Moving to a circular economy

We want to move to a circular economy, enabling more packaging to either remain in loops or have the best possible opportunity to be recycled.

What is a ‘circular economy’?

‘Circular economy’ means designing products so that resources are used in a cyclical way. Materials can be regenerated and constantly flow round a ‘closed loop’ system, rather than being used once and then discarded.

We are looking at ways to embed circular thinking into our innovation process, focusing on unlocking new consumer offerings by completely re-thinking the way we design products. The potential benefits of this approach are clear both for business and the environment – less material use means less cost and less waste. It means new sources of value for customers and consumers, better risk management of raw materials, and improved or different approaches to the supply chain.

Our approach

Modular packaging, design for disassembly and reassembly, wider use of refills, recycling and using post-consumer recycled waste all contribute to the move to a circular economy.

Through our global partnership with the Ellen MacArthur Foundation we are piloting circular economy practices within the FMCG industry and looking at how we can utilise circular economy thinking. In each of our four product Categories – Personal Care, Foods, Home Care and Refreshment - we have chosen at least one project that focuses on bringing circular economy to life. We can then apply our learnings across Unilever.

Training our teams in circular economy thinking

During 2015, we organised training sessions on the circular economy approach, covering a wide range of internal functions and categories. We continue to encourage our managers to complete an Executive Education course on circular economy thought leadership and practical business application by Bradford University School of Management and the Ellen MacArthur Foundation.

We also hosted workshops to scope out projects focussed on circular economy principles. In 2016, our focus will be on driving our projects as a proof of principle to engage and embed circular economy thinking across the organisation. We will roll-out the programme internally, applying innovation to bring radical new offerings to the market in the future.

Recycling & using recycled materials in our packaging

In 2015, we reinforced our commitment to making our packaging more recyclable by taking our packaging engineers to recycling facilities so they could see first-hand some of the challenges. This followed our ‘Design for Recyclability’ guidelines, which we launched in 2014. We are now exploring new innovations and approaches that will enable us to move further towards a circular economy.

We have started to use more recycled materials in our packaging. In many markets, high-quality, post-consumer recycled material (PCR) is difficult to source, and is often sold at a premium. Increased manufacturer demand for post-consumer recycled materials will produce an increasingly attractive business case for re-processing services, and will act as a catalyst to increase the collection and re-processing of materials.

Using ‘recycled PET’ in our plastic bottles

We are increasingly using recycled materials such as high-density polyethylene (HDPE) and polyethylene terephthalate (PET) in our plastic bottles, even though factors such as the availability of high quality waste materials, legislation on food contact and creating a viable business case make this challenging.

In Argentina, we manufacture over 30 million bottles of dishwash detergent per year for brands such as Cif and Ala. This requires around 750 tonnes of PET. During 2013, our team replaced PET with 40% recycled PET (rPET). Trials have been very successful and we launched the bottles across Argentina, Chile and Uruguay during 2014. In 2015 we used 25% of rPET in the manufacturing of our portfolio of fabric conditioner bottles in some European markets, including the UK and the Netherlands.

In 2015, we used around 4,900 tonnes of recycled plastic in our packaging. We want to use far more in the future so we are investigating opportunities to work with re-processors and our suppliers to develop closed-loop systems. Our aim is to move to more circular models of recapturing our own packaging, as opposed to buying recycled material externally. This is a challenging task, which requires different thinking, innovative solutions and collaboration across our value chain.

Deeper insights drive action

In 2013 we commissioned a study in Germany and The Netherlands to further understand the recycling infrastructure for polypropylene (PP) pots, trays and tubs, as we use PP for our margarines, Wall’s ice creams and Vaseline jars. The studies show that recycling of this type of packaging is increasing, owing to driven by demand from the automotive industry for compounded PP. However, despite increasing demand, a large proportion is of PP is still sent to incinerators for energy recovery, so we are exploring collaboration opportunities to ensure that more of these PP containers are processed through recycling streams.

We know that PP is a versatile material used in the Fast Moving Consumer Goods (FMCG), DIY and automotive industries. We have therefore joined industry initiatives, including the Ellen MacArthur Foundation’s Project Mainstream, to collaborate on increased collection and recycling, as well as the development of viable business solutions for other users of PP.

