Sustainable sourcing

Growing for the future – sustainable sourcing has never been more important.

Palm oil farmer

The widespread adoption of sustainable agriculture is crucial if we are to feed over 9 billion people without depleting the planet’s natural resources. Sustainable farming methods have the potential to increase yields considerably, mitigate the effects of climate change and provide economic and social benefits to farmers, their families, and the surrounding communities.

The conversion of forests into agricultural plantations is one the major causes of deforestation. By using our scale and advocacy we are helping to drive transformational change whilst creating inclusive supply chains for smallholder farmers, who produce around 80% of the food consumed in emerging markets from Southern Asia to sub-Saharan Africa.

Sourcing sustainably helps secure our supplies, and reduces risk and volatility in our raw material supply chains. It also opens up opportunities for innovation: by focusing on people’s sustainable living needs and consumer preference, we build stronger brands. Sustainable farming methods can also improve the quality of our products, such as our sauces, soups, dressings or ice creams.

Our strategy

We remain committed to achieve our bold target to source 100% of our agricultural raw materials sustainably by 2020.

What do we mean by sustainable agricultural sourcing?

Sustainable agriculture means growing food in ways which sustain the soil, minimise water and fertiliser use, protect biodiversity and enhance farmers’ livelihoods.

When we began working on this issue over 15 years ago, there was no agreed definition. So we pioneered our Sustainable Agriculture Programme. We have since developed detailed guidelines for key crops, as each raw material has a different growing method. These are published in our Unilever Sustainable Agriculture Code (SAC) | 696KB, which we require all our suppliers to follow.

We define sustainable sourcing using 11 social, economic and environmental indicators: soil health, soil loss, nutrients, pest management, biodiversity, farm economics, energy, water, social and human capital, local economy and animal welfare. We also have a definition for sustainable paper and board materials. We have developed a metric for tracking sustainable sourcing of raw materials. This is defined as either raw or packaging material sourced from verifiable sustainable renewable sources, or made from recycled materials (% by weight).

Our Sustainable Agriculture Programme relies on compliance with our SAC and continuous improvement. This is done through self-assessment against the Code, or through external certification that meets or exceeds our own standards. For example, the Rainforest Alliance (RA) Certified™ seal provides reassurance to consumers that certified products are sourced from farms applying rigorous sustainability standards. RA supports our supplier development programme across all major tea producing countries. We helped establish the Roundtable on Sustainable Palm Oil (RSPO), made up of buyers, processors and plantation owners. This provides the standard for sustainable palm oil cultivation.

Our approach

We started with our top ten agricultural materials, accounting for around 70% of our total volumes and the materials our business depends on. We then started to consider the next eight materials which account for around 10% of our total volumes.

In 2014, we increased our efforts by setting out to drive transformational change in agricultural systems as a whole. In addition to the programmes we already have in place, we are championing smallholder farmers, the mainstreaming of sustainable agriculture, and the elimination of deforestation from supply chains.

We aim to create systemic change in agricultural systems by:

  • sustainably sourcing to the highest standards in our own operations first
  • driving change through continuous improvement policies with suppliers
  • raising awareness of sustainable sourcing amongst our consumers
  • playing a leading role in the transformation of agriculture sectors relevant to our business
  • developing a sustainable tea and palm oil industry
  • protecting biodiversity.

In 2014, we launched our Responsible Sourcing Policy (RSP) | 4.1MB and continuous improvement ladder for suppliers. This replaces our previous Supplier Code, and demonstrates a more rigorous and rewarding approach to responsible and sustainable sourcing. It includes, for example, promoting fundamental human rights.

Our commitment

We are committed to sourcing 100% of our agricultural raw materials sustainably by 2020.

Progress to date

We have made considerable progress since 2010, reaching 60% by 2015. We are starting to see this delivering benefits, for example our biggest brand Knorr now sources 92% of its top 13 vegetable and herb ingredients from sustainable sources for its sauces, soups and seasonings and is able to communicate with its consumers about its sustainable sourcing credentials.

