[PDF] Unilever Sustainable Living Plan: Progress Report 2012

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PRO?RESS REPORT 2012

UNILEVER

SUSTAINABLE

LIVIN? PLAN

STRATE?Y

ABOUT OUR REPORTIN?

The Un?lever Susta?nable L?v?ng Plan Progress Report 2012, publ?shed ?n Apr?l 2013, ?s complemented by

The onl?ne Un?lever Susta?nable L?v?ng Report for 2012? Our webs?te ?s our pr?nc?pal means of report?ng?

It ?ncludes more background to our progress on the USLP and the scope of our assurance programme

as well as more deta?led ?nformat?on on our approach to runn?ng a respons?ble bus?ness? It also conta?ns

?nd?ces that cross reference our performance to the UN ?lobal ?ompact Pr?nc?ples, the M?llenn?um Development ?oals and ?lobal Report?ng In?t?at?ve ?nd?cators? wwwun?levercom/susta?nable-l?v?ng

Un?lever's Annual Report and Accounts 2012? Mak?ng Susta?nable L?v?ng ?ommonplace, wh?ch outl?nes our bus?ness and f?nanc?al performance ?nclud?ng key f?nanc?al and non-f?nanc?al performance ?nd?cators? wwwun?levercom/?nvestorrelat?ons Boundar?es for report?ng

Th?s Progress Report 2012 covers Un?lever's global operat?ons for the per?od 1 anuary-31 December

2012 unless otherw?se stated? Data ?s prov?ded for

Un?lever's wholly owned compan?es, subs?d?ar?es

and key ?o?nt ventures and l?sted ent?t?es where we have a ma?or?ty ownersh?p?

The Un?lever Susta?nable L?v?ng Plan ?s

?ndependently assured? Further ?nformat?on on our approach to assurance can be found on page 52? In November 2010 we set out the Un?lever Susta?nable L?v?ng Plan USLP, our bluepr?nt for ach?ev?ng our v?s?on to double the s?e of the bus?ness wh?lst reduc?ng our env?ronmental footpr?nt and ?ncreas?ng our pos?t?ve soc?al ?mpact?

People expected on the planet by 2050?

populaton s growng by 200,000 a day

Unemployed today? 600 mllon obs

need to be created over the next decade hldren de every year from darrhoea and pneumona

Is acceleratng towards a temperature

rse greater than 2 degrees

Of the world could be lvng n

water-stressed condtons by 2025

Of the world"s agrcultural land s

serously degraded

In food prces expected 2010-20

Of the adult populaton s obese whle

almost 1 bllon people go hungry

The Un?lever Susta?nable L?v?ng

Plan ?s our strateg?c response to

the unprecedented challenges the world faces? It ?s at the heart of our ?ompass strategy wh?ch sets out our amb?t?ous v?s?on and purpose?

TO MAKE SUSTAINABLE

LIIN? ?OMMONPLA?E

We work to create a better future every day,

w?th brands and serv?ces that help people feel good, look good and get more out of l?fe?

Our f?rst pr?or?ty ?s to our consumers - then

customers, employees, suppl?ers and commun?t?es? When we fulf?l our respons?b?l?t?es to them, we bel?eve that our shareholders w?ll be rewarded? Un?lever Susta?nable L?v?ng Plan? Progress Report 2012 ?HIEf EXE?UTIVE OffI?ER'S REVIEW

VOLATILITYANDUN?ERTAINTY

? THENEW NORmAL

2012 proved to be another challeng?ng

year for the global economy ommod?ty markets rema?ned volat?le and costs rose s?gn?f?cantly ?n excess of expectat?ons

The threat of the world"s largest economy

go?ng over a ‘f?scal cl?ff" and the euro cr?s?s added uncerta?nty and underm?ned frag?le consumer conf?dence

Overall we cont?nue to see slugg?sh growth

?n most developed markets contrasted by relat?vely healthy consumpt?on and growth ?n asp?r?ng markets? These both have consequences ?n terms of the world's soc?al and env?ronmental equ?l?br?um?

