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Unilever plc CDP Forests Questionnaire 2022 01 August 2022
Are you able to provide a potential financial impact figure?
Yes, a single figure estimate
Potential financial impact (currency)
900,000,000
Potential financial impact figure - minimum (currency)
Potential financial impact figure - maximum (currency)
Explanation of financial
We assumed up to 2030, society acts with measures to restrain deforestation &
emissions (i.e., implementing carbon pricing at $75-$100 p/tonne, based on IEA’s 450
scenario). In the 2°C scenarios, assumed no significant impact to our business from
physical climate change by 2030 & focused on regulatory changes. Main elements of a
2°C scenario are: carbon pricing in key countries, increasing both manufacturing & raw
material costs, & zero net deforestation requirements introduced & a sustainable
agriculture shift puts pressure on production, raising the price of certain raw materials.
Our methodology forecasts future yields (crop-specific & climate models). The price
model uses a range of supply & demand drivers to determine impact on yield from direct
risks of climate change, isolating factors such as acreage & technology on price. Three
modelling steps were performed: 1) Yield estimation: Analysis of crop & climate models
to forecast a range of expected yields in key growing regions. 2) Price relationship: An
econometric model was developed, based on an analysis of raw material market &
historical trends, to estimate the impact of climate-induced yield changes on future
prices. The model looks at impact of yield changes on prices from other important
factors (i.e. acreage, farming tech, extreme weather & man-made factors).
3) Impact estimation: Future yields & price impacts translated into estimated financial
exposure for our business, using our forecast procurement volumes.
Primary response to risk
Engagement with suppliers
Description of response
We manage the increased production costs and price risk through our overall strategy of
purposeful procurement, which includes sustainable and deforestation-free sourcing.
We have an ongoing commitment under our Compass strategy to sustainably source
100% of our soy volumes (no end date). We invest in farmer programs to increase the
supply of certified volumes from diverse sources. In the US our work with the Field to
Market alliance and Practical Farmers of Iowa supports farmers to improve soil health
and water quality. In Latin America we’ve been part of long-term collaborative efforts to
improve the sustainability of soy cultivation, including driving certification with RTRS and
Proterra. In addition, our zero-deforestation target commits us to end any deforestation
in our soy supply chain by 2023. Our action to end deforestation drives a transformation
in how and with whom we partner in our extended supply chains, which we will realise in
line with our 2023 target date. We are changing our supply chain, we are transparent
about where we purchase soy from and publish a list of our direct suppliers. We’re
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investing in technology for transparency and traceability of our materials, including AI
and blockchain.
Cost of response
10,000,000
Explanation of cost of response
The cost represents (A) our investments in sustainable sourcing of soy. This includes,
incentives for farmers participating in our US Mid-West program ($10/ acre of cover
crops planted) (B) impact programs, program costs like that of our Brazil program,
where we support farmers to achieve compliance with RTRS (programme cost of €11.8
per tonne of purchased certified volume), as well as payment for RTRS certificates, (C)
costs of Proterra certification of soy beans and (D) our investment to source from low
risk origins, from certified segregated supply chains where needed and particular
projects like our recently announced investments to build a deforestation free supply
base in Brazil. Cost of management = (A) + (B) + (C) + (D) = 10,000,000€.
Forest risk commodity
Other - Cocoa
Type of risk
Reputational and markets
Geographical scale
Global
Where in your value chain does the risk driver occur?
Supply chain
Primary risk driver
Negative media coverage
Primary potential impact
Brand damage
Company-specific description
Increasing consumer awareness of the impact of commodity supply chains on forests
could cause a boycott of products containing cocoa. According to Sigwatch, in 2021, two
top issues campaigned for in the Home & Personal Care sector were
health/environmental impact of cosmetics & toiletry products and green marketing
claims/greenwashing. While only some campaigns are consumer-facing, supply chain
traceability & deforestation are of high importance to both consumers & NGOs. Boycotts
& campaigns could cause reputational damage to Unilever brands with a potential
impact on shareholder value.
Cocoa is a key ingredient for Magnum & other ice cream brands. A boycott could be
carried out by a small part of our consumer base, mainly those who care about
sustainability in developed markets. However small this impact may be, sustainability
sits at the heart of our business strategy, so we want to manage every supply chain risk.
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We work closely with our suppliers to achieve our commitment to source 100%
deforestation-free cocoa by end of 2023. 85% of the cocoa we purchase is produced in
Côte d'Ivoire & Ghana - considered high deforestation risk. We do this by sourcing
cocoa products certified against deforestation-free requirements. Our brand, Ben &
Jerry’s, achieved FairTrade certification for all its cocoa in 2014. In 2021, Unilever
sustainably sourced 99% of cocoa as di and Fairtrade certified. Based on these efforts,
we estimate financial impact to be limited.
Timeframe
1-3 years
Magnitude of potential impact
Low
Likelihood
About as likely as not
Are you able to provide a potential financial impact figure?
Yes, an estimated range
Potential financial impact (currency)
Potential financial impact figure - minimum (currency)
42,000,000
Potential financial impact figure - maximum (currency)
69,000,000
Explanation of financial
We calculated the potential financial risk to the business from a boycott of cocoa should
Unilever not respond to the risk with mitigating actions. We used the following scenario:
A) We assumed that 33% of consumers are buying products with sustainability in mind,
which is a statistic from our 2015 research that assessed consumers’ buying behaviour
(versus their purchase intentions); x (B) our multi-year underlying sales growth estimate
of 3-5% for 2021 to determine the impact of that 33% on growth based on where
consumer awareness is highest (Europe & North America); x (C) turnover from our Ice
Cream business (our biggest cocoa-using category).
The lower range estimate is based on the impact on 3% of growth & the upper range on
the impact on 5% of growth. A (consumers) x B (growth estimate) x C (turnover) = our
estimate of D of €42-69m. This estimate is based on annual growth lost, so over a
prolonged period, we could see a potential impact of more than €69m.
Primary response to risk
Engagement with suppliers
Description of response
Cocoa is a key ingredient in our ice cream business & Unilever committed to sourcing
100% of our cocoa sustainably by 2020 as part of the Unilever Sustainable Living Plan
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(USLP). Post the USLP, we have continued our commitment in sustainably sourcing
cocoa. In 2021, Unilever sustainably sourced 99% of its cocoa as Rainforest Alliance
and (RA), and Fairtrade certified.
We then set ourselves the goal of going further with programs that work with certification
& bring us closer to growers.
In 2018, Unilever became a signatory of the Cocoa & Forests Initiative organized by
World Cocoa Foundation, IDH - the Sustainable Trade Initiative, & The Prince of
Wales’s International Sustainability Unit. Many of the 35 signatories are our cocoa
suppliers & the industry has been strongly committed to accelerating economic, social &
environmental sustainability in the cocoa sector. We focus on deforestation with
smallholder cocoa farmers & many companies have been working with farmers on-
ground to strengthen sustainable land use in cocoa production. For cocoa, our approach
is to develop a concrete, time-bound, joint action plan in partnership with suppliers and
governments that spell out the critical actions and realistic timeframe to end
deforestation for a specific country and landscape. We are optimistic that multi-
stakeholder initiatives like CFI will improve transparency & traceability in the industry
and unlock opportunities to help address deforestation risks in cocoa.
Cost of response
18,000,000
Explanation of cost of response
This represents the cost of programs to ensure that we are buying sustainably certified
cocoa products. Additionally, we committed to further impact programs in 2020, such as
remediation programs, over the next 4 years.
F3.2
(F3.2) Have you identified any forests-related opportunities with the potential to have
a substantive financial or strategic impact on your business?
Have you identified opportunities?
Timber products
Yes
Palm oil
Yes
Soy
Yes
Other - Cocoa
Yes
F3.2a
(F3.2a) For your selected forest risk commodity(ies), provide details of the identified
opportunities with the potential to have a substantive financial or strategic impact on
your business.
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Forest risk commodity
Timber products
Type of opportunity
Markets
Where in your value chain does the opportunity occur?
