Unilever’s Triple Win Sustainability Strategy

Derek WongSustainability ConsultantCarbon49Browse all columns by Derek Wong

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Unilever has been the number one Food & Beverage company on the Dow Jones Sustainability Index for 12 consecutive years. Through Bullfrog Power, Unilever recently became the largest commercial purchaser of renewable energy in Canada at 59,000 MWh per year. What is Unilever’s sustainability strategy and why do they do it? To find out, I took a tour of their Brampton plant and talked to John Coyne, Vice President and General Counsel of Unilever Canada.

As one of the largest consumer products companies in the world, Unilever has a large portfolio of high profile brands. In Canada, the brands include icons such as Ben & Jerry’s, Breyers, Degree, Dove, Hellmann’s, Klondike, Knorr, Lipton, Skippy, Slim-Fast, and Vaseline.

Like other companies in the consumer packaged goods space, climate change could have a huge impact on

Unilever. Agriculture, raw materials, and water usage can all be affected by changes in climate. Waste management, supply chain management, energy usage, and greenhouse gas emissions may also be affected and carry with them regulatory risks, reputational risks, and litigation risks. Unilever has been taking proactive steps on sustainability to gain a leadership position among their industry peers.

What is Unilever doing on sustainability? At a recent press event, Unilever announced that they are bullfrogpowering all of their manufacturing facilities and offices in Ontario—accounting for 90 per cent of its Canadian operations—with locally sourced renewable power. It will reduce its carbon dioxide emissions footprint by approximately 7,544 tonnes annually.

Through the agreement, Bullfrog Power‘s generators inject renewable electricity onto the electricity grid to match the amount of power Unilever’s bullfrogpowered facilities use. Currently, in Ontario, Bullfrog’s electricity comes only from local wind and hydro facilities that have been certified as low impact by Environment Canada under its EcoLogoM program—instead of from polluting sources like coal, oil, natural gas and nuclear. Bullfrog Power uses the collective demand of its customers to support the development of new renewable generation in Canada. To date, five new wind projects have been commissioned in Canada to meet the demand of the growing community of bullfrogpowered homes and businesses.

“We want to help lead by example and an important part of our sustainability strategy is to lessen our environmental impact to the benefit of our consumers and our communities,” said John Coyne of Unilever Canada. “We’ve set aggressive emissions reduction targets with respect to our facilities. Supporting green electricity through Bullfrog Power is a significant step toward achieving our goals.”

The Unilever Sustainable Living Plan, which was launched in November 2010, aims to halve the environmental footprint of the manufacture and use of

its products by 2020. Choosing Bullfrog Power’s green electricity supports Unilever’s overall plan to reduce the company’s greenhouse gas emissions by 50 per cent (based on 2008 levels) by 2020, and sourcing 40 per cent of Unilever’s energy requirements from renewable sources by 2020. Other environment-based goals set out in the plan include sourcing 100 per cent of its agricultural raw materials sustainably, halving the waste associated with the disposal of its products, and halving the water associated with consumer use of its products by 2020.

“Bullfrog Power is proud to be working with Unilever Canada to reduce its environmental impact,” said Tom Heintzman, President of Bullfrog Power. “We also look forward to partnering with Unilever Canada and its bullfrogpowered brands to help ignite dialogue about sustainable lifestyle choices in homes across Canada.”

Why does Unilever do it? As I toured Unilever’s facilities in Brampton Ontario, John Coyne told me Unilever does it for the customers, for the environment, and for profits. “When consumers think about our brands and the sustainability messages around our brand, we think they will look at us, congratulate us for taking a leadership role in this space, and reward us with purchases. That’s how we think our sustainability model will lead us to growth. So getting the word out to the consumers and to our business partners such as Walmart is a very important part of this strategy.”

Now Unilever Canada can make the proud claim to their customers and Walmart that their products—including Becel, Hellmann’s, Knorr and Ben & Jerry’s—are produced using 100 per cent green electricity.