Inequal?ty and r?s?ng levels of unemployment

espec?ally among young people - place added stra?ns on soc?al cohes?on? But the b?ggest challenge ?s the cont?nu?ng threat to planetary boundar?es', result?ng ?n extreme weather patterns and grow?ng resource constra?nts? These have an ?ncreas?ng ?mpact on people's l?ves?

Put s?mply, we cannot thr?ve as a bus?ness

?n a world where too many people are st?ll excluded, marg?nal?sed or penal?sed through global econom?c act?v?ty⬧ where nearly 1 b?ll?on go to bed hungry every n?ght, 2?8 b?ll?on are short of water and ?ncreas?ng numbers of people are excluded from the opportun?ty to work?

We rema?n conv?nced that bus?nesses that

address both the d?rect concerns of c?t?ens and the needs of the env?ronment w?ll prosper over the long term? We need to bu?ld new bus?ness models that enable respons?ble, equ?table growth that ?s decoupled from env?ronmental ?mpact?

Th?s th?nk?ng l?es at the heart of the Un?lever

Susta?nable L?v?ng Plan and our ?ompass

v?s?on of doubl?ng the s?e of the bus?ness wh?lst reduc?ng our env?ronmental footpr?nt and ?ncreas?ng our pos?t?ve soc?al ?mpact?

To ach?eve our v?s?on, we have set clear

goals to halve the env?ronmental footpr?nt of our products, to help more than 1 b?ll?on people take act?on to ?mprove the?r health and well-be?ng, to source 100% of our agr?cultural raw mater?als susta?nably and to enhance the l?vel?hoods of people across

our value cha?n? As the th?nk?ng becomes embedded ?n our bus?ness, there ?s ?ncreas?ng ev?dence that ?t ?s accelerat?ng our growth ?n ways that contr?bute to pos?t?ve change ?n people's l?ves?

Un?lever performed well ?n 2012, desp?te

d?ff?cult econom?c cond?t?ons?

Turnover ?ncreased by 10?5%, tak?ng

Un?lever through the ?50 b?ll?on barr?er,

a s?gn?f?cant m?lestone to becom?ng an ?80 b?ll?on company? Emerg?ng markets grew for the second consecut?ve year by more than 11% and now account for 55% of total bus?ness? Personal ?are and

Home ?are showed double-d?g?t growth,

?n l?ne w?th our strateg?c pr?or?t?es?

The Un?lever Susta?nable L?v?ng Plan

USLP ?nsp?res us to grow ?n l?ne w?th our

new purpose to make susta?nable l?v?ng commonplace? The lens of susta?nable l?v?ng ?s help?ng us to dr?ve brands that have a strong purpose ?n people's l?ves, to reduce costs and take waste out of the system and to dr?ve ?nnovat?on that w?ll make a pos?t?ve d?fference to the env?ronmental and soc?al challenges fac?ng us all? The Plan pushes us to th?nk ahead, reduc?ng r?sk and mak?ng the bus?ness more res?l?ent for the long term?

In 2012 we cont?nued to make good progress

del?ver?ng the Plan's comm?tments?

Our factor?es made great str?des ?n cutt?ng

energy, water and waste? For example all our US operat?ons have moved to purchas?ng the?r energy from cert?f?ed, renewable sources and more than half our s?tes worldw?de have ach?eved ero non- hazardous waste to landf?ll?

What makes our comm?tment un?que

?s that ?t ?s across the total value cha?n?

We are not only manag?ng our own and

upstream operat?ons, but we are also determ?ned to help people to l?ve more susta?nably through the ?mpact of our products ?n the?r l?ves?

We have ma?nta?ned the momentum

towards our target of sourc?ng all our agr?cultural raw mater?als susta?nably, reach?ng 36% by the end of 2012? All our palm o?l ?s now covered by ?reenPalm cert?f?cates? We have made a start ?n buy?ng

Susta?nable L?v?ng Plan? Progress Report 2012

Our Plan has three b?g goals to ach?eve by 2020?

Help more than 1 b?ll?on people ?mprove the?r health and well-be?ng? Halve the env?ronmental footpr?nt of our products? Source 100% of our agr?cultural raw mater?als susta?nably and enhance the l?vel?hoods of people across our value cha?n?