Supply chain
Other parts of the value chain
Primary forests-related opportunity
Increased demand for certified materials
Company-specific description & strategy to realize opportunity
In 2021, Unilever achieved 96% of our directly purchased paper and board packaging
materials were made from recycled fibre or came from certified sustainably managed
forests. Continuing to drive third party certification of recycled materials is an
opportunity, because it supports a market for certified recycled materials, & equally
provides reassurance in terms of secure low-risk supply for our 400+ brands. By
progressively purchasing more certified, & full chain of custody materials, we're also
driving performance against our deforestation-free target. In 2021, we've been finding
ways to integrate sustainable Paper & Board volumes into more products such as
bringing out paper-based recyclable pouches for our Colman’s range in the UK. We’ve
also been working with Pulpex to create the first- ever paper-based laundry detergent
bottle, piloting this with OMO in Brazil. Demand for plastic-alternatives means
innovations P&B packaging is growing strongly. Following the introduction of our People
and Forests First strategy, we have shifted a significant amount of our sourcing to
places where the risk of deforestation is low. In the locations where deforestation risk
remains high, we complement our use of certification schemes with other forms of
supplier engagement, such as quarterly questionnaires on traceability and sustainability
status of the volumes sourced. We continue to look for ways to simplify data collection
processes to reduce the burden on suppliers and improve the accuracy of the
sustainability data received. We upgraded our GTS survey capability as an interim
solution to easily collect upstream supply chain data which helped us to disclose
Unilever Tier 1 suppliers, which we believe further builds consumer trust in our products
that use fibre-based packaging. Our Digital team also engaged with strategic technology
partners to develop longer term solutions that are directly integrated with core Unilever
ERP systems. We believe these actions will result in positive outcomes in terms of
consumer preference and brand equity in the timescale of current time to the
foreseeable future of a 5 year time horizon which we feel confident captures current
consumer and stakeholder attitudes on sustainable pulp and paper.
Estimated timeframe for realization
Current - up to 1 year
Magnitude of potential impact
Medium-low
Likelihood
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More likely than not
Are you able to provide a potential financial impact figure?
Yes, a single figure estimate
Potential financial impact figure (currency)
19,800,000
Potential financial impact figure - minimum (currency)
Potential financial impact figure - maximum (currency)
Explanation of financial impact figure
In developed markets, where product boycotts are more likely, all (99%) of our fibre-
based packaging is from sustainably managed forests or is certified recycled. There is
little additional value to brands in certifying the balance of uncertified recycled
packaging, which is concentrated in developing and emerging economies. The
opportunity described above enables the Unilever Group to make corporate
sustainability claims that may translate into buying preferences from sustainability
minded consumers. We assumed that 33% of consumers are buying products with
sustainability in mind, according to our consumer research. This helped us to estimate
that an additional €19.8M in value is generated by looking at group turnover of products
with prominent customer facing cartons, or other paper bearing packaging in developed
markets that are most likely to respond to such claims. To reach this €19.8mln, we used
Unilever financial data to estimate (A) 20 bln of turnover in “sustainability minded”
markets (e.g. North America, Europe and others), and assumed that (B) based on
prevalence of brand claims that 10% of stock keeping units across the markets have a
prominent carton related claim, we then apply (C) our conservative growth estimate of
3% and factor (D) of 33% of consumers who actually buy with sustainability in mind
which results in (E) a conservative estimate of a 1% increase in sales across consumer
segments. i.e. A*B*C*D = E (19.8mln)
Forest risk commodity
Palm oil
Type of opportunity
Efficiency
Where in your value chain does the opportunity occur?
Supply chain
Primary forests-related opportunity
Cost savings
Company-specific description & strategy to realize opportunity
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Unilever relies on palm oil as key ingredient in products manufactured by all Unilever
divisions. In 2021, market supply-demand mismatches and trade volatility were at such
extreme levels that there were market price increases of more than 100% for palm oil.
Our strategy is to build resilience through multiple routes: direct sourcing, smallholder
programs, certification, investing in technology for transparency and traceability.
For example: we engage with direct & indirect suppliers including independent
smallholders programs in main sourcing regions of Indonesia and Malaysia where
Unilever supports up to 15,000 independent smallholders. By supporting farmers with
training and land titling, smallholders can have secure title, improve farm profitability
which results in Unilever being able to secure volumes and lessen long term price
volatility.
Our resilient Procurement strategy provides Unilever with an opportunity to reduce or
avoid future volatility and market supply constraints. By setting up our procurement
teams to buy sustainable, deforestation free and traceable palm in the volumes we need
on a long term basis, we ready ourselves against uncertainty in market conditions.
Estimated timeframe for realization
4-6 years
Magnitude of potential impact
Medium
Likelihood
More likely than not
Are you able to provide a potential financial impact figure?
Yes, an estimated range
Potential financial impact figure (currency)
Potential financial impact figure - minimum (currency)
20,000,000
Potential financial impact figure - maximum (currency)
33,000,000
Explanation of financial impact figure
To calculate the financial impact figure, we assumed our annual cost of palm-based
derivatives at approximately €2 billion (A). We assume an increase of 10 - 30% of spend
based on modelling the underlying feedstock price volatility and the volatility of
premiums and costs of securing more sustainable, direct and traceable palm and palm
kernel oil (B). This impact could occur within a 3-5 year period (C). The cost of
investment in a resilient supply chain is estimated at €100 million annually (D). This
equates to a time averaged cost avoided of (A X B) - D / C of roughly €20- 33 million
per annum, rounded up to the nearest million.
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D: The cost of investment in a resilient supply chain is = (a)+(b)+(c)+(d)+(e) =
€100,000,000
(a) cost of purchasing RSPO physically certified materials via Mass Balance or SG
models; (b) Investment needed to shorten our supply chain to enable procurement more
directly in order to improve our traceability and resilience, (c) support for smallholders by
buying directly from independent mills and mid-sized operators in order to connect to
smallholders and invest in their empowerment through impact programs. (d)
investments in funds, eg &Green fund and larger landscape programs to drive no
deforestation & transformation in commodity supply chains beyond our own (e)
investments in monitoring & new technology partnerships with Google, Earthqualiser,
Descartes Labs, Orbital Insights to drive traceability & transparency in commodity
supply chains.
Forest risk commodity
Soy
Type of opportunity
Products & services
Where in your value chain does the opportunity occur?
Supply chain
Other parts of the value chain
Primary forests-related opportunity
Increased brand value
Company-specific description & strategy to realize opportunity
Soy is mainly used by Hellmann’s and other brands within our Food & Refreshments
(F&R) division. We see an opportunity for Hellmann’s to increase brand value by being
positively associated with our sustainable and deforestation-free soy programs. In 2020,
Unilever launched its Compass Strategy including: a deforestation-free supply chain by
2023; an evergreen sustainable sourcing goal; helping to protect and regenerate
1,5million hectares by 2030. These commitments drive business decisions on the
development of our programs which in turn can provide positive stories for brands &
consumers. The market opportunity is to leverage sustainably produced ingredients,
including soy, in dressings and other food products, to increase brand value.
Sustainable Sourcing is part of the Hellmann’s brand purpose and sourcing sustainable
and deforestation-free vegetable oils is at the core of the brand strategy. Consumer
studies were conducted to define how to best communicate our sustainability work to
consumers and the resulting brand claims roadmap will be implemented through 2025.
In line with the brand strategy, 100% of our soy was sustainably sourced via SAC
equivalent standards either as segregated, mass-balance or RTRS certificates in 2021.
We expect to source 100% deforestation-free soybean oil by 2023. Based on a supplier
traceability survey conducted with Proforest in 2021, around 90% of our soybean oil
originated in low risk of deforestation countries such as USA, Canada, China and
European soy producing countries or was certified segregated by recognized standards
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such as ProTerra. Our approach to sustainable soy also includes impact programs to
promote regenerative agriculture in the USA (our main sourcing region) and to facilitate
the expansion of verified deforestation-free soy in Cerrado via RTRS certification.
Hellman’s in North America has used the example of the sustainable and regenerative
agriculture programs run in our Soy US supply chain to drive digital stories and
communications bringing farmer stories to consumers. Hellman’s has also made claims
on pack on leading markets referring to sustainably sourced oils. Hellmann’s achieved
double-digit growth in 2021, is one of our +€1 B + turnover brands and remains the
number one mayonnaise brand in the world by sales.
Estimated timeframe for realization
1-3 years
Magnitude of potential impact
Medium-low
Likelihood
More likely than not
Are you able to provide a potential financial impact figure?