When it comes to measuring greenhouse gas emissions, Unilever sees it as a driver for operational improvements. “All of our facilities are in compliance with the Canadian provincial greenhouse gas reporting regulations coming into force [See: Ontario and B.C. regulations]. It’s not difficult for us to be in compliance because internally we have been tracking our emissions for years anyway. It’s been part of our internal

operational improvement process for emissions reduction, water reduction, and waste reduction. All of these areas have seen improvements over the years. That’s why we have been number one on the Dow Jones Sustainability Index for 12 years. We don’t see measuring GHG as primarily a compliance matter. The GHG measurements are used to identify areas for operational improvement and to track our operational efficiency progress.”

How much does it cost Unilever to do the right thing? Coyne has a great answer: “Almost all of our sustainability initiatives have actually resulted in win win win: our customers like us for doing the right thing, the environment likes us for running a sustainable business, and last but certainly not least, our shareholders like us because it reduces costs and increases profits.” Win, win, win indeed.

Derek Wong is a Toronto based sustainability consultant. See contact info and more posts like this at Carbon49.com.

Unilever Struggles to Quantify Carbon Footprint of Digital AdvertisingCPG Giant Tries to 'Green' Its Marketing in Broader Sustainability PushBy: Jack Neff Published: December 12, 2011

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Unilever is turning its attention to the media industry's carbon footprint, a move that comes on the heels of its Sustainable Living Plan, which for the first time tops the Climate Counts annual ranking of corporate efforts to combat climate change.

But as it tries to calculate how its media and marketing choices affect carbon emissions, the world's second-biggest advertising spender is finding that it's not easy seeing green, particularly with digital media.

Luis Di ComoLuis Di Como, Unilever's senior VP-global media, said the print industry and publishers have already documented their carbon footprints extensively. But he said the company is having a harder time getting data from and determining how to define the carbon impact of digital media. As a result, he said Unilever plans to work with the Association of National Advertisers to seek a way to fairly assess the carbon impacts across media.

Digital media often seems like a greener alternative than print, whose high cost in dollars and carbon alike includes felling trees, printing pages and shipping finished products to readers by air, land and sea. But print publishers have long contended they get a bad rap, pointing to the huge energy cost of vast server farms, consumers' computers and other digital devices.

Greenpeace projects data centers by 2020 will use more electricity than France, Brazil, Canada and Germany combined. In the U.S., about 57% of electricity is generated by coal, a major source of carbon dioxide emissions.

Up to now, there's been no independent arbiter of whether digital is really greener than print or other media, and it's far from easy to get

an answer, as Mr. Di Como conceded.

One question: How much electricity used in digital-media either at the data center or a consumer's home should really be apportioned to advertising? While the impact of an additional ad page is relatively easy to quantify, how much more power does it take to add one more display or search ad to the digital mix?

Mr. Di Como also noted that some of Unilever's biggest marketing-related carbon impacts come in the advertising production process, particularly flying people to TV or video-production shoots.

The ANA has a sustainability task force in conjunction with the 4A's with which Unilever is very involved, said ANA President Bob Liodice. He's not sure where the task force stands in taking up the carbon footprint issue for media, but said, "The task force we've formed is looking broadly at the total scope and will decide very specifically what they could be working on."

Notes from a task-force meeting in May show Noreen Simmons, director of media strategy and operations at Unilever, brought up the issue of sustainable communications. According to the notes, discussion among participants focused on how "information about sustainable marketing is sparse and inconsistent across the advertising industry" and that "no common metrics on the environmental impacts of marketing communications currently exist."

Realistically, one reason Unilever is only now getting around to detailing the media toe in its carbon footprint is that it had bigger fish to fry (presumably with sustainably-sourced oil and renewable energy), according to Gavin Neath, senior VP-sustainability at Unilever.

The single biggest environmental impact in Unilever's "value chain," he said, comes not from manufacturing and certainly not marketing, but from consumer use. And the biggest single category-country contributor to energy and water use from Unilever products comes from U.S. personal care, he said -- specifically that 11 minutes a woman in the U.S. typically spends in the shower.

Like Mr. Di Como, Mr. Neath reports directly to Unilever Chief Marketing and Communications Officer Keith Weed. Among the arguments for putting sustainability under the marketing area, he said, is that in "fast-moving consumer goods companies, if you're not on the brands' agenda, you're not really on the business agenda." Mr. Neath added that a big part of his job is "changing consumer behavior."