THE UNILEVER SUSTAINABLE LIVIN? PLAN

HALLEN?ESREMAIN

WORKIN?WITHPA RTNERS

LOOKIN?AHEAD

Warm regards

Paul Polman

3hef Executve Offcer"s Revew Un?lever

OURVI SIONDOUBLE THE

SIZEOFT HEBUS INESS ,WHILST

REDUINOURENVI RONMENT AL

FOOTPRINTANDINRE ASIN

OURPO SITIVESOIALIMPA T

We w?ll lead for respons?ble growth, ?nsp?r?ng people to take small everyday act?ons that w?ll add up to a b?g d?fference We w?ll grow by w?nn?ng shares and bu?ld?ng markets everywhere ??????

The volat?l?ty and uncerta?nty fac?ng the

world rema?n the ‘new normal" and are set to last for the med?um term These ongo?ng pressures- econom?c, soc?al and env?ronmental - frame our approach to our bus?ness strategy and our bus?ness model

We call our bus?ness strategy ‘the ompass",

s?nce ?t sets out a constant path for Un?lever for the long term The ompass lays out our amb?t?ous v?s?on and purpose, and def?nes four ‘W?nn?ng w?th" p?llars w?th?n the

bus?ness that w?ll help us ach?eve both brands and ?nnovat?on marketplace cont?nuous ?mprovement and people Our performance aga?nst these p?llars ?s expla?ned ?n our Annual Report and Accounts 2012 F?rst developed ?n 2009, the ompass was sharpened ?n 2012 but ?ts core elements rema?ned the same

In 2012 we added our new purpose -

“To make susta?nable l?v?ng commonplace"

Th?s bu?lds on the or?g?nal purpose of

our 19th century founder, W?ll?am Lever,

“to make cleanl?ness commonplace" The ompass g?ves l?fe to our determ?nat?on to bu?ld a susta?nable bus?ness for the long term and to f?nd new ways to operate that do not ust take from soc?ety and the env?ronment Th?s ?s captured ?n the Un?lever Susta?nable L?v?ng Plan (USLP)

Susta?nable L?v?ng Plan Progress Report 2012

The outputs of the model are

threefold susta?ned growth lower env?ronmental ?mpact and pos?t?ve soc?al ?mpact

These al?gn d?rectly w?th

our v?s?on statement

The d?agram below represents

our v?rtuous c?rcle of growth

It summar?ses, s?mply, how we

der?ve prof?t from the appl?cat?on of our bus?ness model

Strong brands and ?nnovat?on

are central to our amb?t?on to double ?n s?ze We are ?nvest?ng ?n brand equ?ty, f?nd?ng and strengthen?ng the connect?ons between consumers and the products they buy Where equ?ty ?s strong, we are leverag?ng ?t - creat?ng eff?c?enc?es by focus?ng on fewer, b?gger proects that enhance marg?ns And we are seek?ng super?or products wh?ch consumers w?ll prefer,

dr?v?ng prof?table growth Our bus?ness model ?s des?gned to del?ver susta?nable growth? For us, susta?nab?l?ty ?s ?ntegral to how we do bus?ness? Ina world where temperatures are r?s?ng, water ?s scarce, energy ?s expens?ve, san?tat?on ?s poor ?n many areas and food suppl?es are uncerta?n and expens?ve, we have both a duty and an opportun?ty to address these ?ssues ?n the way we do bus?ness?

The ?nputs to the model, l?ke

those of all maor packaged goods manufacturers, are threefold brands people and operat?ons These map d?rectly on to our ompass ‘W?nn?ng w?th" p?llars- both cont?nuous ?mprovement and the market place p?llars support the operat?ons strand of the model

The d?fferent?ator ?n our

bus?ness model ?s our USLP and the goal of susta?nable l?v?ng

For us, susta?nable, equ?table

growth ?s the only acceptable bus?ness model Bus?ness needs to be a regenerat?ve force ?n the system that g?ves ?t l?fe For example, by reduc?ng waste, we create eff?c?enc?es and reduce costs, help?ng to ?mprove marg?ns wh?le reduc?ng r?sk Meanwh?le, look?ng at more susta?nable ways of develop?ng products, sourc?ng and manufactur?ng opens up opportun?t?es for ?nnovat?on wh?le ?mprov?ng the l?vel?hoods of our suppl?ers