Sustainable sourcing progress 2010 - 2015

Future challenges

Sustainable sourcing of all our agricultural raw materials remains an ambitious target, especially where our market influence is low because we buy small volumes. We will continue to work on the traceability and transparency of our raw materials’ supply, together with our suppliers.

We recognise that verification and certification are not end goals in themselves. The real challenge is to show the positive impacts that sustainability can have on the lives of farmers, their communities and the environment. We need to communicate the value of sustainable sourcing to consumers. In doing so, we will influence their buying habits towards sustainably sourced products and drive growth for our business.

Our vision is of a wider movement towards sustainable sourcing. To deliver on our ambition and drive transformational change, collaboration with partners is essential – our peers, sustainability experts, academics, governments, multi-lateral organisations and civil society organisations.

We will not reach our 2020 goal if others do not move with us to bring about this wider change. That is why we take an active role in industry collaborations such as Field to Market and the Sustainable Agriculture Initiative (SAI) Platform. We established the SAI Platform with Nestlé and Danone in 2002 to develop knowledge of sustainable agriculture - today it involves 80 companies from the food and beverage industry and communicates with a wide range of stakeholders.

A focus on palm oil

In 2009, Unilever was amongst the first companies to publicly commit to a long-term target to source 100% of our palm oil sustainably. For us, this means physically certified palm oil through both mass balance and segregated sources. We have been working hard to make this a reality, not only in our own supply chain, but across the entire industry.

In 2012, we announced that we reached our 2015 target to source 100% of our palm oil from sustainable sources three years ahead of schedule. This was achieved primarily through the purchase of GreenPalm certificates. GreenPalm is a trading programme that allows manufacturers and retailers to purchase one certificate from a grower certified by the Roundtable on Sustainable Palm Oil (RSPO) for each tonne of palm oil used.

Whilst we originally saw the purchase of GreenPalm certificates as an adequate entry point to the sustainable palm oil industry, we also recognise that it was only a first step. That is why in 2013, we announced our commitment that all palm oil bought will be traceable to known sources by the end of 2014, and will come from traceable and sources certified as sustainable by 2020. As we look at increasing our percentage of sourcing physically certified oil, we are carefully assessing the role of certificates in our supply chain.

By the end of 2015, 73% of the palm oil in our supply chain was traceable to known mills. In 2015 we accelerated sourcing of physically certified palm oil to 19% (up from 8% in 2014). Our remaining 81% is covered by GreenPalm certificates. We will phase out GreenPalm as we progress towards 100% physically certified oil by 2020.

Our progress on traceability and transparency for palm oil, as well as other commodities, is being enhanced through our partnership with the World Resources Institute (WRI), Proforest and Daemeter. Together we are implementing a robust traceability and risk verification system on the ground with WRI’s Global Forest Watch Platform. This is a dynamic online monitoring and alert system to help protect forests worldwide. It is the first platform to use the latest satellite technology, open data and crowd-sourcing to guarantee access to timely and reliable information about forests.

Timeline to achieve our targets:

From 2017, all of the palm oil we source will be traceable to known origins. Upstream suppliers would be required to provide independent third party verification that the palm oil supplied to Unilever meets the Principles outlined in our Sustainable Palm Oil Sourcing Policy if those sources are deemed high risks.

From 2018, all of the palm oil we source will be traceable to plantation. All non-smallholder sources of palm oil in our supply chain will be required to provide independent third-party verification to best practice standards that the oil supplied to Unilever meets the principles of our Sustainable Palm Oil Sourcing Policy. We will source all of our palm oil from physically certified or third-party verified sources.

By 2020, all of the palm oil suppliers in Unilever’s supply chain will have been verified by independent third parties to be compliant with the Sustainable Palm Oil Sourcing Policy and meeting high industry standards throughout their operations.

Transformational change - Discover how we’re driving transformational change by eliminating deforestation, championing sustainable agriculture and smallholder farmers, and improving water, sanitation and hygiene.

Downloads

Unilever Sustainable Living Plan, Mobilising Collective Action: Summary of progress 2015

Annual Report and Accounts 2015

Taking action

We seek to source our agricultural raw materials sustainably, acting as a catalyst for change across the palm oil and tea industries in particular.