To that end, Unilever's Suave launched a promotion with Walmart Stores earlier this year aimed at encouraging people to find ways to shorten their showers. But, Mr. Neath said, large numbers of people will only realistically start taking shorter showers in response to higher water and energy costs.

After a decade of drought, some Australians already have timers on their showers, Mr. Neath pointed out. Drought-stricken portions of the U.S. Southwest could be headed in that direction, he said, noting that 100 million people in the U.S. now live in "water-stressed" areas. Part of the solution too, said Mr. Neath, could be product innovation -- such as dry shampoos and leave-in hair conditioners.

The efforts Unilever has made since launching its Sustainable Living Plan last year, with 50 numerical targets for reducing its environmental impacts, helped it edge Nike for the first time this year in the Climate Counts rankings. Climate Counts is a nonprofit organization launched with support from Stonyfield Fams, an organic dairy brand majority owned by Unilever competitor Groupe Danone.

"This kind of external recognition is an important validation of what we're seeking to do," said Mr. Neath. Unilever CEO Paul Polman has called sustainable sourcing and aggressive efforts to reduce environmental impact "a new business model and the only acceptable way of doing business," Mr. Neath said, particularly given that 53% of the company's sales come in developing markets, and most of its planned growth comes from increasing sales there.

Unilever sets target of halving carbon footprint in 10 years 

by Loulla-Mae Eleftheriou-Smith, 15 November 2010, 11:30am

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Unilever, the global consumer goods company, has revealed a plan to halve the carbon footprint of its products and source all agricultural raw materials sustainably within 10 years.

Pot Noodle: Unilever brand pledges to lower carbon footprintUnilever, the company behind brands such as Dove, Knorr, Pot Noodle and Lipton has announced the plan in London, Rotterdam, New Delhi and New York.

It aims to reduce its carbon footprint and source all its agricultural raw materials in a sustainable way, and to help over a billion people, mostly in developing countries, to improve their health and wellbeing over the next 10 years.

Unilever says that at least two thirds of greenhouse gasses and half the water produced from its brands and products’ lifecycle is generated by consumer use.

It has set out more than 50 economic, social and environmental targets to halve the greenhouse gas emissions, water and waste generated by itself, its suppliers and consumers of its products.

Paul Polman, chief executive of Unilever, said tackling sustainability challenges provides new opportunities to create sustainable growth for

the company. He said: "It creates preference for our brands, builds business with our retail customers, drives our innovation, grows our markets and, in many cases, generates cost savings."

The company has said that it doesn't "have all the answers", and will need to work in partnership with customers, suppliers, governments and NGOs to succeed with its plan.

Polman said: "By halving the total carbon, water and waste impact of our products, primarily through innovation in the way we source, make and package them, we can help people make a small difference every time they use them.

"As our products are used two billion times a day in nearly every country in the world, our consumers’ small actions add up to make a big difference."

Unilever’s plan sets out additional goals to source its palm oil 100% sustainably by 2015.

The company has said that it will improve the health and wellbeing of over a billion people by making safe drinking water more accessible in India.

It will work with Oxfam, the Rainforest Alliance and other charities to bring more than 500,000 smallholder farmers and small-scale distributors into its chain of suppliers.

Polman said: "There are billions of people who want the improvements to their health and wellbeing that everyday products like ours provide and who want to live sustainably.

"Our aim is to help people in developing countries improve their quality of life without a big increase in their environmental impacts, and to help those in developed markets maintain a good standard of living while reducing theirs."

Unilever is the second biggest global food and personal care company, distributing products in 170 different countries.

The sustainability announcement comes a month after its larger rival, Procter & Gamble, declared its sustainable business aim.

Its goals, which it aims to achieve by 2020, include: replacing 25% of petroleum-based materials with sustainable ones; increasing the amount of renewable energy used in plants to 30%; and reducing

consumer packaging by 20%.

It will also be working with conservation body WWF.

