London / Rotterdam – Unilever announced on April 2 that it is now sourcing more than a third of its agricultural raw materials sustainably, having made significant progress towards its target of 100% by 2020.
With 36% now sourced sustainably, it has exceeded the interim milestone of 30% it set itself in 2010 when launching the Unilever Sustainable Living Plan. The improvement was made against a backdrop of the company reporting annual sales of €51 billion in 2012. Taken together, they represent significant milestones on the way to realising Unilever’s vision of doubling the size of its business whilst reducing its environmental footprint and improving its positive social impact. This announcement comes ahead of the upcoming Unilever Sustainable Living Plan Progress Report which will be released on 22 April.
Marc Engel, Chief Procurement Officer said, “Climate change, water scarcity, unsustainable farming practices, and rising populations all threaten agricultural supplies and food security. Half of the raw materials Unilever buys are from the farming and forestry industries, so ensuring a secure supply of these materials is a major business issue. However, sustainable sourcing is not only about managing business risks, it also presents an opportunity for growth, allowing brands to stand out in the marketplace.”
One example is how Knorr has supported sustainable growth for the Foods category. In September 2012, a new soup launched in France became the first Unilever product to promote an ingredient (tomatoes) as sustainably grown in accordance with the Unilever Sustainable Agriculture Code. This was made possible through the Knorr Sustainability Partnership Fund, which uses €1 million a year to support vegetable suppliers on complex sustainable agriculture projects. This development has boosted shelf standout and competitive differentiation and now Knorr plans to continue to label other products.
For cocoa, 43% was sourced sustainably by the end of 2012. And 64% of cocoa for Magnum was sustainably sourced through Rainforest Alliance Certification. To achieve certification, Unilever has been working with supplier Barry Callebaut to run farmer field schools with 20,000 small farmers across West Africa. The schools work with local farmers to build skills and knowledge around sustainable cultivation practices. Then the farmers spread the knowledge through the community. Magnum also shares with its consumers why it works with Rainforest Alliance to source cocoa sustainably: to source high-quality cocoa beans, to increase the income of farmers and deliver social benefits such as improved health and safety practices.
“Investing in smallholder farmers is critical: so far 450,000 have been trained. If smallholders have access to training, better quality seeds and fertilisers, they can significantly increase their yields. We know we cannot do this alone which is why we are forming strategic partnerships with suppliers through our Partner to Win programme, NGOs and other stakeholders,” Engel adds.
Other examples of progress in sustainable sourcing include:
- All palm oil is now covered by GreenPalm certificates. Unilever is working towards the new commitment to 100% certified sustainable palm oil which is traceable back to the plantations on which it is grown. In 2012, Unilever joined key players in industry and government for the China Sustainable Palm Oil Supply Chain Forum, for talks on promoting faster uptake in China, the world’s second-largest consumer of palm oil.
- Unilever has purchased its first ever Bonsucro sustainable sugar credits in Brazil, and has become the first ever Bonsucro member to obtain these worldwide. Working with Usina Sao Joao, Unilever purchased the first 3262 tonnes of Bonsucro sustainable sugar credits in Brazil when the credit platform opened for business in December 2012. While Unilever is not a major player in the global sugar cane stakes, accounting for just 0.26% of the market, the credit purchase highlighted Unilever’s commitment to reducing the environmental and social impacts of sugar cane production.
- A collaboration with Symrise, one of the world’s largest vanilla suppliers, has led to Unilever’s first Rainforest Alliance (RA) certified vanilla beans. Together through the partnership, Symrise has trained more than 1,100 farmers – with almost 5,000 more set to benefit from the programme. Symrise is working directly with farmers to improve the quality of vanilla production through farmer training. They are building traceability in the vanilla supply chain to enable Unilever to trace the vanilla from the field to the consumer.
- In South Africa, Unilever has been working with supplier Ceoco to improve traceability in the supply chain. A farming community was identified in Limpopo with good practices that could initially pilot the project. Unilever and Ceoco have since worked with the farmers by providing financial incentives to develop hybrid seeds with higher yields. The oils can then be traced right back to the individual farms where the seeds were grown. The next step will be to scale-up the project and roll it out to different provinces and more farmers.