Yes, an estimated range
Potential financial impact figure (currency)
Potential financial impact figure - minimum (currency)
20,000,000
Potential financial impact figure - maximum (currency)
30,000,000
Explanation of financial impact figure
We calculated the financial opportunity to the business from the preference for products
using sustainably sourced soy using the following: 1) We assumed that 33% of
consumers are buying products with sustainability in mind, a statistic drawn from our
ground-breaking research which measured consumers’ actual buying behaviour rather
than simply their purchase intentions (A). We then used our multi-year underlying sales
growth estimate (of between 3-5%) to determine the impact of that 33% on growth
based on where consumer awareness is the highest (Europe and North America) (B). 2)
We then used turnover from our Dressings business (which is the biggest soy using
category) in those markets where consumer awareness of sustainability is the highest
(Europe and North America) (C).
Our lower range estimate is based on the impact on 3% of growth; the upper range on
the impact on 5% of growth. The increased brand value estimation (D) is a result of the
above (A)*(B)*(C).
Increased brand value via consumer preference for sustainably produced products is
already apparent and the opportunities are being realised. Our new Unilever Compass
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makes a strategic choice to 'Win with our brands as a force for good, powered by
purpose & innovation'. Unilever's purposeful brands are key to delivering our
sustainability ambitions & they are starting to cut through: consumers now see 60% of
our brands as more purposeful, taking meaningful, tangible action on issues they care
about.
Forest risk commodity
Other - Cocoa
Type of opportunity
Products & services
Where in your value chain does the opportunity occur?
Supply chain
Other parts of the value chain
Primary forests-related opportunity
Increased brand value
Company-specific description & strategy to realize opportunity
Situation: Increasing consumer awareness of sustainability issues and engaging
consumers in sustainable living via brands was a core part of the Unilever Sustainable
Living Plan 2010-2020) & remains central to the new Unilever Compass.
Task: The potential market opportunity is to leverage sustainably produced ingredients,
including cocoa, in ice cream and other food products, for product differentiation.
Action: In 2012, Magnum made a public commitment to source 100% of its cocoa beans
sustainably, through Rainforest Alliance.
Result: In 2021, Unilever sustainably sourced 99% of its cocoa as Rainforest Alliance
and (RA), and Fairtrade certified.
Estimated timeframe for realization
1-3 years
Magnitude of potential impact
Medium-low
Likelihood
More likely than not
Are you able to provide a potential financial impact figure?
Yes, an estimated range
Potential financial impact figure (currency)
Potential financial impact figure - minimum (currency)
42,000,000
Potential financial impact figure - maximum (currency)
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69,000,000
Explanation of financial impact figure
We calculated the financial opportunity to the business from the preference for products
using sustainably sourced cocoa using the following scenario:
1) We assumed that 33% of consumers are buying products with sustainability in mind,
a statistic drawn from our research which measured consumers’ actual buying
behaviour rather than simply their purchase intentions (A). We then used our multi-year
underlying sales growth estimate (of between 3-5%) to determine the impact of that 33%
on growth based on where consumer awareness is the highest (Europe & North
America) (B).
2) We then used turnover from our Ice Cream business (which is the biggest cocoa
using category) in those markets where consumer awareness of sustainability is the
highest (Europe and North America) (C).
Our lower range estimate is based on the impact on 3% of growth; the upper range on
the impact on 5% of growth. The increased brand value estimation (D) is a result of the
above (A)*(B)*(C).
Increased brand value via consumer preference for sustainably produced products is
already apparent and the opportunities are being realised. Our new Unilever Compass
makes a strategic choice to 'Win with our brands as a force for good, powered by
purpose & innovation'. Unilever's purposeful brands are key to delivering our
sustainability ambitions & they are starting to cut through: consumers now see 60% of
our brands as more purposeful, taking meaningful, tangible action on issues they care
about.
F4. Governance
F4.1
(F4.1) Is there board-level oversight of forests-related issues within your
organization?
Yes
F4.1a
(F4.1a) Identify the position(s) of the individual(s) (do not include any names) on the
board with responsibility for forests-related issues.
Position of
Please explain
individual
Chief
The Board delegates the running of Group to the CEO. Whilst the Board take
Executive
accountability, the CEO is responsible for the oversight of our climate & nature
Officer (CEO)
agenda, including commitments to 1) eliminate deforestation in our supply chain & 2)
to protect & regenerate nature.
Our CEO approved Unilever’s sustainability commitments under the Unilever
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Compass (both named above). He is an important driving force for the company &
was integral to the decision to take our Climate Transition Action Plan (CTAP) to a
shareholder vote in 2021. He also accepted the Terra Carta Seal award from HRH
The Prince of Wales for the alignment of our commitments with the Sustainable
Markets Initiative (SMI) roadmap.
These commitments are supported by the CEO’s approval of Unilever’s dedicated
€1bn Climate & Nature Fund, a commitment that will see our brands taking
meaningful action on projects including landscape restoration, reforestation, carbon
sequestration, wildlife protection & water preservation.
F4.1b
(F4.1b) Provide further details on the board’s oversight of forests-related issues.
Frequency that
Governance
Please explain
forests-related
mechanisms into
issues are a
which forests-
scheduled
related issues are
agenda item
integrated
Row
Scheduled -
Monitoring
Unilever’s Board has responsibility for reviewing &
1
some meetings
implementation and
guiding the strategy for the Group, as well as its
performance
conduct. The Board has accountability for the
Overseeing
management & guidance of risks & opportunities,
acquisitions and
including those associated with deforestation & the
divestiture
protection & regeneration of nature. In 2021, the
Board held 6 planned meetings & 3 ad-hoc
Overseeing major
meetings.
capital expenditures
Reviewing and
The Board’s delegated Corporate Responsibility
guiding business
Committee (CRC) tracks the progress & potential
plans
risks associated with the Compass (Unilever’s
Reviewing and
sustainability strategy). The CRC feeds into the
guiding corporate
Board for key decisions on major plans of action.
responsibility strategy
Within the Unilever Compass, there are forests-
Reviewing and
related targets including for sustainable sourcing, a
guiding major plans of
deforestation-free supply chain & helping to protect
action
and regenerate land, forests & oceans. The CRC
Reviewing and
report their findings to the Board regularly so that
guiding risk
they can fulfil their oversight responsibilities. The
management policies
CRC met four times in 2021 and were instrumental
Reviewing and
in agreeing which performance measures would be
guiding strategy
assessed for the Sustainability Performance Index
Reviewing innovation
(SPI) in 2022, one of which is % volume of palm oil,
/ R&D priorities
soy, paper and board, cocoa and tea purchased
and/or contracted from low-risk sources.
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The CRC’s responsibilities are complemented by
the Audit Committee, which reviews the assurance
of Compass targets & signs off our Annual Report &
Accounts (ARA). In 2021 the Audit Committee
oversaw the independent assurance performed on
non-financial performance measures, including
sustainable sourcing.
F4.1d
(F4.1d) Does your organization have at least one board member with competence on
forests-related issues?
Row 1
Board member(s) have competence on forests-related issues
Yes
Criteria used to assess competence on forests-related issues
Our Board-delegated Corporate Responsibility Committee meet every quarter to
oversee Unilever’s conduct as a responsible global business. Core to this remit is its
governance of progress on our protect and regenerate nature commitments which are a
key part of Unilever’s strategy, the Compass. It’s comprised of three non-executive
Board directors.
F4.2
(F4.2) Provide the highest management-level position(s) or committee(s) with
responsibility for forests-related issues (do not include the names of individuals).
Name of the
Responsibility
Frequency of
Please explain
position(s)
reporting to
and/or
the board on
committee(s)
forests-related
issues
Chief Executive
Both assessing and
Quarterly
Structure: Our CEO is one of two Executive
Officer (CEO)
managing forests-
Directors on our Board, and is a member of
related risks and
the Unilever Leadership Executive (ULE),
opportunities
our highest operational leadership group.
The Board delegate responsibility for the
day-to-day operational leadership of the
business including strategy, monitoring of
performance and policy, to the CEO.
Reporting to the Board on forest-related
topics: A key responsibility is assessing and
reporting progress on sustainability targets,
including deforestation and sustainable
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sourcing. This represents a significant step
towards integrating sustainable forestry
practices considerations into our core
business operations. The ULE meet
quarterly to discuss sustainability progress,
including risks and opportunities related to
forestry.
Key forest-related responsibilities: The CEO
is responsible for reporting back to the
Board. This can vary from verbal updates,
presentations, or written reports, with
feedback documented in Board minutes.
