CEO introduction

A year of change

 2009 was a good year for Unilever. Despite difficult economic conditions our growth momentum was strong and we laid many of the foundations needed for the long term. At the same time we continued to serve billions of consumers across the world with products and innovations that help them feel good, look good and get more out of life.

A new vision

2009 saw the launch of a new vision for Unilever – to double the size of the company while reducing our overall impact on the environment. The commitment presents Unilever with a major challenge. The reduction we are talking about is an absolute one. It incorporates all our impacts right across the value chain – from the sourcing of our raw materials through to consumer use and disposal of our products. In short, we intend to decouple growth from environmental impact.

The starting point

Where do we start in addressing such a challenge?

First, we have to put our own house in order. And we are. Over the last 15 years the company has significantly improved the eco-efficiency of its network of factories. CO₂ from energy has gone down by 40%, water by 65% and total waste by 73% per tonne of production. We recognise that we have more to do and have the plans to get there.

Working across the value chain

Unilever’s biggest impacts do not come from its own operations. Our 264 factories account for only a small proportion of our emissions. Our biggest effects on the world around us come from the sourcing of raw materials at one end of the value chain and consumer use of our products at the other.

 These are issues which we cannot tackle alone. Together with NGOs, customers and other partner organisations we have programmes and commitments in place to address them at each stage of the value chain.

 As a food company half our raw materials come from agriculture and forestry. Our ambition is to purchase all our key crops from sustainable sources. We have already taken the lead in many areas. In palm oil, we have bought GreenPalm certificates covering 15% of our volumes. And as a founder member of the Roundtable on Sustainable Palm Oil (RSPO) we are helping to move the industry to sustainable palm oil. We have set our own target to be 100% sustainably sourced by 2015.

 It is a similar story in tea. Around 15% of our global volumes of tea now comes from certified sustainable sources. Commitments like these not only help the environment, but also have a positive impact on the lives of millions of people. In Kenya alone, 38 000 smallholder tea farmers have achieved Rainforest Alliance certification. Again, our target is to be fully sourced with sustainable tea for our Lipton tea bags by 2015.

 In ice cream the challenge is different. Here the task is to move to climate-friendly HC refrigerants in the point-of-sale freezer cabinets that we own around the world.

 Ultimately, however, we will not achieve our environmental goals without persuading consumers to change their behaviour. For many of our products consumers are responsible for around 70% of the environmental impact. Laundry detergents are a case in point. The temperature and cycle at which the wash is done has a huge impact on the water and energy used. The Cleaner Planet Plan, which is being rolled out across our Omo, Persil and Surf brands, is a behaviour change programme that educates consumers on how to do their washing in a resource-efficient fashion.

Tackling social as well as environmental issues

On the social dimension we are also making progress. Lifebuoy’s programme to teach children and their families about the importance of handwashing has reached more than 133 million people since 2002. Ben and Jerry’s has announced that it will go Fairtrade. In India our Shakti distribution network now employs 45 000 women. They are not only making our products more accessible to some of the 800 million people who live in Indian villages but they provide a livelihood, dignity and respect to many families along the way.

Shared value

This way of working, which has been described as “shared value creation”, has been at the heart of Unilever’s approach since the inception of the business. Today, we are applying it to the challenges of the early 21st century: climate change, water scarcity, poverty alleviation and malnutrition to name but a few.

Of course we have had our share of setbacks with which we have had to deal. Whether these were issues with contract labour in Pakistan or accusations levelled against some of our palm oil suppliers, we have tried to respond to these criticisms quickly and transparently.

 We report on these matters in this document. We hope that it provides a balanced account of how Unilever is addressing the central issue facing companies everywhere – namely how to grow in a genuinely sustainable manner.

Paul Polman

Chief Executive Officer