastrophic tipping points in the climate system and are mobilising to demand faster action. This is visible both in terms of activism such as the School Strikes for Climate movement founded by Greta Thunberg, and in an increase in demand for climate-neutral solutions such as renewable energy.
Tackling climate change requires transformational changes to the broader systems in which we operate. For this we need strong 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. We need continued leadership from businesses, governments, cities, states and regions to continue the virtuous cycle of action and ambition. We call this virtuous circle an ‘ambition loop’. This means continued leadership on deforestation, corporate commitments to action, such as science-based targets and zero pledges, policy reform to level the playing fields for renewable energy and financial disclosure and innovation to allow markets to correctly price risk and allow capital to flow to more sustainable investments.
Scaling up climate action
Globally, the response to climate action remains framed by the Paris Agreement, adopted by 196 countries at the COP 21 climate talks. They committed to set national plans that together would seek to limit the increase in global average temperature to well below 2°C above pre-industrial levels; and preferably 1.5°C, since this would substantially reduce the risks and effects of climate change.
Since the Paris Agreement in 2015, science has shown that limiting global average temperature rise to no more than 1.5°C is far preferable if we are to avoid the worst forecast effects of climate change. But this means that, globally, emissions must peak in 2020 and not later, we must achieve the Sustainable Development Goals (SDGs), and we must rapidly accelerate progress towards a net zero emissions world by 2050. It requires systemic change and industrial transformation never seen outside wartime, and fast.
This is an enormous task for the world. So we’re advocating for policies that advance the goal of the Paris Agreement to limit global temperature rises to 1.5°C, by the end of the century. We’re doing this through ambitious targets within our own operations and we announced in January 2020 that 100% of the electricity that we buy from the grid is now coming from renewable sources.
Nothing is more powerful than demonstrating to governments that accelerated progress in decarbonising the economy is actually possible. We are 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. 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. In 2019 our principal climate partners included the following:
Business Ambition for 1.5⁰C
Business Ambition for 1.5⁰C is an urgent call to action, led by a coalition of UN agencies, business and industry leaders. Countries are asked to set a deadline for ending their contribution to climate change, in the form of a legally binding net zero target. Businesses are asked to set science-based targets to reduce their targets on the same trajectory. 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, Unilever 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. Companies and countries making this commitment are also considered part of the Climate Ambition Alliance, launched by the Chilean government as part of the UN Climate Change Conference COP25 meeting, which took place in late 2019.
We Mean Business
We support the advocacy work of We Mean Business, a coalition of business groups including the World Business Council for Sustainable Development (WBCSD), BSR, Ceres, B Team, HRH The Prince of Wales’s Corporate Leaders Group, CDP and The Climate Group and supported by other networks. As a Corporate Advisory Group member of We Mean Business, we are helping to engage a record number of businesses around the world in committing to take action on climate change.
World Business Council for Sustainable Development (WBCSD)
The WBCSD is a CEO-led organisation of nearly 200 companies committed to sustainable business. We’re taking part in the WBCSD’s Low Carbon Technology Partnership Initiatives (LCTPi) to find business solutions to climate change. If implemented, the LCTPi could contribute 65% of the emissions reductions needed by 2030.
One such project is being run by the LCTPi REScale group, which is looking at how to scale the use of renewable energy. We have supported the development of a WBCSD guide to help businesses achieve 100% renewable energy sourcing through purchase power agreements.
United Nations Global Compact (UNGC)
We are a member of the UNGC’s Caring for Climate Campaign and we have implemented the UNGC’s Business Leadership Criteria on Carbon Pricing. We believe that carbon pricing is a fundamental part of the global response to climate change, and without it the world is unlikely to meet its GHG reduction targets. We also support the UNGC’s Guide to Responsible Engagement in Climate Policy, which calls for companies and trade associations to ensure their lobbying aligns with their public position on climate change.
Carbon Pricing Leadership Coalition (CPLC)
We are a member of The Carbon Pricing Leadership Coalition, which is 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. In 2018 we hosted a CPLC webinar in which we shared our own approach to internal carbon pricing.
World Economic Forum (WEF)
The WEF is an international institution committed to improving the state of the world through public–private cooperation. 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 in their own businesses and networks. 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 Glasgow in November 2020.
Our view on carbon pricing
A low-carbon economy will be better for consumers, businesses, supply chains and society – but getting there is challenging. Strong policy measures and carbon pricing – applying a cost to each tonne of carbon emitted, 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.
Since 2016, we have set our own internal price on carbon: €30 per tonne emitted, increasing to €40 per tonne in 2018. In January 2018, it increased as part of the business case appraisal for large capital expenditure projects. However, this didn’t change behaviour as we expected since energy costs – and consequently carbon costs – were largely immaterial to the capital costs over the assessed period.