In 2021, our CEO was also involved in
canvassing the views of investors on our
Climate Transition Action Plan (CTAP)
which included our commitment on zero
deforestation. Investors supported the
publication of the CTAP, agreeing that it
represented a well-considered approach to
managing risk and opportunity.
Other C-Suite
Both assessing and
Quarterly
Structure: The Unilever Leadership
Officer, please
managing forests-
Executive (ULE) is Unilever’s highest
specify
related risks and
operational leadership group, comprised of
Chief Supply
opportunities
senior and C-Suite executives. This
Chain Officer
includes the Chief Supply Chain Officer
(CSCO)
(CSCO), reporting directly to the CEO. The
CSCO has operational responsibility for our
eliminating deforestation goal.
Reporting to the Board on forest-related
topics: Our CSCO chairs the Unilever
Sustainability Advisory Council, comprised
of seven external experts, that acts as a
sounding board for the Board on key
sustainability issues, including deforestation
and ecosystem protection.
Key forest-related responsibilities:
The CSCO’s responsibilities include feeding
into the CEO and Board on key sourcing
matters. This includes on our targets on
sustainable sourcing for palm, soy, paper
and board, tea and cocoa, and progress
against these targets.
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F4.3
(F4.3) Do you provide incentives to C-suite employees or board members for the
management of forests-related issues?
Provide incentives
Comment
for management of
forests-related
issues
Row
Yes
The CEO leads the Unilever Leadership Executive who all play a
1
significant role in driving progress towards our Compass targets,
including our climate & nature ambitions.
One element of our Remuneration Policy is the long-term Performance
Share Plan (PSP). The PSP is linked to financial and sustainability
performance, guided by our Sustainability Progress Index (SPI), which
accounts for 25% of the total PSP award for the CEO, other C-Suite
officers and senior executive leadership. The PSP replaced the
Management Co-Investment Plan (MCIP) in 2021.
Performance is determined through the SPI, a qualitative and
quantitative assessment made jointly by the Board-delegated
Corporate Responsibility and Compensation Committees. The
Committees determine a rating from 0% to 200% each year based on
7 key performance indicators (now 8 indicators in 2022).
SPI in 2021 was based on a selection of key performance indicators
(KPIs) from our Unilever Sustainable Living Plan (USLP) which ran
until 2020, reflected in the PSP up to and including the 2021 award.
This includes performance against our sustainable sourcing target to
purchase palm oil, soy and paper and board from low-risk sources. In
2021 Unilever achieved against this target, achieving 83% of contract
volume from low-risk sources.
Over 2018-2021 the average SPI outcome was 125%, contributing to
an MCIP outcome of 87% (which has now vested). In 2020, the annual
SPI outcome was 125%, of which a proportion was based on
Unilever’s performance on sustainable sourcing. Details of the MCIP
awards for our CEO & CFO are published on p 89 - 90 our Annual
Report 2021
In 2021, Unilever introduced the Compass, which includes a series of
sustainability commitments for the business, and as such, we have
updated the SPI incentive performance measure to reflect the
Compass from the 2022 PSP award onwards. From 2022, the SPI will
be linked to a new set of targets, including a protect and regenerate
nature target on low risk sourcing of palm oil, soy, paper and board,
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cacao, and team - a key part of our strategy to achieve a deforestation
free supply chain by 2023.
F4.3a
(F4.3a) What incentives are provided to C-Suite employees or board members for the
management of forests-related issues (do not include the names of individuals)?
Role(s) entitled
Performance
Please explain
to incentive?
indicator
Monetary
Corporate
Achievement of
Details on indicators chosen: One element of our
reward
executive team
commitments
Remuneration Policy is the long-term Performance
Chief Executive
and targets
Share Plan (PSP). The PSP is linked to financial &
Officer (CEO)
sustainability performance, guided by our
Sustainability Progress Index (SPI), which
Chief Financial
accounts for 25% of the total PSP award for the
Officer (CFO)
CEO, other C-Suite officers & senior exec
Chief Operating
leadership. The PSP replaced the Management
Officer (COO)
Co-Investment Plan (MCIP) in 2021.
Other C-suite
Officer
The method for measurement: Performance is
determined through the SPI, a qualitative &
quantitative assessment made jointly by the
Board’s Corporate Responsibility & Compensation
Committees, using a rating from 0% (min) to 200%
(max) each year based on 7 key performance
indicators. SPI in 2021 was based indicators from
our USLP which ran until 2020, reflected in the
PSP up to & including the 2021 award. This
includes % volume of supply of palm oil, soy, paper
& board, cocoa & tea from low-risk sources. In
2021 we achieved 83% of contract volume from
low-risk sources.
Threshold for success: MCIP performance is
assessed annually & tallied as an average index
for each 4-year MCIP period, enabling the
Compensation Committee to determine the level of
matched shares. The level of reward is dependent
on the average score (0-200%) over 4 years. Over
2018-2021, the average SPI outcome was 125%,
contributing to an MCIP outcome of 87% (now
vested). In 2020, the annual SPI outcome was
125%, of which a proportion was based on
Unilever’s performance on sustainable sourcing.
Details of the MCIP awards for our CEO & CFO
are published in our Annual Report.
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In 2020, we introduced the Compass, which
includes sustainability commitments, & we have
updated the SPI incentive performance measure to
reflect this from 2022 onwards. From 2022, the SPI
will be linked to new targets, including a protect &
regenerate nature & low risk sourcing of palm oil,
soy, paper & board, cocoa - key parts of our
strategy to achieve a deforestation free supply
chain by 2023.
The CEO leads the Unilever Leadership Executive
(ULE) who help drive progress towards our
Compass targets, including our climate ambitions.
Exec remuneration for management employees -
up to & including the ULE - continues to be linked
to performance against climate change goals.
Their reward packages include fixed pay, a bonus
as a % of fixed pay & eligibility to participate in the
long-term PSP.
Non-
Board/Executive
Other, please
Whilst performance in key sustainability ratings
monetary
board
specify
and rankings such as CDP and DJSI fell into the
reward
Corporate
Reputation
SPI 2021 (as above), there are also huge
executive team
reputational benefits to Unilever for performing
well. Often, we are selected to participate in pilot
Chief Executive
rankings (such as S&P's ESG ratings, which we
Officer (CEO)
updated in 2021) and knowledge sharing/working
Chief Financial
groups where we can really drive change within
Officer (CFO)
our industry and outside it.
Chief Operating
Officer (COO)
Being able to use third parties to judge whether we
Chief
are a leader in sustainable business (our Vision)
Procurement
helps cement our Vision. Unilever was ranked
Officer (CPO)
number 1 in the 2021 Globescan Sustainable
Chief Risk Officer
Leaders Report for the eleventh year running - as
(CRO)
mentioned by 700 experts representing business,
Chief
government, NGOs and academia across 71
Sustainability
countries.
Officer (CSO)
Other C-suite
Officer
Other, please
specify
All employees
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F4.4
(F4.4) Did your organization include information about its response to forests-related
risks in its most recent mainstream financial report?
Yes (you may attach the report - this is optional)
dc6d3.pdf
F4.5
(F4.5) Does your organization have a policy that includes forests-related issues?
Yes, we have a documented forests policy that is publicly available
F4.5a
(F4.5a) Select the options to describe the scope and content of your policy.