Our approach to sustainable sourcing

Black soy bean smallholder farmer

Through our sustainable agriculture programme we are making progress in our efforts to source an increasing number of raw materials sustainably.

Sustainable tea - leading the industry

Tea farmer in Turkey

Tea is the most popular non-alcoholic beverage after water. As the leading global tea packer, we purchase around 10% of the world’s black tea and are leading the way in sustainable sourcing.

Inspiring consumers

Growing sustainably for Knorr

People want to trust the brands they use and, increasingly, understand the origins of the ingredients in the food they eat.

Working with others to make sustainable agriculture mainstream

Vanilla farmer

We are working with our partners to create a wider movement towards sustainable sourcing, one that will transform the agriculture industry.

Protecting biodiversity

Child and woman planting new trees

Working with our suppliers and farmers to protect biodiversity is central to our Sustainable Agriculture Programme.

Targets & performance

We have set targets for our top ten agricultural raw materials.

Sustainable sourcing

Our Commitment

By 2020 we will source 100% of our agricultural raw materials sustainably: 10% by 2010; 30% by 2012; 50% by 2015; 100% by 2020.

Our Performance

60% of our agricultural raw materials were sustainably sourced by the end of 2015. This means we exceeded our interim milestone of 50% by 2015.

Our Perspective

Half our raw materials come from farms and forests. The decisions we make on who we source from, and how we work with them, can have profound implications on global resources and climate change. They also have a wider social impact on human development, affecting the livelihoods of many.

By sourcing sustainably, we can protect scarce resources. We can ensure deforestation, land use and social and community issues are managed responsibly. For our business, sustainable sourcing means we ensure security of supply and reduce market volatility.

We are first concentrating on our top ten agricultural raw materials. These account for around two thirds of our volumes. They include palm oil, paper and board, soy, sugar, tea, fruit and vegetables, sunflower oil, rapeseed oil, dairy ingredients and cocoa.

By sharing information about where products come from, we are also meeting emerging consumer desires for more sustainable products. More of our brands are able to share their sustainability stories with our consumers: Fruttare is labelling its frozen fruit bars as sustainably sourced, Breyers has launched sustainably sourced vanilla for its ice cream, Magnum is using sustainable cocoa certified by Rainforest Alliance. Lipton is now sourcing 100% Rainforest Alliance certified tea for all its tea bags and Knorr is using more sustainably sourced vegetables and herbs.

In 2015 we had a slow-down in on-boarding our suppliers to our sustainable sourcing programme, so we are behind plan for our fruit and vegetable portfolio. These portfolios are highly complex and diverse: our challenge is to close all the gaps and include in our sustainable sourcing programme some complex materials which have few supply options. We anticipate reaching 100% sustainable sourcing for our fruit and vegetable portfolios by 2020.

We want to drive wider transformational change across industries and systems; working closely with others is essential to achieving this. We are determined to eliminate deforestation from supply chains – our own and those of others. Over 90% of globally traded palm oil is now covered by ‘no deforestation’ pledges. The challenge is to turn those promises into action, and that requires a transformational change in global systems.

  • Achieved: 4
  • On-plan: 11
  • Off-plan: 0
  • %of target achieved: 3

Our targets

Please see Independent Assurance for more details of our assurance programme across the Unilever Sustainable Living Plan.

Sustainable palm oil

  • We will purchase all palm oil from certified sustainable sources by 2015.

  • We will purchase all palm oil sustainably from certified, traceable sources by 2019.

(Target revised from 2020 to 2019 in 2016)

100% of palm oil from sustainable sources by end 2012: through a combination of certified segregated and mass balance supply and GreenPalm certificates.*

19% of palm oil purchased from certified, traceable sources (through RSPO mass balance** and segregated supply) by end 2015.

Our Perspective

We accelerated sourcing of physically certified palm oil to 19% (up from 8% in 2014). Our remaining 81% is covered by GreenPalm certificates. We will phase out GreenPalm as we progress towards 100% physically certified oil. In 2016 we brought forward our 2020 target to achieve palm oil from certified, traceable sources by 2019.

