June 18, 2019

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Accounting for Impact: A Closer Look At Unilever's Value Chain

"We still face considerable challenges in scaling up health and hygiene behavior change and encouraging consumers to use less water and energy at home."

Gail_klintworth_unilever

By Gail Klintworth, Chief Sustainability Officer, Unilever

In this blog post, I will try to answer some key questions that we received during our #SustLiving Twitter chat about our progress, roadblocks and opportunities of our value chains, including:

  • @csrconsultant wanted to know our  biggest roadblocks in recent years and which  we have overcome (and how) and which are still vexing us.
  • @waldenhyde aske: How does Unilever talk about sustainability with its customers?
  • @wehatetowaste wanted to know how we address GHG emissions created by consumer use of our products.
  • What part of your value chain is pushing hardest for Unilever to change, asked @mccaffreymike.
  • Quite a few of our audience members wanted to know what we do "about end of line, consumer waste" including @aksvi @asheen and @johnfriedman.

Thanks to all of you for the questions.

Let me start with giving you our top line progress and challenges. We are now two years into our 10-year Unilever Sustainable Living Plan. We are growing our business and starting to see how putting sustainability at the heart of our business model is contributing to our success. It’s helping us reduce costs and risks, and brands that have made sustainability central to their product innovation and brand purpose are increasing sales.  

We’re also making good progress in reducing CO2 and waste from manufacturing, sourcing our raw materials sustainably and rolling out sustainable product and packaging innovation. But we still face considerable challenges in scaling up health and hygiene behavior change, reducing environmental impacts across the value chain, and in encouraging consumers to use less water and energy at home when they wash and clean with our products.

Sustaining Our Value Chain: Top Challenges

One area is scaling up health initiatives. In 2012, Lifebuoy reached five times as many people (71 million) as in 2010, with handwashing behavior change programs. We launched programs in seven Unilever's Five Levers of Changenew countries. Programs are now running in 16 countries including eight of the top 10 countries most affected by child mortality.

Further, we have halved the cost of our behavior change programs since 2010 allowing us to reach more people. Reaching our target of one billion people cost-effectively with behavior change programs remains a big challenge but progress in 2012 convinces us we can still reach this goal by 2015. We have found that partnerships with NGOs and local governments are powerful in helping us to reach out in communities. We are also evaluating whether the use of mobile telephony may play a role in helping to entrench behavior change.

We also continue to work with others to drive change in sustainable forestry and agriculture, in improving smallholder farmers’ livelihoods, in providing safe drinking water, sanitation and hygiene to more people, and in encouraging sustainable consumption.

We always knew that the first years would be about getting the ‘low hanging fruit’; we’re now two years into the Plan and facing some tougher challenges. Where issues are in our direct control – like our manufacturing eco-efficiency – we have made strong progress. But areas outside our direct control and across the value chain are much harder – such as enabling consumers to use less water and energy at home.

Here's how our greenhouse gas footprint across the value chain breaks down:

  • 25 percent from raw materials,
  • 4 percent from manufacturing,
  • 2 percent from logistics,
  • 68 percent from consumer use, and
  • 1 percent at disposal of our products

See our challenge?

The vast majority occurs when consumers are using our products. Just think about the last time you tried to change a habit; even one that you were highly motivated to change…it is not easy. But, we do have success through applying our five levers for behaviour change, which I encourage you to have a look at.

The greenhouse gas impact of our products per consumer use has reduced by around 6 percent since 2010; and the waste footprint per consumer use by 7 percent; the water use per consumer use is laundry detergentbroadly unchanged. I'm not just talking about our manufacturing impacts but the impacts of our products across the lifecycle, from the sourcing of the raw materials to the way consumer clean and wash with our products.

For greenhouse gases, the main drivers of change are:

  1. Optimization of our formulations: For example, over 95 percent (by volume) of our laundry powders in our top 14 countries have been reformulated, achieving a reduction of 15 percent in GHG emission of our laundry portfolio.
  2. Portfolio shifts: For instance, 14 percent of our laundry portfolio in our top 14 countries was made up of concentrated and compacted products (more GHG efficient) at the end of 2012, compared to our baseline of 4 percent in 2008.

Waste: Attaching Metrics to a Mantra

Reduce…

Some of you are particularly interested in our approach to waste. Our approach is to reduce, reuse, and recycle waste. In reduce, we estimate a 9.5 percent reduction in weight per consumer use over 2011/12 compared to 2010. This is a great result, achieved through a combination of lightweighting and material design optimization.

Two examples worth noting are the elimination of PVC from over 95 percent of our portfolio, with only the seals on food products remaining, where we are seeking new commercially available technology to address this safety issue.  A recent success is the reduction in the number of layers and thickness of ‘flow wrap’ wrappers used for our Twister, Paddle Pop and Fruttare ice creams. We have moved from 19 specifications to just three worldwide using new technology, and when our rollout is complete, we Twister icecreamanticipate saving around €1.3 million worldwide and reducing materials by around 530 tonnes.

We are also applying ‘circular value chain’ thinking to some of our challenges and will tackle some specific projects this year to see if we can scale our initiatives faster.

Reuse…

Reuse is a more challenging area, as often we need to overcome consumer perceptions on refills and establish new habits. However, we continue to experiment and are expanding our range. One example is Timotei shampoo’s 500 ml refill, launched in the U.K. in 2012. Another is the use of refill pouches for dishwashing products, which we launched in South Africa in 2010, and have since been successfully rolled out in other countries too.

Recycle…

In recycle, we have achieved on average a 3.5 percent increase in recycling and recovery rates in our top 14 markets. This is still a modest result compared to our ambitions. However, this area is complex as anticipated. In some countries there is almost no infrastructure available to collect waste while some materials cannot readily be recycled, as technologies do not exist.

However, we are working with Cempre in Brazil to help upskill and formalize community waste picker projects. We also have successful projects with RecycleBank in the U.S. where we have been encouraging bathroom recycling and educating through our Dove and Suave brands. We've also achieved great success in encouraging aerosol recycling in Europe and in Brazil where we partner with customers to encourage collection. In India, we have a partnership on a technical solution to convert flexible waste into fuel, which has been successfully used to power boilers at one of our factories.

But the challenge remains and we are very keen to collaborate with other suppliers to bring large-scale solutions to local markets.

Hope this gives you some insight into how we are driving sustainability at the heart of our business. Step by step, project by project, partnership by partner, we will continue to work so that we can one day say ‘sustainable living has become commonplace!’

In the final blog post of this series in response to the #SustLiving Twitter chat, I will focus on how we are leveraging partnerships and policies. Please continue to share your ideas on Twitter with #SustLiving.

Part 1: Embedding & Measuring Sustainability: Unilever's Sustainability Chief Addresses Its Stakeholders

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