Scope
Content
Please explain
Row
Company-
Commitment to eliminate
Unilever relies on forested landscapes for ecosystem
1
wide
conversion of natural
services and for raw materials: Sunlight brand needs
ecosystems
palm oil to make it foam; all products are moved in
Commitment to no land
Paper and Board boxes. Our People & Nature (P&N)
clearance by burning or
Policy (2020), covers all forest risk commodities, and
clearcutting
the standards and commitments were selected as they
support our Unilever strategy and our 2023
Commitment to eliminate
deforestation-free target. Our Responsible Sourcing
deforestation
Policy (RSP) applies to all Suppliers. Both go beyond
Commitment to no
regulatory compliance, are Accountability Framework-
deforestation, to no
aligned and best-practice. Our Policies are embedded
planting on peatlands
in supplier contracts, operationalising policy principles
and to no exploitation
within commercial terms & link a policy breach to a
(NDPE)
contractual breach. In 2020 and 2021, our P&N Policy
Commitment to
has driven an appraisal and re-focusing of our supply
remediation, restoration
chain in forest-risk commodities to areas of lower
and/or compensation of
deforestation & conversion risk, eg 93% of our soy was
past harms
originated from lower risk origins in 2021 up from 90%
Commitment to protect
in 2020 and 69% in 2019. Because we source globally,
rights and livelihoods of
across many ecoregions, our Policy covers all relevant
local communities
biomes & natural ecosystem that may be at risk from
Commitments beyond
deforestation & conversion. Our Policy requires
regulatory compliance
transparency and traceability of all sourcing origins &
Commitment to
we use geospatial technology to monitor for natural
transparency
ecosystem change: if loss is detected, we require
Commitment to
verification and remediation. This informs business and
stakeholder awareness
procurement decision making. In 2021 Unilever
and engagement
suspended sourcing from 118 suppliers in our supply
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Commitment to align
chain due to the Policy. The P&N Policy supports
with the SDGs
Unilever’s ambition to drive sectoral change & reduce
Recognition of the
leakage by requiring suppliers, supplier groups & their
overall importance of
third-party supply chains to comply to high standards.
forests and other natural
Our commitment to transparency has led to a public
ecosystems
grievance procedure for palm oil which allows anyone
to raise grievances which we verify & remediate. Our
Description of business
Policies, Sustainable Agriculture Code (SAC) &
dependency on forests
Regenerative Agriculture Principles (RAP) set
Recognition of potential
benchmarks & guide our procurement for forest
business impact on
commodities and led to 79% being sustainably sourced
forests and other natural
via RSPO, RA, RTRS, FSC, PEFC & SAC in 2020. Our
ecosystems
commitment to 100% sustainable sourcing is a target in
Description of forest risk
the new Compass, influencing the suppliers we select.
commodities, parts of
Collectively, our Policies align with SDGs 6, 13, 14 &15.
the business, and stages
We review our Policies quarterly to ensure continued
of value-chain covered
relevance. Large-scale revisions occur on a 4 year
by the policy
cycle.
List of timebound
milestones and targets
Description of forests-
related performance
standards for direct
operations
Description of forests-
related standards for
procurement
F4.5b
(F4.5b) Do you have commodity specific sustainability policy(ies)? If yes, select the
options that best describe their scope and content.
Do you have a
Scope
Content
Please explain
commodity
specific
sustainability
policy?
Timber
Yes
Company-
Commitment to
Paper and Board (P&B) is a priority raw
products
wide
eliminate
material as we use it across all
conversion of
categories. Our People & Nature (P&N)
natural ecosystems
Policy (2020), covers all purchased
Commitment to no
volumes of P&B. Unilever selected the
land clearance by
standards and commitments here as
burning or
they support our Unilever specific
clearcutting
strategy called the Compass and our
2023 deforestation-free target., Our
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Commitment to
Responsible Sourcing Policy (RSP)
eliminate
applies to all Suppliers. These policies
deforestation
apply to all P&B materials we buy
Commitment to no
across all operations, including folding
deforestation, to no
cartons, product packaging & aseptics.
planting on
Because we source P&B from many
peatlands and to
diverse ecoregions globally, the Policy
no exploitation
emphasises the protection of all natural
(NDPE)
ecosystems, ensuring comprehensive
coverage. We require that suppliers
Commitment to
meet strong standards and therefore
remediation,
require that materials are certified via
restoration and/or
FSC & PEFC standards which in turn
compensation of
sets a requirement for selecting
past harms
suppliers. We further require all
Commitment to
recycled products are fully chain of
protect rights and
custody certified. The Policy has
livelihoods of local
resulted in the reduction in sourcing of
communities
certain materials from certain suppliers
Commitments
& supply chains, e.g. virgin fibre,
beyond regulatory
certified or otherwise, in jurisdictions
compliance
with high risk of conversion in the
Commitment to
controlled wood supply chain. Our
transparency
policy drives Unilever to conduct
Commitment to
specific and regular risk assessments
stakeholder
using questionnaires, managed by our
awareness and
partner GTS, to determine wood fibre
engagement
sourcing & sustainability status. This
Recognition of the
quarterly questionnaire covers chain of
overall importance
custody of fibre to country, FSC/PEFC
of forests and other
certified or recycled declaration &
natural ecosystems
includes verification by suppliers on
Description of
sustainability. This has led in 2021 to
business
Unilever achieving 96% sustainable
dependency on
sourced fibre, including 92.9% third
forests
party certified with full chain of custody
and in developed markets 99% of our
Recognition of
fibre-based packaging is from
potential business
sustainably managed forests or is
impact on forests
certified recycled. In 2021, non-
and other natural
compliance with our Policy & failure to
ecosystems
remediate has resulted in the removal
Description of
of two P&B suppliers. As a result of the
forest risk
new Policy, we engage with 100% of
commodities, parts
our suppliers to educate on policy
of the business,
compliance, to inform both internal
and stages of
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value-chain
decision making & supplier sourcing.
covered by the
We review our Policies on a quarterly
policy
basis to ensure continued relevance to
List of timebound
the issues in commodity sourcing.
commitments and
Large-scale revisions occur on a 4 year
targets
cycle.
Description of
forests-related
performance
standards for direct
operations
Description of
forests-related
standards for
procurement
Other, please
specify
Commitment on
transparency
through
measurement
and reporting
Palm oil
Yes
Company-
Commitment to
Palm oil and derivatives are crucial
wide
eliminate
ingredients in our brands, particularly in
conversion of
Home Care & Beauty & Personal Care
natural ecosystems
e.g. Dove, one of our €1 billion+
Commitment to no
turnover brands uses palm oil in many
land clearance by
products. Our People & Nature (P&N)
burning or
Policy (2020), covers purchased
clearcutting
volumes of palm with a 100% by 2023
deforestation-free target, and our
Commitment to
Responsible Sourcing Policy (RSP)
eliminate
applies to all Suppliers. For Palm, the
deforestation
P&N Policy is aligned with
Commitment to no
Accountability Framework Guidance &
deforestation, to no
goes well beyond palm industry-
planting on
standard NDPE Policies and regulatory
peatlands and to
requirements. Unilever selected the
no exploitation
standards and commitments here as
(NDPE)
they support our Unilever Compass
Commitment to
Strategy & our 2023 deforestation-free
remediation,
target. As a result of the
restoration and/or
traceability/transparency and natural
compensation of
ecosystem protection principles
past harms
inscribed in the Policy we have
Commitment to
implemented a strategy through 2020
protect rights and
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livelihoods of local
that relies on traceability & assessment
communities
of the risk-of-deforestation at sourcing
Commitments
origin, leading to the selection and
beyond regulatory
consolidation of the number of palm
compliance
mills from 1600 globally to 500, mainly
in Indonesia and Malaysia. We embed
Commitment to
our Policy requirements in supplier
transparency
contracts, resulting in approx 80% of
Commitment to
our core palm oil sourced with
stakeholder
additional contractual controls on
awareness and
deforestation and conversion by Q4
engagement
2021. In line with public Sustainable
Commitment to
sourcing commitments, in 2021, we
align with the SDGs
sourced 90% RSPO-certified palm
Recognition of the
materials which indicates that we
overall importance
restrict sourcing of palm to credible
of forests and other
certified sources and to suppliers who
natural ecosystems
maintain compliance with the RSPO
Recognition of
standard. In line with Policy principles
potential business
on transparency, we have a public
impact on forests
grievance process & Grievance
and other natural
Tracker. Because of enhanced
ecosystems
monitoring capability, in 2021 we
Description of
suspended 118 palm oil suppliers in
forest risk
our supply chain due to non-compliance
commodities, parts
with our Policy. P&N Principle 4 guides
of the business,
internal decisions & investment in
and stages of
impact programs: in the palm sector we
value-chain
invest in 4 jurisdictional projects in
covered by the
Indonesia and 1 in Sabah, Malaysia to
policy
protect & restore forests & improve
List of timebound
smallholder livelihoods. Via our Central
commitments and
Kalimantan-Inobu project, in 2021, we
targets
were restoring 100 hectares of forests
around Tanjung Puting National Park
Description of
and over 300 hectares in palm
forests-related
landscapes. We review our Policies on
performance
a quarterly basis to ensure continued
standards for direct
relevance to the issues in commodity
operations
sourcing. Large-scale revisions occur
Description of
on a 4 year cycle.
forests-related
standards for
procurement
Soy
Yes
Company-
Commitment to
Soy Oil is a crucial ingredient in our
wide
eliminate
brands, e.g. Hellmann’s mayonnaise.