On any g?ven day 2 b?ll?on

consumers use our products and we want to reach many more, by develop?ng ?nnovat?ve products that address d?fferent consumer needs at d?fferent pr?ce po?nts To do th?s we use our global scale to help del?ver susta?nable, prof?table growth by seek?ng to add value at every step ?n the value cha?n by enhanc?ng product qual?ty and customer serv?ce, and roll?ng out ?nnovat?ons faster across all markets

Susta?nable, prof?table growth

can only be ach?eved w?th the r?ght people work?ng ?n an organ?sat?on that ?s f?t to w?n, w?th a culture ?n wh?ch performance ?s al?gned w?th values We are ?ncreas?ngly an ag?le and d?verse bus?ness w?th people mot?vated by do?ng good wh?le do?ng well We are bu?ld?ng capab?l?ty and leadersh?p among our people and attract?ng some of the best talent ?n the market place

Prof?table volume growth ?s the bas?s of the

v?rtuous c?rcle of growth Stronger brands and ?nnovat?on are the key dr?vers beh?nd ?t ons?stently strong volume growth bu?lds brand equ?ty as we reach more consumers, more often

Prof?table volume growth allows us

to opt?m?se the ut?l?sat?on of our ?nfrastructure and spread f?xed costs over a larger number of un?ts produced, reduc?ng the average cost per un?t

It ?mproves our prof?tab?l?ty and allows

us to ?nvest ?n the bus?ness

Lower costs and ?mproved eff?c?ency enable

us to strengthen our bus?ness further

New and ?mproved products are the result

of? nvestment ?n R&D and, together w?th effect?ve market?ng, strengthen our brand equ?ty Th?s results ?n prof?table volume growth, self-perpetuat?ng the v?rtuous c?rcle of growth

Susta?nable L?v?ng Plan Progress Report 2012

EMBEDDIN? SUSTAINABILITY

OUR BUSINESS STRATE?Y

W?th 7 b?ll?on people on our planet, the earth's

resources can be stra?ned? Th?s means susta?nable, equ?table growth ?s the only acceptable model of growth for our bus?ness?

We bel?eve growth and susta?nab?l?ty are

not ?n confl?ct? In fact, ?n our exper?ence, susta?nab?l?ty dr?ves growth?

By focus?ng on susta?nable l?v?ng needs,

we can bu?ld brands w?th a s?gn?f?cant purpose? By reduc?ng waste, we create eff?c?enc?es and reduce costs, wh?ch

helps to ?mprove our marg?ns? By tak?ng a long-term v?ew, we can reduce r?sk, forexample secur?ng raw mater?al supply through susta?nable sourc?ng? And we have found that once we start look?ng at product development, sourc?ng and manufactur?ng through a susta?nab?l?ty lens, ?t opens up great opportun?t?es for ?nnovat?on?

Our product category and funct?onal

teams are play?ng a central role ?n dr?v?ng susta?nable growth? They rev?ew progress aga?nst the?r targets quarterly? And ?n

2012 we asked our bus?nesses ?n our

largest markets to ?dent?fy a small number of pr?or?ty areas where they can harness the Plan to dr?ve growth, such as handwash?ng w?th L?febuoy soap ?n Ind?a and the Dove Self-Esteem Pro?ect ?n the US?

We are l?nk?ng progress to reward w?th

susta?nable bus?ness goals ?n the remunerat?on of a grow?ng number of managers? Th?s ?ncludes the ?EO and several members of the Un?lever Leadersh?p Execut?ve? We have susta?nab?l?ty champ?ons cover?ng every key funct?on, category and country?