Encouraging consumers to recycle

We have initiated a number of pilot projects to encourage consumers to recycle more. Many offer an incentive to start recycling, which can help people take the first step towards making recycling a lifelong habit.

In 2015, we announced an ongoing partnership with the UK recycling organisation Greenredeem to increase consumer recycling rates and encourage actions to help people live more sustainably. Through working with local authorities and partner charities we have encouraged consumers through rewards linked to Unilever’s household brands, such as Persil and PG Tips. The ongoing partnership between Greenredeem and Unilever will help drive recycling rates towards the EU target of a 50% recycling rate by 2020 and encourage long term behaviour change. Within the first year of this partnership, we encouraged consumers to recycle more than 1,250 tonnes of general waste.

We are also active partners of the Metal Matters programme in collaboration with the British Aerosol Manufacturers’ Association (BAMA), Alupro and other industry players. Together we have increased the number of local authorities collecting aerosols for recycling from 67% in 2012 to over 90% in 2015. Our contribution to promoting aerosol recycling in the UK has been widely recognised as a good example of public and private collaboration.

Community programmes to promote recycling

In some countries, waste can be seen as an opportunity for enhancing livelihoods, with many informal but highly organised networks collecting waste for recycling. Our aim is to promote recycling, raise awareness at government and NGO level, and help workers economically. For example, in Brazil we work with Consumer Goods Forum companies and NGO CEMPRE to increases material types recycled, drop-off points for packaging, and co-operatives to sort materials. Our partner, Brazilian retailer Pão de Açúcar’s stores have drop-off points where consumers can bring used packaging, and our brands also engage with consumers to encourage recycling.

We support 141 recycling stations across 42 cities in Brazil, and 45 co-operatives that generate income (directly and indirectly) for over 5,800 people. We collected over 10,600 tonnes of material in 2014, and 95,600 tonnes since the programme began. We are now working with TIMPSE in Thailand, and CEMPRE in Colombia and Uruguay to replicate this success.

In Indonesia, there is very little infrastructure for recovering packaging materials, so in 2009 we initiated our Community Waste Bank Programme, which empowers communities to collect and manage their domestic waste. The programme has since been expanded into 19 cities. Through our Unilever Indonesia Foundation, we assist local communities in developing a system where they can collect inorganic waste and sell it based on its value. The money received is saved within the community waste bank and can be cashed in over time. The system works like a regular bank, except that waste is deposited instead of money.

In 2014, total value created from total waste was 2.8 Billion IDR and in 2015 the total value created is 3.8 billion IDR. This is a result of 1,258 community waste bank with 55,500 members and collected 3,739 tonnes of packaging waste.

In 2015 we collaborated with local municipalities and developed 11 sectoral waste bank and three city level waste banks which are able to collect waste from smaller waste bank units. The aim of these sectoral and city level waste banks is to support the small waste banks in channelling their waste and ultimately reducing the volume of waste sent to landfill.

Developing technology & infrastructure for sachet waste

Single-use sachets make our brands affordable to people on low incomes and create less waste per millilitre of product than bottles. However, in developing markets where they are most popular, infrastructure for recycling is often limited. Discarded sachets represent an eyesore and potential long-term environmental nuisance, and do not currently possess sufficient economic value to allow for collection and recycling.

In India, we have proved that pyrolysis technology can convert sachet waste into an industrial fuel through extended production runs. However, pyrolysis, which comes in various forms, is still not an established technology and has several limitations, making it difficult to develop a sustainable business model. One such limitation is the costs associated with the collection and processing of the sachets versus the value obtained from the output product. To counter this, we have been piloting a new technology over the last three years which we believe can help create a much more viable business case. In 2015, we completed large scale trials and have placed orders for equipment to build a pilot plant in Indonesia in order to prove the commercial viability of this technology.

Finding radical industry transforming solutions for complex materials such as single-use sachets and other multi-layer flexibles can be challenging. Solutions also differ in developed and developing markets.

In October 2014 we joined a two year UK industry collaboration, The REFLEX Project. This is sponsored by Innovate UK and funded by the UK Department for Environment, Food and Rural Affairs’ Action Based Research Programme. Project partners include Axion Recycling, Nestlé and Suez Environnement amongst others. It aims to remove several barriers to creating a circular economy in flexible plastic packaging, and involves the whole supply chain.

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