As a result, we took the decision to end this shadow carbon pricing approach. Instead, we’ve applied a novel approach of internally taxing the notional capital expenditure budgets of our three Divisions – Home Care, Beauty & Personal Care and Foods & Refreshment – based on the emissions from the prior year. So far, over €120 million has been allocated to our Clean Technology Fund for energy, waste and water-saving projects. We increased our carbon price again to €50 per tonne in 2020 and expect it to increase to help achieve our 100% renewable energy across our operations by 2030 target.
Externally, we have consistently advocated in favour of carbon pricing policies. We worked with the World Bank Group to launch the Carbon Pricing Leadership Coalition in 2016, to advance carbon pricing and the removal of fossil fuel subsidies, and support the research and advocacy agenda of the Global Commission on the Economy and Climate. In 2019, we welcomed the report of the High Level Commission on Carbon Pricing and Competitiveness, which showed there was little evidence to support the view that carbon pricing damaged competitiveness – and that potential risks could be overcome by smart policy design.
The pricing of carbon, as well as the disclosure by companies of climate-related risks, is necessary to ensure the efficient functioning of markets. Internal carbon pricing can help businesses future proof themselves in a rapidly changing external context.
This work contributes to the following UN Sustainable Development Goals
The Natural Climate Solutions Alliance
Unilever was one of the founding members of the Natural Climate Solutions Alliance, 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.
We’re a member of RE100, 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. We have engaged by supporting the organisation’s campaigns and participating in policy-focused events in the UK and Brussels.
The B Team
The B Team, founded and led by global business and civil society leaders, aims to catalyse a better way of doing business for the well-being of people and the planet by adopting a Plan B for business rather than continuing with Plan A – business as usual.
In November 2015, we were one of 22 signatories of the B Team letter sent to global Heads of State, urging world leaders to set a long-term goal for net zero emissions by 2050. This goal is broadly aligned with the ambition to limit global temperatures to 1.5⁰C above pre-industrial levels, cited in the Paris Agreement.
In 2020, the B Team issued a progress report for the Net Zero by 2050 Campaign (PDF | 3.65 MB).
HRH The Prince of Wales’s Corporate Leaders Group
We are members of the HRH The Prince of Wales’s Corporate Leaders Group, which advocates climate change solutions with policymakers and businesses at the EU level and within EU member states.
In 2019, we met with UK government representatives as well as representatives of the Committee on Climate Change to successfully advocate for the adoption of a Net Zero by 2050 target for the UK. We also met with MEPs and EU member state and EU Commission representatives in 2019, under the auspices of the EU Green Growth Platform, to emphasise our support for the Commission’s vision of a Cleaner Planet for All and a climate-neutral Europe.
This follows our work in 2018, when we advocated for the European Union to raise its ambition level for climate action, including the adoption of a net zero by 2050 target.
Powering Past Coal Alliance
Led by the governments of Canada and the UK, the Powering Past Coal Alliance 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.
The Global Commission on the Economy and Climate
The Global Commission aims to analyse and communicate the economic benefits and costs of climate action and inaction. It has published extensive research showing that an accelerated transition to a low-carbon world can improve the quality of economic growth, diffusing some of the surrounding myths.
Climate action in the US
In 2017, the US Administration announced its intention to withdraw the US from the Paris Climate Agreement. Despite this change in position, we remain committed to advocating for legislation to address the need to reduce greenhouse gas emissions in the US and elsewhere.
We engage directly with the Business for Innovative Climate & Energy Policy (BICEP), a project led by the US NGO Ceres. BICEP advocates for meaningful energy and climate legislation that will enable a rapid transition to a low-carbon economy. Through lobby days and media engagement, we are proud to continue our support for policies necessary to limit the effects of climate change.
As a proud supporter of the 2015 Paris Climate Agreement, we were one of the first companies to sign the We Are Still In pledge – a public proclamation in coordination with other businesses, NGOs and state and local leaders in the US, showing we are committed to doing our part to meet the goals of the Paris Agreement.
We are also a founding member of the Climate Leadership Council. The Climate Leadership Council is an international policy institute founded in collaboration with a broad cross-section of business, opinion and environmental leaders to promote a carbon dividends framework as a cost-effective, equitable and politically viable climate solution in the US. At the state and local level, in partnership with other forward-thinking companies like Google, Facebook, Mars and Nestlé, we regularly advocate for renewable portfolio standards (RPS) and other policies that ‘green the grid’ in support of our ‘carbon positive by 2030’ ambition.
We played a prominent role in the 2018 Global Climate Action Summit co-chaired by California Governor Jerry Brown and businessman Michael Bloomberg. The Summit brought together leaders from state and local governments, business and citizens from around the world, to demonstrate how the tide has turned in the race against climate change, showcase climate action taking place around the world, and inspire deeper commitments from each other and from national governments – in support of the Paris Agreement.
This work contributes to the following UN Sustainable Development Goals