A Fresh Eye Toward Climate Change
Bigger Role Expected from Businesses
Over the past decade, public’s understanding of the global climate and economic system has changed dramatically. With it, the mind-set, roles and responsibilities of businesses have also changed in response to the requirements to operate efficiently and sustainably in this resource-constrained world.
Traditional companies, who used to see sustainability as an environmental or development issue, now understand it’s also a business and economic imperative. Last year, for the first time, the global economy grew without materially increasing carbon dioxide emissions. This signals and reconfirms that it’s feasible and inevitable for businesses to go down the pathway of sustainability.
Value Delivered by Sustainability
Unilever, in particular, has seen the benefit and value delivered by suitability in four aspects.
Exhibit 1: Unilever’s Four-point framework: Impact of sustainability on business success.
More Growth: Sustainability creates innovation opportunities, pushing the company to rethink product design and innovate in a world of finite resources.
Lower Cost: By cutting waste and reducing the use of energy, raw materials and natural resources, Unilever create efficiencies and cut costs, while becoming less exposed to price volatility.
Less Risks: Operating sustainably helps Unilever to future proof its supply chain against the risks associated with climate change and sourcing materials.
More Trust: Placing sustainability at the heart of the business model helps Unilever stay relevant to consumers, and strengthens relationships with stakeholders.
Unilever Sustainable Living Plan
Unilever has initiated a 10- year Sustainable Living Plan to double its business while halve environmental impact, by partnering with suppliers, customers and consumers throughout the “value chain”.
Exhibit 2: The Value Chain Defined in Unilever’s Sustainability Living Plan
Greenhouse gas, one of the biggest causes of climate change, is emitted by throughout the value chain. Zooming into each component of the value chain, it is clear that Raw Materials (29%) and Consumer Usage (61%) are the two biggest drivers for Greenhouse Gas emission. Unilever started several initiatives to reduce the volume of emission from those major sources.
Exhibit 3: Unilever Greenhouse Gas Footprint 2014-2015
Eco-sourcing: Drive Sustainability in Raw Material
Growing for the future, sustainable sourcing has never been more important. Unilever supported the initiative of sustainable agriculture – farming methods that minimize the impact to environment while increase yield.
Take Lipton, the world’s best-selling tea, available in over 100 countries with annual sales of around €3 billion, as an example. In 2007, Unilever became the first major tea company to commit to sustainably sourcing tea on a large scale. By now, 66% of Lipton’s total volumes are from sustainable sources.
Exhibit 4: Lipton Tea Plantation
Eco-packs: Loved by Consumers and Better to the Planet
Unilever is dedicated to continually innovate in order to reduce the amount of resources used in packaging, and focus on using lighter, stronger and better materials with a lower environmental impact. In the marketplace, it’s also often seen that Unilever launched concentrated or compressed versions of products to achieve the same or higher efficacy with less resources consumed.
Exhibit 5: Packaging Redesign Using Lighter Cap in Deodorant Product
Eco-education: Engaging Consumers on Sustainability
Unilever has a long history of using marketing and market research to promote behavior change through its brands. In recent years, sustainability becomes a “must-have” topic in most brand communications. For instance, Comfort One Rinse’s campaign explains to consumers that they only need one bucket of water for rinsing their clothes rather than three, helping them to save water.
Exhibit 6: Comfort One Rinse’s Campaign Communication
Exhibit 7: Halve Environmental Impact by Joint Efforts from Unilever, Supplier and Consumer
“It had been easier to achieve environmental targets directly within the company’s control, but it was now looking to develop more innovative solutions to reduce consumer energy use.” Said Paul Polman, chief executive of Unilever.
Two thirds of the Greenhouse Gas impacts in the value chain in consumer use, primarily heated water for showering and bathing. External factors such as decarbonizing energy grids and effective carbon pricing will also play a critical role in reducing Greenhouse Gas emissions. Progresses on climate change Greenhouse Gas reduction are highly correlated with consumer behavior and external factors. How will Unilever effectively tackles the challenge of changing consumer behavior? Will consumer buy into the concept of “sustainability” more than pure product functionality?
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 Unilever Sustainable Living Plan, https://www.unilever.com/sustainable-living/
 Why Sustainability Is No Longer a Choice (Op-Ed), http://www.livescience.com/53897-exclusive-unilever-ceo-on-sustainability-as-team-effort.html
 Climate change leadership puts Unilever on ‘A List’ for fifth year, https://www.unilever.com/news/news-and-features/2016/climate-change-leadership-puts-unilever-on-A-List-for-fifth-year.html
 Sustainability at Unilever – The Value Chain, https://www.youtube.com/watch?v=cpYhgqPRivw
 Unilever struggles to sell customers on Sustainable Living, https://www.greenbiz.com/blog/2014/04/29/unilever-struggles-sell-customers-sustainable-living