We are integrating sustainability into our brands and innovation to help drive business growth. We are working with our customers and suppliers, engaging employees and forging new partnerships.
Driving business success
With 7 billion people on our planet, the earth’s resources are immensely strained. This means sustainable, equitable growth is the only acceptable model for our business.
We believe growth and sustainability are not in conflict. Making sustainable living commonplace for our consumers is helping to drive profitable growth. By focusing on sustainable living needs, we can build brands with a significant purpose. By reducing waste and material use, we create efficiencies and cut costs. This helps to improve our margins. By looking at product development, sourcing and manufacturing through a sustainability lens, opportunities for innovation open up. And we have found that by collaborating with partners including not-for-profit organisations, we gain valuable new market insights and extend channels to engage with consumers.
We have developed a simple four-point framework to help capture the ways in which sustainability contributes to our business success.
Consumers are responding to campaigns by brands such as Omo, Breyers and Hellmann’s on issues ranging from water scarcity to sustainable sourcing. Their interest and engagement is translating into sales growth and greater brand awareness.
In fact, our Sustainable Living brands accounted for nearly half of our growth in 2015 and grew faster than the rest of our business.
Sustainability creates innovation opportunities, pushing us to re-think product design in a world of finite resources to address specific social and environmental issues. It opens up new markets and allows our brands to connect with consumers in different ways to meet their changing needs.
By cutting waste and reducing use of energy, raw materials and natural resources, we create efficiencies and cut costs, while becoming less exposed to the volatility of resource prices. Cost avoidance and savings help to improve our margins.
We have achieved cumulative cost avoidance of over €600m through eco-efficiency in our factories since 2008. Our waste manufacturing programme alone has contributed around €250 million of cost benefits and created hundreds of jobs.
Sustainable ways of doing business help us mitigate risk across our operations. Operating sustainably helps us to futureproof our supply chain against the risks associated with climate change and long-term sourcing of raw materials.
By 2015, 60% of our agricultural raw materials were sustainably sourced.
Placing sustainability at the heart of our business model strengthens our relationships with stakeholders and helps us succeed as a business. It helps us maintain our value and relevance to consumers, whilst inspiring Unilever’s current and future employees.
In 2015, we maintained our status as the Graduate Employer of Choice in the fast-moving consumer goods sector among our target universities across 34 countries.
Sustainable Living brands drive growth
Putting sustainable living at the heart of our brands is inspiring our consumers and growing our sales. The concept of ‘purpose-driven’ brands is not new. Among our own brands, Lifebuoy and Ben & Jerry’s have had a social or environmental purpose at their heart since they were founded.
However, in today’s complex and interconnected world, a powerful purpose alone is not enough and brands must look their impacts across the board. Brands cannot do social good while harming the planet, or improve the lives of women who buy our products while ignoring the working conditions of the women who make them.
This is why Unilever has created a definition of what makes a true ‘Sustainable Living’ brand. Such a brand must not only have a clear purpose that contributes to a social or environmental concern. The product itself must also contribute to one or more of the targets we have set in our Unilever Sustainable Living Plan.
To assess product and purpose, we developed a methodology to help us determine how, and to what extent, each brand delivers against the two criteria. It enables brands to generate a systematic view of their progress across social and environmental factors. In 2016, we analysed our top brands using this methodology. Our analysis revealed that in 2015 Sustainable Living brands grew even faster than they did in 2014. They also delivered nearly half our growth and grew significantly faster – in fact 30% faster – than the rest of the business.
We believe that if we want to effect change at scale, we will achieve this by making large, successful, category-defining brands recognisably sustainable. Our five biggest brands: Dove, Dirt is Good, Knorr, Hellmann’s and Lipton are all Sustainable Living brands.
The below examples from Domestos, Dove, Knorr and Lipton show how each has a purpose that addresses a specific social and environmental concern. And how they have made changes and improvements to their products to address a specific target in our Unilever Sustainable Living Plan.
In 2015, we carried out research to understand whether consumers’ views on sustainability translate to actual purchasing choices. The majority of people we spoke to not only believe that sustainability is important but also take action to live more sustainably. Our research also revealed that sustainability issues are relevant to consumers in both developed and emerging markets. This supports our thinking that sustainability presents a growth opportunity for business.
Sustainable Living brands: purpose and product in action
Purpose: To help 25 million people gain improved access to a toilet by 2020 by promoting the benefits of using clean toilets and by making toilets accessible.
Product: We have reduced the plastic used for our Domestos bottles by up to 15%, making them lighter yet maintaining their strength. Once rolled out across the range worldwide, this will save around 1,000 tonnes of plastic a year.
Purpose: To make beauty a source of confidence not anxiety for women everywhere by reaching over 15 million young people with our Dove Self-Esteem Project.
Product: Dove was one of our first brands to introduce compressed aerosol deodorants in 2013. Consumers can enjoy the same protection and fragrance in the same spray time as before, but in a can half the size. This innovation cuts the carbon footprint per can by about 25%.
Purpose: To unlock flavour and goodness from everyday food from Farm - through sourcing 100% of ingredients sustainably - to Fork, through nutritious cooking.
Product: Already 92% of the top 13 vegetables and herbs used in Knorr sauces, soups and seasonings are grown sustainably, and a ‘sustainably grown’ label on pack is making it easier for people to make responsible choices in the supermarket.
Purpose: Lipton supports farmers by working to improve their livelihoods and those of their families while protecting the planet for the future.
Product: By the end of 2015, all the tea for our Lipton tea bag blends was sourced from Rainforest Alliance CertifiedTM estates, a major step for the world’s biggest tea brand.
Working with partners
Global issues such as deforestation, food security and access to sanitation are too large and complex for any single organisation to tackle alone. By collaborating with partners including not-for-profit organisations, we can pool resources and leverage skills, capabilities and networks that complement our own expertise.
We are stepping up our engagement to work with governments, NGOs and others in our industry to drive fundamental change to whole systems. That’s why Unilever is playing a leading role in important global initiatives such as the World Business Council for Sustainable Development’s Action 2020, the Tropical Forest Alliance 2020 and the Global Task Force for Scaling up Nutrition.