Unilever Improves Supply Chain, Faces Challenges with Customer Behavior

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On Tuesday, Unilever released its first year’s progress report on the progress it made to meet its Sustainable Living Plan targets. The results so far are mixed. The report shows significant progress in many of the targets as well as real difficulties in others. For example, Unilever reports that sustainably sourced agricultural materials grew last year from 14 to 24 percent on the way to reach 100 percent in 2020. On the other hand, there was no progress in Unilever’s ambitious plan to halve its carbon footprint by 2020.

It’s not really surprising to see these mixed results given the fact that

Unilever deliberately gave itself very challenging targets in the first place. “Many of our goals look as daunting now as they did when we announced them, but you have to set uncomfortable targets if you are to really change things,” explains its CEO, Paul Polman in the report. So taking into account the high bar Unilever set up in this plan, with goals like doubling its sales while halving its carbon footprint by 2020, my impression is that the Sustainable Living Plan is so far a success story.

The plan, published in November 2010, broke new ground by committing to take responsibility for the company’s impacts throughout the value chain, from the sourcing of raw materials all the way through to the consumer’s use of its products to cook, clean and wash. Looking at the progress report you can see a clear division in the value chain – while Unilever has made good progress in its supply chain and within the company’s operations, it had difficulties moving forward on changing consumer behavior.

The areas where Unilever made genuinely good progress included:

• Sustainable sourcing – 24 percent of total agricultural raw materials now being sourced sustainably, versus 14 percent in 2010. Unilever made a significant progress with its two main raw materials – 64 percent of palm oil and 60 percent of paper and board are coming now from sustainable resources.

• Nutrition – over 90 percent of Unilever’s leading spreads now contain less than one-third saturated fat.

• Renewable energy now contributes 20 percent of Unilever’s total energy use and 100 percent of electricity purchased in Europe is now from renewable sources.

• Safe drinking water – 35 million people have gained access to safe drinking water from Pureit water purifier since 2005.

Unilever reported a little less success in the areas of health and hygiene: The goal was to help more than a billion people to improve their hygiene habits and bring safe drinking water to 500 million people by 2020. By end 2011, Unilever had reached over 135 million people – 48 million with Lifebuoy, 44 million with its toothpaste brands, 8.5 million through the Dove Self-Esteem Fund and 35 million people with safe drinking water. There were also few areas where Unilever reported on real difficulties to make progress, especially regarding targets that require consumer behavior change, such as reducing the use of heated water in showering and washing clothes, or encouraging people to eat foods with lower salt levels.

It’s interesting to see that Unilever is aiming to reach this broad set of goals with collaborative efforts. In its global supply chain it collaborates

on climate change, water and agricultural issues to create new standards, new frameworks and new forms of governance. When it comes to consumers, Unilever cooperates to change consumer behavior in issues such as health and hygiene, nutrition and recycling. The idea is not just to create better solutions, but as Paul Polman explains, to drive concerted, cross-sector change because he believes that even if Unilever meets its goals, it will still consider it a failure if no one else follows.

This approach is reflected not only in the vast number of collaborations in which Unilever is participating, but also in the openness of its innovative process. Unilever adopted a crowdsourcing approach, inviting all stakeholders, not just NGOs and governments, to take part in the effort to find the ways to meet its goals. A few weeks ago, for example, Unilever unveiled a new Open Innovation platform to gather and assess ideas from external resources, inviting “anyone who has a fresh, serious approach to new thinking” to pitch in. Another example took place on Wednesday, when Unilever initiated the Sustainable Living Lab, a 24-hour online dialogue aimed to create and inspire a discussion about the challenges Unilever is facing, co-create new ideas and share good practices.

The online discussion focused on several specific issues, including consumer behavior change, which is one of the most important keys to success. After all, consumers’ use of Unilever products represents 68 percent of the company’s carbon footprint – there is no way for Unilever to halve its footprint without getting consumers to reduce their own. But how do you do it? How do you convince people to wash their clothes in lower temperatures or use less water when they shower? And in addition, how do you integrate Unilever products into the process of shifting consumers to a more sustainable behavior? These are very difficult questions and from what I saw on the online discussions no one in or outside Unilever has yet to come up with a good answer.