In 2015 we inaugurated our palm oil facility in Sei Mangkei, North Sumatra to support a more traceable, certified supply chain. Through a partnership with our supplier PTPN III, RSPO and IDH, we are engaging 600 independent smallholder farmers in a sustainability programme. The next phase is scaling this up to benefit up to 25,000 farmers.

Robust traceability is a crucial first step in protecting peat lands and forests. We are partnering with World Resources Institute, Proforest and Daemeter to assess risks and opportunities associated with the locations of mills in our supply chain. At end 2015, 73% of the palm oil reported in our supply chain was traceable to known mills.

** Actual split at end 2012: 97%‡ via GreenPalm certificates; and 3%‡ from certified, traceable sources (through a segregated supply).

* Definitions

Transforming the palm oil industry

Sustainable paper and board

We will source 75% of the paper and board for our packaging from certified sustainably managed forests or from recycled material by 2015. We will reach 100% by 2020.

98% of our paper and board came from certified sustainably managed forests or from recycled material by end 2015.

Our Perspective

2015 has been a challenging year as we have pushed hard to accelerate our target to reach 100%, whilst ensuring the robustness of our reporting process. 49% of our total volume was received with a third party certification claim and full chain of custody and has been independently assured by PwC for the first time in 2015.

However, there are challenges for our suppliers in providing verifiable evidence to support the make-up of uncertified products, which we will need to address. To this end, we will continue to increase the volume of certified recycled products we purchase.

We are confident that this degree of rigour is necessary, and have learned a great deal from this process. For example, an audit conducted by Proforest flagged particular issues with gathering sufficient evidence in Asia, which we will work to address. However, for the rest of our global supply we see high levels of reliability.

Independently assured by PwC.

Sustainable paper & board sourcing

Sustainable soy

We will source sustainably all soy beans by 2014 and all soy oils by 2020.

100% soy beans purchased from sustainable sources by end 2014.

43% soy oil purchased from sustainable sources by end 2015.

Our Perspective

We achieved our target to source 100% of our soy beans sustainably by 2014 (through the physical purchase of RTRS certified beans for our AdeS brand, expressed against our AdeS soy beans only baseline).

Our US pilot grew from just 44,000 acres under cultivation in 2013, to 100,000 acres in 2014 to over 400,000 acres in 2015. Unilever US announced it would source all its soy sustainably by 2017 – this represents 1 million acres.

43% of the soy oil we purchased was from sustainable sources (expressed against our soy oil only baseline). This includes Round Table for Responsible Soy (RTRS) certificates purchased to cover 100% of our Latin American soy oil and self-verified soy oil in the US.

In Brazil in 2015 we started a partnership with Santander, Yara Fertilizers, Bayer CropScience and Aliança da Terra to develop 100,000 acres of RTRS certified soy bean production.

Sustainable soy & oils

Sustainable tea

  • By 2015 we aim to have the tea in all Lipton tea bags sourced from Rainforest Alliance Certified™ estates.

  • By 2020, 100% of Unilever’s tea, including loose tea, will be sustainably sourced.

100% of the tea in our Lipton tea bag blends come from Rainforest Alliance Certified™ sources by end 2015.

Overall, 66% of the tea purchased for all our brands was sourced from sustainable sources: 64% was Rainforest Alliance Certified™ and 2% was trustea Verified.

Our Perspective

We buy around 10% of the world’s black tea and in 2007 we were the first major tea company to commit to sustainable sourcing of tea on a large scale. By the end of 2015, 100% of the tea in our Lipton tea bag blends and 66% of our volumes overall came from sustainable sources. Our continuous efforts to encourage our suppliers and farmers to produce sustainably mean we are on track to achieve our 2020 target for all our tea.

We continue to partner with suppliers such as McLeod Russel, Camellia and the Kenya Tea Development Agency (KTDA). In 2014 the KTDA achieved a significant milestone when all its factories completed the Rainforest Alliance certification process.

Today around 20% of the world’s tea production is Rainforest Alliance CertifiedTM. That’s over 900,000 tonnes of tea from around 900 estates and more than 740,000 smallholders.

