About our strategy
We have a simple but clear purpose – to make sustainable living commonplace.
Our business strategy
We call our business strategy document ‘the Compass’, since it sets out a constant path for Unilever for the long-term. First developed in 2009, it was sharpened in 2015 but its core elements remained the same. The Compass lays out our distinct Purpose to make sustainable living commonplace and our Vision to grow our business, whilst decoupling our environmental footprint from our growth and increasing our positive social impact.
Making sustainable living commonplace
We are developing new business practices that grow our company and communities, meeting people’s ever-increasing desire for more sustainable products and creating a brighter future for everyone. We are helping to build a world where everyone lives well and within the natural limits of the planet:
- Brands that offer balanced nutrition, good hygiene and the confidence that comes from having clean clothes, clean hair and good skin.
- Products which are sustainably sourced and used in a way which protects the earth’s natural resources.
- Respect for the rights of the people and communities we work with throughout the world.
We are leveraging our global reach to engage consumers through brightFuture which is our global initiative to motivate millions of people to live sustainably by taking small, everyday actions that make a big difference to the world.
What we are finding is that this approach is contributing to our business success. In 2015, our 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.
The Unilever Sustainable Living Plan
We aim to achieve our social and environmental ambitions through the Unilever Sustainable Living Plan, which helps to identify areas of opportunity for brand-led growth, cost savings and future profit. Launched in 2010, the Unilever Sustainable Living Plan is our blueprint for sustainable growth. It is our strategic response to the challenges we face in doing business in an uncertain and volatile world. The Plan is helping to drive profitable growth for our brands, save costs and fuel innovation.
Our Plan sets out three big goals:
- Improving Health and Well-being: By 2020 we will help more than a billion people take action to improve their health and well-being.
- Reducing Environmental Impact: By 2030 our goal is to halve the environmental footprint of the making and use of our products as we grow our business.*
- Enhancing Livelihoods: By 2020 we will enhance the livelihoods of millions of people as we grow our business.
Underpinning these goals are nine commitments supported by targets spanning our social, environmental and economic performance. For each of our targets, we have established objective measurement techniques, including appropriate estimates and assumptions.
The Unilever Sustainable Living Plan will help us grow our business, whilst decoupling our environmental footprint from our growth and increasing our positive social impact.
Our Plan is distinctive
The differentiator in our business model is the Unilever Sustainable Living Plan and our Purpose of making sustainable living commonplace. Our Plan is helping to drive profitable growth, reduce costs and fuel innovation. Our Plan is distinctive in three ways:
- It spans our entire portfolio of brands and all countries in which we sell our products.
- It has a social and economic dimension – our products make a difference to health and well-being and our business supports the livelihoods of many people.
- When it comes to the environment, we work across the whole value chain – from the sourcing of raw materials to our factories and the way consumers use our products.
Through the Unilever Sustainable Living Plan we have set a bold ambition to achieve change within our own company - through our brands, innovation, sourcing and operations. But we are only one company among many and the change needed to tackle the world's major social, environmental and economic issues is big and urgent.
What’s really needed are changes to the broader systems of which we are a part – whether that is in food, energy or health.
So at Unilever we have set out to make a transformational difference to those big issues that matter most to our business and the world. We are deepening our efforts in three areas where we have the scale, influence and resources to create ‘transformational change’. By that we mean fundamental change to whole systems, not simply incremental improvements. These areas are:
- Eliminating deforestation from commodity supply chains by 2020, to help combat the threat from climate change.
- Making sustainable agriculture the mainstream, and so increase food yields and enhance the livelihoods of smallholder farmers.
- Working towards universal access to safe drinking water, sanitation and hygiene.
In all three areas, the role of women is crucial. Empowering women is critical to eradicating poverty and accelerating global development. We are going beyond what we can achieve in our own operations and with our suppliers, we are stepping up our engagement to work with governments, NGOs and others in our industry on these issues. By working together, we believe that fundamental change is possible in the near term.
When we launched the Unilever Sustainable Living Plan in 2010, we knew that many challenges and uncertainties would need to be addressed. Since then we have made good progress, particularly in the areas where we have direct control. We now have good evidence that our ambition to make sustainable living commonplace is helping to drive business growth.
However big challenges remain, especially in those areas outside our own operations in reducing our environmental impact in the value chain. While we continue to make good progress with reducing water use, waste and greenhouse gas emissions in our factories, the greenhouse gas (GHG) impact of our products per consumer use continues to edge up and has increased by 6%† since 2010. Water impact during consumer use when they shower, bathe or clean with our products, accounts for the majority of the water use in our value chain, which has only reduced by around 1%† since 2010.
Since we launched our Plan in 2010, we have learned which levels we can pull on our own to effect change and those we cannot, and where changes to wider systems are needed. As a result of this, we have sharpened our GHG strategy and are sharpening our internal water strategy. We remain committed to a full value chain approach to reducing our environmental impact, since that most meaningfully reflects the true impact of our business.
Adoption of the UN Sustainable Development Goals (SDGs) and the Paris Agreement at the UN Climate Conference (COP21) in 2015 set out the global intent to end poverty and prevent run-away climate change. These have created an unprecedented movement of private sector action in support of the ambitious global deal. Our Unilever Sustainable Living Plan, sustainable living brands and our transformational change agenda are all ways in which we are seeking achieve the overarching goal of a ’zero poverty and zero carbon’ world.
For 15 out of the last 16 years, Unilever has led the Food, Beverage and Tobacco industry group of the Dow Jones Sustainability Index (DJSI). In 2015, we were named Industry Group Leader with a score of 92 out of 100 and awarded a Gold Class distinction for our sustainability performance by RobecoSAM in their Sustainability Yearbook 2016.
In 2015, Unilever retained its top ranking in the latest Sustainability Leaders survey from GlobeScan/SustainAbility for the sixth consecutive year.
In 2015, Unilever was one of the 113 companies globally awarded an ‘A’ for climate performance in ‘The A List: The CDP Climate Performance Leadership Index Report 2015,’ produced by international NGO CDP (formally the Carbon Disclosure Project). Unilever scored maximum Disclosure points – 100 out of 100 – up from 15 points on our 2013 score and one point on our 2014 score.
* In 2016 we extended the date of our GHG pillar commitment from 2020 to 2030. This extension from 2020 to 2030 also applies to our Reducing Environmental Impact Big Goal of halving the environmental footprint of the making and use of our products as we grow our business. Our Water and Waste pillar commitments remain at 2020.
† Independently assured by PwC