Still, even with this sort of challenges, Unilever is proving in this report it knows not only to draw an impressive road map, but also to follow it.

Unilever Addresses Climate ChangeSourced from the WebUnilever Addresses Climate Change

The Issue 

Climate change is one of the most serious issues facing the world. Extreme weather patterns and water scarcity will affect people everywhere, with developing countries likely to be among the most vulnerable.

There will be serious consequences for our business operations, including threats to our agricultural supply chain and the availability of water in some of our markets.

The costs of addressing climate change now, while considerable, are likely to be far less than waiting and allowing the problem to get worse.

We have joined business coalitions endorsing the need for action.

Our approach

In 2007, the Unilever Executive agreed a greenhouse gas strategy.

Our approach to reducing our greenhouse gas emissions addresses both our direct and indirect impacts.

For our direct impacts we seek to:

• reduce CO2 from energy in our manufacturing operations by 25% by 2012 (measured per ton of production against a baseline of 2004). This builds on our reductions to date.

For our indirect impacts we seek to:

• improve the footprint of our existing product portfolio, using our new vitality metric.

• assess innovations using our greenhouse gas profiling tool.• work with our customers and suppliers to address our wider

impacts.Our carbon footprint

We estimate Unilever's total emissions of greenhouse gases from our own factories, offices, laboratories and business travel to be of the order of 4 million tonnes of CO2 equivalent a year. Our wider footprint in sourcing of agricultural and chemical raw materials can amount to around 10 times as much as our own emissions, and in consumer use and disposal of products may reach between 30 and 60 times as much as our own emissions, depending on the assumptions made about how consumers use our products.

Our direct impacts - Greenhouse gas emissions in manufacturing

Since 1995 we have achieved a 39% reduction in CO2 from energy per tonne of production (equivalent to a 43% reduction in absolute terms). In 2008, we reduced our CO2 emissions by 2.2% per tonne of production compared to 2007. This keeps us on track to meet our 2012 target. We continue to work towards our 2012 target by investing in more efficient power and steam generation technology and the development of less energy-intensive manufacturing processes. Our approach has been to target the sites which emit the most CO2.

In Europe we now have three combined heat and power plants operational in Caivano and Cisterna, Italy, and Stavenhagen, Germany. These are more environmentally efficient than importing electricity from the national supplier because they fully utilise the waste steam and hot water from electrical power generation. We are planning to install additional co-generation facilities in Europe to reduce regional greenhouse gas emissions.

We are exploring alternative technologies in other regions too. For example, at our Cu Chi factory in Vietnam, we installed solar panels to preheat water for steam generation.

As well as capital investment in more energy-efficient technology, raising awareness and behaviour change are also an important factor in reducing emissions. Simple practices such as turning off lighting, heating and equipment when not needed and reporting steam and compressed air leaks can deliver big energy savings. During 2008, we have conducted workshops to share good practice and raise technical capabilities in each region.

Reducing our environmental impacts0

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We're committed to reducing the impacts on the environment associated with the production and use of our products.

Driving sustainability, creating changeThis is a huge challenge – and one we can't achieve alone. For example, we want to halve the water use and greenhouse gas emissions associated with our laundry products. But most of the water and more than half the greenhouse gas emissions associated with laundry product use come, not in our factories, but when the consumer does a wash. Similar challenges apply to our soaps, shampoos, and other home care and personal care products.

But though the challenges are great, so are the opportunities for innovation. Our laundry products are used 125 billion times a year. Small improvements – designing detergents that wash better at lower temperatures, and use less water to rinse - make a big difference.

We'd like to hear from potential partners who want to work with us to improve sustainability in the following fields:

• Greenhouse gases – we're committed to halving the greenhouse gas impact of our products. 

• Water – we will halve the water associated with consumer use of our products.

• Waste – we will halve the waste created by the disposal of our products.• Sustainable sourcing – we will source 100% of agricultural raw materials

sustainably.

Our environment 'wants'While we welcome any collaborations that could help us meet our commitments on the environment, we are particularly interested in working

with partners on projects to unearth new technologies for sustainable washing and create lighter and more sustainable packaging.