BRANDSANDINNOVATION

We are accelerat?ng the ?ntegrat?on of

susta?nab?l?ty ?nto our brands? Brands are develop?ng the?r own USLP amb?t?on - for example Knorr has chosen susta?nable sourc?ng? Our Brand Impr?nt model enables us to take a 360-degree v?ew of the soc?al, env?ronmental and econom?c ?mpacts of brands and - among other outputs tr?ggered L?pton's dec?s?on to source ?ts tea susta?nably? We are now apply?ng the

methodology to help brands make a susta?nable bus?ness contr?but?on ?n l?ne w?th the?r pos?t?on?ng? S?m?larly, our F?ve Levers for ?hange methodology ?s help?ng our brands prompt consumers to adopt new behav?ours see page 15?

Innovat?on ?s cr?t?cal to ach?ev?ng our

susta?nable l?v?ng goals? We are comm?tt?ng a s?gn?f?cant proport?on of our RD budget to f?nd?ng susta?nab?l?ty-led technolog?es?

We are also support?ng the commerc?al?sat?on

of ?nnovat?ve technolog?es through our ?nvestment arm, Un?lever entures?

In 2012 our Open Innovat?on team launched

an onl?ne system wh?ch offers outs?de experts the chance to work w?th Un?lever on research pro?ects ?n a number of areas that w?ll promote susta?nable l?v?ng, such as cold-water wash laundry products?

We have rece?ved 150 subm?ss?ons rang?ng

from packag?ng des?gn to energy-eff?c?ent processes?

We have updated the tools we use to evaluate

the env?ronmental ?mpacts of new products and packag?ng, known as Innovat?on Process

Management? We use a s?mple traff?c l?ght

system to compare the potent?al ?mpacts of an ?nnovat?on w?th the products we currently market as well as the ?mpacts on our category portfol?o?

THEMARKETPLAE

Many reta?lers have susta?nab?l?ty goals?

For the last three years we have worked

on A Better Future Starts at Home, a ?o?nt shopper programme w?th Tesco? It comb?nes adv?ce on susta?nable l?v?ng w?th promot?ons of susta?nable products? N?ne countr?es from the UK to ?h?na have run the programme? INVESTINGINSUSTAINABLEBUSINESS INNOVATIONINMANUFACTURING

Through Un?lever entures, we are ?nvest?ng ?n early and m?d-stage Many employees have susta?nable bus?ness ?deas and our

compan?es w?th new technolog?es and compell?ng bus?ness models Manufactur?ng team has set up a Small Act?ons, B?g D?fference

that are of strateg?c relevance to Un?lever? Susta?nable bus?ness ?s budget to make them happen? a key factor ?n th?s m?x? Factory employees can apply for ?nvestment for the?r ?deas wh?ch are

Our portfol?o ?ncludes a number of ?nnovat?ve start-ups from the green evaluated on the bas?s of env?ronmental benef?t and f?nanc?al return?

tech and low-carbon sectors, such as Recyclebank see page 37? In 2012 over 600 pro?ects were ?dent?f?ed and the best 100 w?ll be

In 2013 we are launch?ng a new Susta?nable Bus?ness enture Fund ?mplemented ?n 2013? The?r comb?ned benef?ts w?ll del?ver sav?ngs

w?th ?50 m?ll?on allocated to ?nvestment ?n new bus?nesses wh?ch of around 1% of our global energy and water use and ach?eve an

spec?f?cally support our USLP goals? average pay back of under two years? 6 Embeddng Sustanablty Unlever Susta?nable L?v?ng Plan? Progress Report 2012

WORKIN?WITHOURSUPPLIERS

PEOPLE

OLLABORATIONWITH PARTNERSHIPS

UNILEVER'S ?REENHOUSE ?AS fOOTPRINT (SEE PA?E 25)

Spans our ent?re portfol?o of brands and all countr?es ?n wh?ch we sell our products? Has a soc?al and econom?c d?mens?on - our products make a d?fference to health and well-be?ng, and our extended supply cha?n supports the l?vel?hoods of many people? When ?t comes to the env?ronment, we work across the whole value cha?n - from the sourc?ng of raw mater?als to the way consumers use our products?

THREE KEY FEATURES OF OUR PLAN

WEW ORK AROSSTHEVALUEH AIN

25% 4% 2% 1%68%

Raw mater?als Manufacture Transport ?onsumer use D?sposalquotesdbs_dbs45.pdfusesText_45

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