Our public commitments to the listed
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conversion of
criteria are captured in our People &
natural ecosystems
Nature Policy (2020), which covers all
Commitment to no
purchased volumes of soy & through
land clearance by
our Responsible Sourcing Policy (RSP)
burning or
which applies to all Suppliers. Unilever
clearcutting
selected the standards and
commitments here as they support our
Commitment to
Unilever Compass Strategy & our 2023
eliminate
deforestation-free target. Since we do
deforestation
not purchase soy directly from farmers,
Commitment to no
having traceability to the soy origins is
deforestation, to no
essential for us to tackle the
planting on
deforestation risk in our soybean oil
peatlands and to
supply chain.
no exploitation
(NDPE)
Our People & Nature Policy requires
Commitment to
transparency and traceability of all soy
remediation,
direct suppliers, groups & their third-
restoration and/or
parties (principle 3) and to protect
compensation of
natural ecosystems from deforestation
past harms
and conversion (principle 1) covering all
Commitment to
biomes & ecoregions associated with
protect rights and
soy driven conversion. Our public
livelihoods of local
commitment to 100% sustainable
communities
sourcing was a Unilever Sustainable
Commitments
Living Plan target (2010-2020) remains
beyond regulatory
an important target in the new Unilever
compliance
Compass strategy. Compliance with our
Commitment to
policies is a requirement in our supplier
transparency
selection & management process. We
Commitment to
require all suppliers to agree to comply
stakeholder
with our policy via a contractual
awareness and
agreement. If a supplier is not able or
engagement
refuses to comply, we explore
alternative supply options. Our policy
Commitment to
informs internal decision making: in
align with the SDGs
2021, we conducted a full review and
Recognition of the
transformation of our soybean oil
overall importance
sourcing strategy to mitigate
of forests and other
deforestation risk in our supply chain,
natural ecosystems
resulting in over 93% of our soy
Description of
originating in low-risk countries or being
business
certified segregated by Q4 2021.
dependency on
Guided by our Policy, Unilever also
forests
invests in our key soy sourcing regions
Recognition of
to protect & restore natural ecosystems,
potential business
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Unilever plc CDP Forests Questionnaire 2022 01 August 2022
impact on forests
to encourage the uptake of
and other natural
regenerative agricultural land-use
ecosystems
practices, & to contribute to the
Description of
restoration of damaged landscapes.
forest risk
commodities, parts
of the business,
Examples of our policy
and stages of
implementation/application on the
value-chain
ground are: Unilever’s regenerative
covered by the
agriculture project in the US Mid-West
policy
(focused on improving soil health and
water quality via cover crop adoption)
List of timebound
and our project focused on protecting
commitments and
and restoring land via RTRS
targets
certification of farmers in the Southern
Description of
Cerrado biome in Brazil. We review our
forests-related
Policies on a quarterly basis to ensure
performance
continued relevance to the issues in
standards for direct
commodity sourcing. Large-scale
operations
revisions occur on a 4-year cycle.
Other, please
specify
Commitment to
Good Agricultural
Practices
Other -
Yes
Company-
Commitment to
Cocoa is a vital ingredient in our ice
Cocoa
wide
eliminate
cream brands e.g. Magnum & Ben &
conversion of
Jerry’s. Our public commitments to the
natural ecosystems
listed criteria are captured in our People
Commitment to
& Nature Policy (2020), which covers all
eliminate
purchased volumes of soy & through
deforestation
our Responsible Sourcing Policy (RSP)
which applies to all Suppliers. Unilever
Commitment to no
selected the standards and
deforestation, to no
commitments here as they support our
planting on
Unilever Compass Strategy & our 2023
peatlands and to
deforestation-free target. Our public
no exploitation
commitment to 100% sustainable
(NDPE)
sourcing was a Unilever Sustainable
Commitment to
Living Plan target (2010-2020) remains
remediation,
an important target in the new Unilever
restoration and/or
Compass strategy. Compliance with our
compensation of
policies is a requirement in our supplier
past harms
selection & management process.
Commitment to
Collectively, our Policies align with
protect rights and
SDGs 6, 13, 14 &15. These policies
apply to all cocoa we buy across all our
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livelihoods of local
operations & commits us to public
communities
annual reporting on timebound targets.
Commitments
These policies guide our procurement
beyond regulatory
strategies and impact programmes. In
compliance
Côte d’Ivoire we work with farmers,
NGOs, suppliers, & other agri-
Commitment to
businesses to support deforestation-
transparency
free cocoa via certification (Rainforest
Commitment to
Alliance & Fairtrade). We are a
stakeholder
signatory of the Cocoa & Forests
awareness and
Initiative (CFI), convened by the World
engagement
Cocoa Foundation, IDH & The Prince of
Commitment to
Wales’s International Sustainability
align with the SDGs
Unit. The priorities under the
Recognition of the
Framework of Action form the basis of
overall importance
our CFI action plan & include protection
of forests and other
& restoration of degraded forests,
natural ecosystems
sustainable agricultural production &
Description of
increased farmer incomes & strong
forest risk
community engagement & social
commodities, parts
inclusion. We review our Policies on a
of the business,
quarterly basis to ensure continued
and stages of
relevance to the issues in commodity
value-chain
sourcing. Large-scale revisions occur
covered by the
on a 4 year cycle.
policy
List of timebound
commitments and
targets
Description of
forests-related
performance
standards for direct
operations
Description of
forests-related
standards for
procurement
F4.6
(F4.6) Has your organization made a public commitment to reduce or remove
deforestation and/or forest degradation from its direct operations and/or supply
chain?
Yes
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F4.6a
(F4.6a) Has your organization endorsed any of the following initiatives as part of its
public commitment to reduce or remove deforestation and/or forest degradation?
New York Declaration on Forests
Tropical Forest Alliance
Cerrado Manifesto
Other, please specify
We Mean Business
F4.6b
(F4.6b) Provide details on your public commitment(s), including the description of
specific criteria, coverage, and actions.
Forest risk commodity
Timber products
Criteria
No conversion of natural ecosystems
Zero gross deforestation/ no deforestation
Zero net deforestation
No new development on peat regardless of depth
Restoration and compensation to address past deforestation and conversion
Avoidance of negative impacts on threatened and protected species and habitats
No land clearance by burning or clearcutting
No conversion of High Conservation Value areas
No conversion of High Carbon Stock forests
Secure Free, Prior and Informed Consent (FPIC) of indigenous people and local
communities
Promotion of gender equality and women’s empowerment
Remediate any adverse impacts on indigenous people and local communities
Adoption of the UN International Labour Organization principles
Resolution of complaints and conflicts through an open, transparent and consultative
process
Facilitate the inclusion of smallholders into the supply chain
No sourcing of illegally produced and/or traded forest risk commodities
No sourcing of forest risk commodities from unknown/controversial sources
Restricting the sourcing and/or trade of forest risk commodities to credible certified
sources
Recognition of legal and customary land tenure rights
Operational coverage
Direct operations and supply chain
% of total production/ consumption covered by commitment
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Unilever plc CDP Forests Questionnaire 2022 01 August 2022
100%
Cutoff date
1993-1997
Commitment target date
2021-25
Please explain
Our public commitments to the above criteria are captured in our 2020 People & Nature
(P&N) Policy which covers all purchased volumes of cocoa, palm, paper & board (P&B),
soy, tea & through the Responsible Sourcing Policy (RSP) applied to all Suppliers.
Compliance with these Policies - & independent verification thereof - is included in
contractual agreements with suppliers, to establish commercial obligation to comply with
policy requirements.
The P&N Policy requires suppliers, supplier groups & their 3rd party supply chains to
commit to (1) Protect natural ecosystems from deforestation & conversion (2) Respect &
promote human rights, including FPIC, remediation (3) Transparency & traceability,
including resolution of complaints (4) Being a force for good for nature and people. Our
target for sourcing all volumes deforestation & conversion-free for cocoa, palm, P&B,
soy, tea is 2023. Our public commitment to 100% sustainable sourcing was a USLP
target (2010-2020) & remains a target in the Unilever Compass.
No Deforestation & No conversion of natural ecosystems: To manage our deforestation
& conversion risk in P&B, we sourced 92.9% of P&B volumes as certified under FSC &
PEFC standards which restricts sourcing of pulp & paper to credible certified sources.