Sustainable tea - leading the industry

Sustainable fruit and vegetables

  • We will purchase 100% of our fruit from sustainable sources by 2015.

  • We will purchase 50% of our top 13 vegetables and herbs from sustainable sources by 2012 and 100% by 2015. This accounts for over 80% of our global vegetable and herb volume.

6767% of fruit purchased sustainably by end 2015.

9292% of our top 13 vegetables and herbs purchased from sustainable sources by end 2015, up from 59% in 2012.

Our Perspective

We bought our first sustainable fruit in 2012. Progress has been slower than we would have liked and we have had some setbacks towards our 2015 target.

We have exceeded our interim milestone of 50% by 2012 (reaching 59%), but fruit and vegetables is a complex portfolio of materials with a very large and diverse supply base. These supply chain complexities made it difficult to achieve our 100% target across the entire portfolio by 2015.

Nonetheless we continue to work toward 100%, working in partnership with peers across the industry to cover the entirety of our supply base.

Independently assured by PwC.

Sustainable fruit & vegetables

Sustainable cocoa

We will source cocoa sustainably for our Magnum ice cream by 2015. All other cocoa will be sourced sustainably by 2020.

98% of cocoa for Magnum sustainably sourced through Rainforest Alliance certification by end 2015.

Overall, 60% of all cocoa sourced sustainably.

Our Perspective

Magnum is our biggest ice cream and is on sale in 52 countries, with all but two of them now sourcing Rainforest Alliance CertifiedTM cocoa.

At 98%, we were very close to reaching our interim milestone for Magnum by the end of 2015. We are working hard to complete the final 2% conversion to Rainforest Alliance CertifiedTM cocoa.

We remain on track towards our 2020 target of sourcing all our cocoa sustainably, increasing from 46% in 2014 to 60% in 2015.

Sustainable cocoa & sugar

Sustainable sugar

We will source all sugar sustainably by 2020.

60% of sugar sustainably sourced by end 2015.

Our Perspective

We verify sugar beet against our Sustainable Agriculture Code and use Bonsucro certification for sugar cane. In 2015 our sustainably sourced sugar volumes reduced to 60%, down from 64% in 2014.

In Europe we continued to make good progress on sugar beet, partially driven by a trial of the SAI Platform’s Farm Sustainability Assessment (FSA), a common code for the industry. Significant volumes in Germany, Sweden and Poland have been successfully incorporated into the FSA.

On cane sugar we continue our dual strategy of creating more physical capacity on the ground whilst continuing to purchase credits.

While acting individually we have been struggling to create momentum and capacity on the ground. To unlock this, we continue as an active member of Bonsucro and are looking for potential partners who can support our sustainability objectives. We are convinced that we remain on track and will see more momentum in 2016.

Independently assured by PwC.

Sustainable cocoa & sugar

Sustainable sunflower oil

We will source all sunflower oil sustainably by 2020.

45% of sunflower oil sustainably sourced by end 2015.

Our Perspective

We have made good progress in sustainably sourcing our sunflower oil. We have increased our volume from 37% in 2014 to 45% in 2015 by rolling out our practices with our partners Cargill and ADM.

Our sustainable sourcing strategy is continuously evolving. For example, we set ourselves the ambition of achieving 100% sustainable sunflower oil from our supply base in Russia by 2015. However, as we took on more suppliers during the year - giving us the opportunity to include a larger group of farmers and suppliers in our sustainable sourcing programme – this also meant that we did not reach our 2015 ambition.

Sustainable soy & oils

Sustainable rapeseed oil

We will source all rapeseed oil sustainably by 2020.

76% of rapeseed oil sustainably sourced by end 2015.

Our Perspective

In 2015, the vast majority of our European rapeseed volumes were sourced sustainably. This includes the oil for our German Rama spreads (via self-assessment), and Hellmann’s mayonnaise in the UK. It also covers all our Flora range in the UK. The majority of these volumes are being sourced locally from growers located near our manufacturing plants.

Increasingly brands such as Rama and Flora are telling consumers about the benefits of these changes, through factory open days, publicising healthy recipes and linking up with popular TV shows.

Sustainable soy & oils

Sustainable dairy

We will source all dairy produce sustainably by 2020.

