Unilever takes tougher stance on supply-chain emissions

Unilever’s new climate transition plan has a sharper focus on cutting emissions from suppliers in its drive to achieve net-zero status by 2039.

The updated strategy showcases Unilever CEO Hein Schumacher’s decision to downplay aspirational commitments and play up operational specifics, such as replacing ingredients and chemicals with a higher environmental impact.

“They’ve illustrated a clear path, in simple terms, for how they intend to achieve consequential progress,” said Ken Pucker, professor of practice with the Tufts Fletcher School. He described the level of transparency as “refreshing.”

The most significant shift is the London-based company’s call for an absolute cut of 42 percent in the energy and emissions from ingredients, packaging, transportation and distribution, sold products — even the refrigerators it leases to keep ice cream frozen — by 2030. Separately, it is pledging a 30.3 percent reduction in forest, land and agriculture emissions, also in the same timeframe.

This is the first time the company behind Ben & Jerry’s, Dove, Hellmann’s, Knorr and other well-known brands has called for absolute cuts in Scope 3, which covers what’s emitted by suppliers and customers in the production and use of a company’s products. Approximately 98 percent of the company’s emissions come from this category.

Unilever previously focused on reducing the “emissions intensity” of its products, and it has cut that rate by 21 percent since 2010. “The development of these plans has been informed by significant improvements in the measurement of our GHG emissions, allowing us to build more granular action plans,” Unilever said. Those measurements were informed by the latest assessment of the Intergovernmental Panel on Climate Change and the new Greenhouse Gas Protocol guidance on land sector use, the company said. 

Unilever’s new emissions math

The new commitments use a revised 2021 baseline: 56 million metric tons of greenhouse gas emissions. 

Unilever’s total emissions are 121 million metric tons but that includes 65 million metric tons of “indirect consumer use.” For example, the hot water used to wash your hands with Dove soap. Unilever opted not to include indirect consumer emissions, as those aren’t required by the Science Based Targets initiative, a body that validates corporate action against the Paris Agreement goals.

The company is pledging a 100 percent absolute reduction by 2030 in the emissions it can most control — Scope 1 (its own operations) and Scope 2 (for purchased fuel and energy.) That goal is set against a 2015 baseline, and it has already achieved a 74 percent cut. It will invest $163 million over the next three years in equipment electrification, replacing natural gas with biofuels, and introducing solar thermal technology for industrial applications.

Anything it hasn’t been able to reduce outright by 2039 will be balanced with carbon removal purchases, according to the blueprint.

Detailed agenda for tackling Scope 3

Here’s a breakdown of where Unilever thinks those Scope 3 cuts will come from. These measures will account for two-thirds of what’s needed to make the 2030 goal, the company said.

• 19 percent — energy efficiencies from 3 million-plus ice cream freezers, a measure that will include raising the base temperatures and using renewable energy.
• 14 percent — partnerships with 300 of its most emissions-intensive suppliers, to be in place by the end of 2024; detailed carbon footprints are already being gathered from about 100 of them.
• 13 percent — product reformulations that increase the use of plant-based ingredients and decrease dependence on commodities such as palm oil; the company’s joint venture with Genomatica, supported by the $1.09 billion in the Unilever Climate & Nature Fund is one example of the innovation necessary
• 7 percent — developing alternatives for aerosol propellants in the U.S. and Canada.
• 6 percent — changes in production processes for two chemicals used in cleansers and laundry detergent, soda ash and linear alkylbenzene sulphonate.
• 4 percent — moving 1.6 million acres of the company’s land footprint to regenerative agriculture by 2027.
• 3 percent — reducing packaging and transitioning to recycled and renewable sources instead of virgin plastic.
• 2 percent — redesigns to Unilever’s logistics network to improve freight efficiency; and the purchase of electric and alternative vehicles.

Shareholders consulted, will vote in May

Unilever’s biggest shareholders were consulted during the development of the plan, Schumacher said.

“We were pleased that the key elements of the plan — the new higher ambition near-term Scope 3 GHG reduction targets, the continued focus on absolute emissions reductions rather than carbon offsetting, and the shift to focus on the specific Scope 3 emissions which we believe we can influence — were widely welcomed,” he said.

Shareholders will have an opportunity to vote on the plan at the company’s next annual meeting, typically held in May. If the resolution receives less than 80 percent support, “we would comply with the U.K. Corporate Governance Code and consult shareholders as to why this was the case,” according to a spokesperson.

Unilever, among 239 companies to receive a “commitment removed” status change from SBTi in early March, has submitted its updated plan for approval. “We expect to receive approval from the SBTi for these targets shortly,” the company said through a spokesperson.