FSC & PEFC include verification & auditing by a 3rd-party certification body & full chain
of custody to demonstrate it came from sustainably managed forests or recycled
material. The remaining 7.1% of our P&B volume was broken into 3.1% recycled
material, 0.9% virgin material (which was comprised of 81/19% recycled/virgin fibre in
aggregate) & 3.1% of materials that were not assessed due to supplier non-participation
in our quarterly data collection. In 2021 we focused procurement efforts & resources to
close gaps in 3rd party certification & chain of custody in India & West Africa eg Kenya
& Ivory Coast, including actions to support suppliers in completing audits & other
requirements for gaining 3rd party certification. FSC Chain of Custody and Controlled
Wood certifications are used to show compliance with EU Timber Regulation,
demonstrating legality of harvest & due consideration to key social & environmental
issues.
Secure FPIC: All suppliers must commit to our RSP, which is anchored in standards like
International Bill of Human Rights & ILO Declaration on Fundamental Principles &
Rights at Work; & includes our commitment to respect & promote land rights of
communities & indigenous people, through the application of the FPIC participatory
process & a zero-tolerance stance on land grabbing. FSC’s Principles 9, 3 and 4
address High Conservation Value areas, appropriate consultation of Indigenous people
and adoption of FPIC, respectively.
Restoration & compensation: Our de facto conversion cut-off date is 1994, per FSC
Principles & Criteria for Forest Stewardship Principle 6. Principle 6 further requires
certified entities to maintain, conserve and/or restore ecosystem services &
environmental values, & to avoid, repair or mitigate negative environmental impacts -
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Unilever plc CDP Forests Questionnaire 2022 01 August 2022
this includes preventing biodiversity losses, no conversion of natural ecosystems &
landscape management to maintain and/or regenerate forest cycles. Case Study: We
have engaged with FSC to ensure that certificate holders in Ukraine & Indonesia are
indeed meeting the certification standard requirements. Following allegations of
conversion and human rights violations committed by Korindo Group in Papua, despite
not being a Unilever supplier, we vigorously engaged with FSC & other stakeholders to
ensure that appropriate investigations were conducted to ensure remediation.
Beyond certification, compliance with our policies is part of our supplier selection &
management process, to support our deforestation-free commitment. For transparency,
our P&B supplier list is published on our website annually, to build consumer confidence
that our packaging comes from sustainable sources.
Forest risk commodity
Palm oil
Criteria
No conversion of natural ecosystems
Zero gross deforestation/ no deforestation
Zero net deforestation
No new development on peat regardless of depth
Best management practices for existing cultivation on peat
Restoration and compensation to address past deforestation and conversion
Avoidance of negative impacts on threatened and protected species and habitats
No land clearance by burning or clearcutting
No conversion of High Conservation Value areas
No conversion of High Carbon Stock forests
Secure Free, Prior and Informed Consent (FPIC) of indigenous people and local
communities
Promotion of gender equality and women’s empowerment
Remediate any adverse impacts on indigenous people and local communities
Adoption of the UN International Labour Organization principles
Resolution of complaints and conflicts through an open, transparent and consultative
process
Facilitate the inclusion of smallholders into the supply chain
No sourcing of illegally produced and/or traded forest risk commodities
No sourcing of forest risk commodities from unknown/controversial sources
Restricting the sourcing and/or trade of forest risk commodities to credible certified
sources
Recognition of legal and customary land tenure rights
Operational coverage
Direct operations and supply chain
% of total production/ consumption covered by commitment
100%
Cutoff date
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2005
Commitment target date
2021-25
Please explain
Our public commitments to the above-listed criteria are captured in our People & Nature
(P&N) Policy (2020), which covers all purchased volumes of cocoa, palm, P&B, soy, tea
with a 100% by 2023 target and through the Responsible Sourcing Policy (RSP) which
applies to all Suppliers. Compliance with these Policies - & independent verification
thereof - is included in contractual agreements with Suppliers, to establish commercial
obligation to comply with policy requirements. The P&N Policy requires suppliers,
supplier groups & their third-party supply chains to commit to (1) Protect natural
ecosystems from deforestation & conversion (2) Respect & promote human rights,
including FPIC, remediation (3) Transparency and traceability, including transparent
resolution of complaints (4) Being a force for good for nature and people. Our
commitment to 100% sustainable sourcing was a USLP target (2010-2020) & remains a
target in the Unilever Compass.
Zero gross/no Deforestation: To ensure no deforestation in our palm supply chain, we
are shifting our sourcing from 1,600 palm mills globally, to 500 mills located largely in
Indonesia & Malaysia. We started in 2020 & will complete by 2023. In 2021, we sourced
90% RSPO-certified palm materials which indicates strict sourcing of palm via credible
certified sources. -No conversion of natural ecosystems: in 2021, we continued to build
capability to monitor palm-linked peat conversion, an at-risk natural ecosystem in
Indonesian & Malaysian palm landscapes which is covered by our Policy. Descartes
Labs built geospatial data layers & an alerting system, NASA FIRMS & MODIS to
provide real-time fire alerts & our consultant NGIS, helped pair alerts, fire data with peat
maps. Alerts detect & quantify conversion & we then provide this to suppliers, who are
required to verify, manage & remediate non-compliance. In 2021, with Google & NGIS,
we built our NDPE Dashboard, a platform for monitoring.
Restoration & compensation: We address & restore past deforestation &/or conversion
through investment in 5 jurisdictional projects across Indonesia & Malaysia, in
collaboration with governments, NGOs, industry actors on forest protection &/or
restoration work. In 2021, we restored 66 ha of forest around Tanjung Puting National
Park, part of our Central Kalimantan-Inobu project.
Secure FPIC: All suppliers must commit to our RSP, with standards like International Bill
of Human Rights & ILO Declaration on Fundamental Principles & Rights at Work; &
includes our commitment to respect & promote land rights of communities & indigenous
people, through the application of the FPIC participatory process & a zero-tolerance
stance on land grabbing. In 2020, we engaged The Forest Institute (TFI) to conduct a
qualitative analysis of social & land conflicts relating to the palm oil industry in Indonesia
to develop recommendations on strategic interventions from us & other private sector
entities to help reduce or resolve land conflicts. In 2021 we presented findings to the
CGF Forest Positive Coalition social working group & will be embedding the theory of
change to help the industry manage this issue.
Transparent resolution of complaints/conflicts: On an ongoing basis, we manage
complaints, conflicts & grievances via Unilever’s public grievance process, which is
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open both to employees & third parties & sets out our procedures for addressing
allegations of non-compliance with our policies. We record, address, report these via our
public Grievance Tracker, so that others can see & act on these insights. We suspended
118 palm oil suppliers in our supply chain in 2021 due to policy non-compliance.
Forest risk commodity
Soy
Criteria
No conversion of natural ecosystems
Zero gross deforestation/ no deforestation
Zero net deforestation
No new development on peat regardless of depth
Restoration and compensation to address past deforestation and conversion
Avoidance of negative impacts on threatened and protected species and habitats
No trade of CITES listed species
No land clearance by burning or clearcutting
No conversion of High Conservation Value areas
No conversion of High Carbon Stock forests
Secure Free, Prior and Informed Consent (FPIC) of indigenous people and local
communities
Operations are in accordance with the UN Declaration on the Rights of Indigenous
Peoples
Remediate any adverse impacts on indigenous people and local communities
Adoption of the UN International Labour Organization principles
Resolution of complaints and conflicts through an open, transparent and consultative
process
Facilitate the inclusion of smallholders into the supply chain
No sourcing of illegally produced and/or traded forest risk commodities
No sourcing of forest risk commodities from unknown/controversial sources
Restricting the sourcing and/or trade of forest risk commodities to credible certified
sources
Recognition of legal and customary land tenure rights
Operational coverage
Direct operations and supply chain
% of total production/ consumption covered by commitment
100%
Cutoff date
2015
Commitment target date
2021-25
Please explain
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Our public commitments to the above-listed criteria are captured in our People & Nature
(P&N) Policy (2020), and the Responsible Sourcing Policy (RSP) which applies to all
Suppliers. Compliance with these Policies - and the independent verification thereof - is
included in contractual agreements with Suppliers, to establish commercial obligation to
comply with policy requirements.
