The last decade has been marked by extraordinary events – a global pandemic, a once-in-a-generation inflationary shock, wars and geopolitical divides – the impacts of which continue to be felt across households, economies and political systems.
At the same time, the environmental and social challenges that endanger our planet and societies have only become more acute, and more urgent. Whether the climate emergency or social inequality, they need no introduction when they are so obviously staring us in the face.
At Unilever, we passionately believe that business has every reason to address these challenges and has been doing so for many years. From our Unilever Sustainable Living Plan to our Compass Strategy, and most recently our Climate Transition Action Plan, we have put sustainability firmly at the heart of our business strategy.
We’ve achieved a lot, and greatly benefited from doing so. We’ve built more resilient supply chains, saved substantial costs in our operations and attracted great talent.
Now, as we look to the future, we believe we have an opportunity to define a new, third era for sustainable business leadership.
The first era – over a decade ago – was predominantly about ringing the alarm and setting long-term ambitions. The second was about further embedding and integrating sustainability across business and value chains.
The third? To us, it’s all about accelerating delivery, with greater impact, by making sustainability progress integral to business performance. It’s something the world needs, and something stakeholders – from investors to consumers – expect. Once again, Unilever intends to be a frontrunner.
As a result, we’ve spent many months thinking about how we evolve our approach. And it comes down to three key shifts we intend to take.
- To be more focused in allocating our resources towards our biggest sustainability priorities.
- To be more urgent in driving actions towards our long-term ambitions.
- To be more systemic in our advocacy to address the enablers and blockers of progress outside of our direct control.
These are the essential principles that will guide our work for the coming years.
More focus
The reality is that Unilever’s sustainability agenda covers a wide range of issues.
But we have learned from experience that we need to be more focused in our allocation of resources to make tangible progress on the big, complex challenges we face.
Let me illustrate with an example. In 2020, we set a goal to achieve a deforestation-free supply chain in palm oil, paper and board, tea, soy and cocoa. Here, we allocated substantial resources over several years to tackle the challenge in its multiple dimensions: to support smallholder farmers, improve cultivation practices, ensure traceability and transparency in the supply chain; build our own processing facilities; innovate alternative materials through cutting-edge science; and to reformulate thousands of product lines to reduce or eliminate their dependency on forest-risk commodities.
This focused approach has been instrumental in helping us to achieve 97.5% deforestation-free order volumes by the end of 2023. It’s the type of approach we intend to replicate.
So as we look to the future, we will focus our efforts on four sustainability issues, for which we recently updated our public commitments and which are fully embedded in our Growth Action Plan. These are climate, nature, plastics and livelihoods.
Our updated commitments are very stretching, but they are also intentionally and, unashamedly, realistic. We are determined that Unilever will deliver against them, just as we are determined to perform against our financial goals. We want to set sustainability ambitions which are credible, which we believe we can deliver against, and which have real positive impact.
It goes without saying that we also remain fully committed to the fundamental tenets of operating as a responsible business: respecting human rights, advancing equity, diversity and inclusion, doing business with integrity and ensuring the safety of people. These are all deeply embedded across our business, and we will continue to report on them in the coming years.
More urgent actions
We understand why businesses are sometimes judged on the merit of their long-term sustainability commitments. They provide an important destination, which guides strategies and galvanises collaborations on complex, multi-faceted challenges.
But whilst rigorous and science-based long-term commitments are fundamental, we also need to ensure we deliver now. That’s why we are also short-terming our approach – ensuring we are clear about the immediate steps we have to take, and hard-wiring them into the strategic cycles that most companies plan around. This is where capital allocation is made, trade-offs are agreed, and people are being held accountable. In this way, sustainability benefits from the whole might of the company and the sense of urgency with which the rest of the business is typically managed.
Our updated public goals, where longer-term ambitions are complemented by near and medium-term milestones, embrace this approach. We have created detailed time-bound roadmaps, with investment needs integrated into the business planning cycles. We have regular checkpoints at the top of the organisation to monitor the pace of progress and act quickly where needed.
We are also bringing the level of accountability for the delivery of sustainability roadmaps in line with other business deliverables – from Unilever-wide KPIs used in the company’s bonus plan to individual KPIs for those managing workstreams. We will continue to link reward and the delivery of sustainability performance as part of our broader Growth Action Plan to dial up the performance culture at Unilever.
More systemic
Unilever has long been advocating for external change to accelerate sustainable outcomes, and we are engaged in numerous forums, coalitions, and campaigns in which we often play a leading role.
As opportunities to drive sustainability progress within our direct control are increasingly scarce, we are strengthening our focus for the coming decade on opportunities that largely depend on global value chain transformations, technological innovations, and public policies to make them possible and affordable.
This means that Unilever will more forcefully use its voice and convening power to address enablers and blockers of our progress.
Part of this is about deeper forms of collaboration with partners, such as through our supplier climate programme, which is designed to build capabilities with our 300 biggest suppliers who account for most of our Scope 3 GHGs.
Another part is through more assertive policy advocacy, to help create the conditions for driving progress across our value chains. A good example is how we are leading the call for a global plastics treaty, that sets binding rules, targets and standards on packaging redesign, reuse/refill models, extended producer responsibility (EPR), waste processing, and the elimination of avoidable plastics.
Throughout, we intend to engage more transparently. The publication of our first Climate Policy Engagement Review (PDF 1.39 MB), which sets our climate policy priorities and critically examines the positions and engagement activities of our main industry associations, is testament to this effort.
In summary, at Unilever we want to do fewer things and with greater impact. Our refreshed sustainability agenda – with more focus, urgency and systemic change – is no exception. We are determined to deliver against our plan, and are passionate about the difference it will make – to our business, and to our many stakeholders.