59% of dairy produce sustainably sourced by end 2015.

Our Perspective

We made good progress, increasing from 51% in 2014 to 59% in 2015, thanks to purchases from a number of suppliers across the Nordics, the UK and improved results of our suppliers in the US.

In 2015 we initiated a pilot in India with World Animal Protection, looking initially at the animal welfare, feed and water practices of smallholders.

We continued our efforts to convert industry sectors towards sustainable sourcing, building on our success in Australia and Ireland – where since 2013 and 2015 respectively, the dairy sector has programmes that are equivalent to our Sustainable Agriculture Code (SAC). In Europe, we have benchmarked sustainability programmes with some of our larger suppliers, showing that they are equivalent to our SAC - which has enabled significant growth in our sourcing of sustainable dairy.

We are looking next at what we can achieve in Turkey and Russia.

Sustainable dairy

Fairtrade Ben & Jerry's

All flavours of Ben & Jerry’s ice cream will be Fairtrade certified by 2013.

7777% of Ben & Jerry’s ice cream flavours achieved Fairtrade certification in 2013. We reached 100% in 2014.

Our Perspective

Ben & Jerry’s ice creams were the first to use Fairtrade (FT) ingredients in 2005. By the end of 2011 in Europe, we achieved Fairtrade certification for all our products produced and distributed in Europe.

In 2012, due to issues around quality and availability, we found we could not source all the FT-certified ingredients we needed for a global conversion. So we revised our target from our previous ‘all ingredients’ to ‘all flavours’ certified.

We identified that by using FT ingredients for the five major commodities in all our base mixes and for our chunks and swirls, and following proper Fairtrade derogation procedures, all our ice cream flavours would qualify for Fairtrade certification by 2013. We reached 77% in 2013.

In 2013 we also decided to source only non-GMO ingredients by seed source. As this added complexity to our conversion programmes, we delayed our plans, achieving FT-certification for all our flavours in 2014.

Sustainable dairy

Cage-free eggs

We aim to move to 100% cage-free eggs for all our products,* including Ben & Jerry’s ice cream and Hellmann’s, Amora and Calvé mayonnaises.

45% of eggs were cage-free by end 2015.

Our Perspective

Our research shows that consumers prefer products made with cage-free eggs. We use eggs in mayonnaises, dressings, sauces and ice cream. However, the conditions in which eggs are produced vary widely around the world. We take animal welfare seriously as a social and ethical concern.

In Western Europe, Hellmann’s, Amora and Calvé have been 100% cage-free since 2009, and once we completed the conversion of our supply chain in Eastern Europe, all of our European products were able to use cage-fee eggs by 2014.

Ben & Jerry’s ice cream has used only cage-free eggs in Europe since 2004; by the end of 2011, 99% of all eggs used in Ben & Jerry’s ice cream mix worldwide were cage-free too.

We continue to make good progress with our North American supply base - reaching over 60% of our egg requirements originating from cage-free sources by the end of 2015.

Sustainable dairy

Sustainable sourcing of office materials

By 2013 we will source all paper-based office materials for our top 21 countries from either certified sustainable forests or recycled sources.

100% of paper-based materials from certified sustainable forests or recycled sources by end 2013.

Our Perspective

Our commitment covers office paper products such as printer paper, note books and envelopes. By using paper from sustainable or recycled sources, we avoid using wood from non-sustainable sources, helping our aim to end deforestation.

We achieved our target in 2013, when 100% of our paper-based office materials for our top 21 countries came from either certified, sustainable forests or recycled sources. All our suppliers sign a certificate of compliance, and we monitor compliance via quarterly reporting. Where necessary, we have changed from non-sustainable products to sustainable products.

We then extended our ambition from the top 21 countries to all other countries in Europe and Latin America, with the aim of reaching 100% compliance by the end of 2015, which we achieved.

We are reviewing the global supply market during 2016 and will decide if we can further extend our commitment to cover countries in Africa and Asia during 2016-2017.

Sustainable paper & board sourcing

Key

  • Achieved
  • On-plan
  • Off-plan
  • Of target achieved
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