There was a moment at the beginning of the pandemic when Unilever might have pumped the brakes on its sustainability goals.
"We had a real deep discussion saying, 'Do we pause or do we accelerate?'" said Chief Supply Chain Officer Marc Engel at a Reuters Supply Chain conference in July.
"While the world's dealing with the devastating effects of the COVID-19 pandemic, and it's grappling with serious issues of inequality, we cannot let ourselves forget that the climate crisis is still a threat to all of us," Engel said. The company hit the gas.
In June, Unilever pledged to reach net-zero emissions from its products by 2039 and to rid its supply chain of deforestation by 2023.
Factoring in supplier emissions
Unilever’s previous goal was to decrease the carbon generated by its operations by 100% by 2030 from a 2015 baseline and to halve the emissions from consumers using its products by 2030 from a 2010 baseline.
Recognizing the urgency of the climate crisis, the company moved the timeline back to 2039 but dialed up the intensity to net-zero emissions, including the entire supply chain through to the end consumer.
"The biggest impact of Unilever’s carbon footprint sits in Scope 3, with around 24% in our raw materials and 66% coming from the consumer use of our products," Dave Ingram, Unilever's chief procurement officer said via email.
Unilever has been working to mitigate supply chain emissions for more than a decade, according to Dexter Galvin, global director of corporations and supply chains for CDP.
"The fantastic thing with Unilever was always, if you spoke to one of their buyers about what their suppliers needed to do on carbon and climate change, they know the answer," Galvin said. "And that was pretty rare."
To meet the new goal, Unilever will develop products that are inherently less carbon-intensive and favor suppliers that have already set Science-based Targets for emissions reduction. The company also pledged to set up a system in which its 70,000 suppliers will declare their emissions on invoices, leveraging partnerships to standardize data collection and reporting.
"We are right at the start of this and we expect it to be complex," Ingram said. Including emissions information on invoices "will give us a new level of visibility to the emissions relating to our ingredients and will allow us to track progress and take more informed and targeted action to help our partners reduce impact," Ingram said.
This element of hand-holding suppliers through the emissions accounting process is a hallmark of advanced supply chain sustainability work. Walmart, for example, has a digital platform for its suppliers to work on their own sustainability metrics in pursuit of reducing emission by one billion metric tons by 2030.
Underneath the visibility is a plan to prioritize ingredient categories with the highest potential for emissions impact, starting with the inorganic ingredients that go into Unilever's cleaning products.
"Through our pilots, we understand the potential impact of product formulation, material and supplier and processing choices have on footprint for this portfolio," Ingram said. The work to make emissions internally visible will eventually be shared with consumers on product labels.
Transparency when goals go amiss
To stop global temperature rise, companies have had to get into the habit of setting goals they're not sure they can meet. This year, in addition to moving the line on its emissions goal, Unilever admitted it had missed the mark on its goal to rid its supply chain of deforestation by 2020, moving the goal back to 2023.
"We need a wholesale transformation of global supply chains but the size and complexity required is taking longer than I think anyone anticipated it would," Ingram said. "Certification, which was expected to be a great unlock, hasn't been adopted widely enough to become effective so we need to go further."
The company is transitioning to actively monitor its supply chain using AI and geolocation tracking and reducing the number of palm oil mills from which it sources in order to work more closely with fewer suppliers, Ingram said.
In selecting Unilever for Sustainability Plan of the Year, Supply Chain Dive recognizes the commitment involved in integrating sustainability into the everyday workings of buyer-supplier relationships in a company of Unilever's size and scope.