The P&N Policy requires suppliers, supplier groups & their third-party supply chains to
commit to (1) Protect natural ecosystems from deforestation and conversion (2) Respect
& promote human rights, including FPIC, remediation (3) Transparency and traceability,
including transparent resolution and remediation of non-compliance (4) Being a force for
good for nature and people. Our target for sourcing all volumes deforestation &
conversion-free for soy is 2023.
Our public commitment to 100% sustainable sourcing was a Unilever Sustainable Living
Plan target (2010-2020) & remains an important target in the Unilever Compass.
No Deforestation & No conversion of natural ecosystems and Zero Gross deforestation,
Restoration and Compensation: Our RTRS program in Southern Cerrado helps us
deliver our commitments to no conversion of natural ecosystems, zero gross
deforestation and restoration and compensation of land by supporting farmers in Minas
Gerais and Goais States to certify against the RTRS standard. By providing technical
assistance and guidance to soy producers, they achieved RTRS certification, producing
more than 1.4M tons of deforestation free soybeans, protecting 16K hectares of native
vegetation and restoring degraded land to comply with RTRS requirements over the
past 5 years. To achieve zero deforestation and conversion, we started to transform our
soy supply chain to low-risk origins or certified segregated soy and intend to complete
this shift by 2023. Over 93% of our global soybean oil consumption originated from low-
risk origins or is verified deforestation free via a recognized market certification in 2021.
For the remaining gap, we are working with our key supplier in Brazil to develop a
bespoke verified deforestation-free solution.
Secure FPIC: All suppliers must commit to our RSP, which is anchored in standards like
International Bill of Human Rights & ILO Declaration on Fundamental Principles &
Rights at Work; and includes our commitment to respect & promote land rights of
communities & indigenous people, through the application of the FPIC participatory
process & a zero-tolerance stance on land grabbing. In 2021, we worked on FPIC via
our RTRS program in Southern Cerrado, which requires farmers to undergo an
independent verification of compliance against RTRS standard, including requirements
of FPIC under RTRS principle 3.
Transparent resolution of complaints and conflicts: Any non-compliance/breach to our
Policy's principles within suppliers’ corporate group operations and third-party supply
chains must be remediated. Where a direct supplier refuses to engage or take steps to
remediate or mitigate a breach of this policy, we will take appropriate steps to address
this in a manner consistent with our policy. Unilever’s grievance process, which is open
both to our own employees and to third parties, sets out our procedures for addressing
allegations of non-compliance. We will record, address, & report these via our public
Grievance Tracker, so that others can see and act on these insights. To date we have
not had cases of non-compliance in our soy supply chain, but if a farmer participating in
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our RTRS program were found in non-compliance, an action plan would be put in place
to address the issues identified as per RTRS requirements.
In 2021, we achieved 100% sustainably sourced soy via the most demanding soy-
related certifications Proterra (cut-off date 2004), ISCC (2008) & RTRS (2009), and our
own regenerative agriculture program in the US Mid-West, all in line with Unilever Policy
cut-off date of end 2015.
Forest risk commodity
Other - Cocoa
Criteria
No conversion of natural ecosystems
Zero gross deforestation/ no deforestation
Zero net deforestation
No new development on peat regardless of depth
Restoration and compensation to address past deforestation and conversion
Avoidance of negative impacts on threatened and protected species and habitats
No conversion of High Conservation Value areas
No conversion of High Carbon Stock forests
Secure Free, Prior and Informed Consent (FPIC) of indigenous people and local
communities
Operations are in accordance with the UN Declaration on the Rights of Indigenous
Peoples
Promotion of gender equality and women’s empowerment
Remediate any adverse impacts on indigenous people and local communities
Adoption of the UN International Labour Organization principles
Resolution of complaints and conflicts through an open, transparent and consultative
process
Facilitate the inclusion of smallholders into the supply chain
No sourcing of illegally produced and/or traded forest risk commodities
Restricting the sourcing and/or trade of forest risk commodities to credible certified
sources
Recognition of legal and customary land tenure rights
Operational coverage
Direct operations and supply chain
% of total production/ consumption covered by commitment
100%
Cutoff date
2014
Commitment target date
2021-25
Please explain
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Our public commitments to the above-listed criteria are captured in our People & Nature
Policy (2020), which covers all purchased volumes of cocoa, palm, P&B, soy, tea and
through the Responsible Sourcing Policy (RSP) which applies to all Suppliers.
Compliance with these Policies - and the independent verification thereof - is included in
contractual agreements with Suppliers, to establish commercial obligation to comply
with policy requirements.
The People & Nature Policy requires suppliers, supplier groups & their third-party supply
chains to commit to (1) Protect natural ecosystems from deforestation and conversion
(2) Respect & promote human rights, including FPIC, remediation (3) Transparency and
traceability, including transparent resolution of complaints (4) Being a force for good for
nature and people. Our target for sourcing all volumes deforestation & conversion-free
for cocoa, palm, P&B soy, tea is 2023. Our public commitment to 100% sustainable
sourcing was a Unilever Sustainable Living Plan target (2010-2020) & remains an
important target in the new Unilever Compass.
All suppliers must commit to our RSP, which is anchored in standards like International
Bill of Human Rights & ILO Declaration on Fundamental Principles & Rights at Work;
and includes our commitment to respect & promote land rights of communities &
indigenous people, through the application of the FPIC participatory process & a zero-
tolerance stance on land grabbing.
In 2018, Unilever became a signatory of the Cocoa & Forests Initiative (CFI), defining
our core commitments and action plan for a deforestation-free supply chain. Within our
RSP, we include guidelines on how to implement our mandatory requirements such as
training on FPIC. Our RSP was updated in 2017 to reinforce our commitment of working
together with our suppliers towards a long-term, sustainable and successful future. The
Unilever Sustainable Agriculture Code (SAC) includes criteria for the protection of
forests. Requirement F56 states ideally, no land shall be converted from forest to
agriculture. As part of this, biodiversity and natural habitats are to be conserved and
progress is measured against the ‘Protect and improve habitats for biodiversity’ metric. If
forest has been destroyed i.e. for road building, the loss shall be compensated for. In
2017, we updated our SAC to raise standards further by emphasizing 5 key areas: no
deforestation, human rights (including FPIC), legal compliance, migrant labor and
grievance processes for workers. The revision to include these new areas responds to
the issues underlying unsustainable farming and reflects commitments made by
Unilever over the past years. We're also moving the program from self-assessment to
3rd-party certification, to provide greater robustness and more accurate reporting. The
SAC continues to recognize external certification (i.e. Rainforest Alliance) that
meets/exceeds our standards. In line with the UN Guiding Principles on Business and
Human Rights (2011), we base our human rights commitment and policy on the
International Bill of Human Rights (consisting, in addition to the Universal Declaration of
Human Rights, of the International Covenant on Civil and Political Rights, and the
International Covenant on Economic, Social and Cultural Rights) and the principles
concerning fundamental rights set out in the ILO Declaration on Fundamental Principles
and Rights at Work. We also support the OECD Guidelines.
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F5. Business strategy
F5.1
(F5.1) Are forests-related issues integrated into any aspects of your long-term
strategic business plan, and if so how?
Are forests-
Long-term
Please explain
related issues
time
integrated?
horizon
(years)
Long-term
Yes, forests-
16-20
Unilever is one of the largest buyers of palm oil, we buy
business
related issues
around 10% of the world’s black tea & large volumes of
objectives
are integrated
soy as inputs for our brands. Our vision is to be the
global leader in sustainable business by demonstrating
that our purpose-led, future-fit business model drives
superior performance, consistently delivering financial
results in the top third of our industry. We’ve put
sustainability at the core of our new business strategy,
the Unilever Compass, to drive our long-term climate,
nature (including deforestation) & nutrition objectives
from 2021 to 2039.
Our Compass builds on the Unilever Sustainable Living
Plan (2010-2020) targets which drove sustainable
sourcing for agricultural materials including palm oil, soy
& paper & board (P&B) & ran alongside our 2010
industry commitment to achieving zero net deforestation
for these 3 commodities & beef by 2020.
Our long-term Compass targets include net zero
emissions from all our products (sourcing to point of
sale) by 2039; halving the GHG impact of products
across the lifecycle by 2030; helping to protect &
regenerate 1.5m hectares of land, forests & oceans by
2030; 100% sustainable sourcing of key agricultural
crops; empowering farmers & smallholders to protect &
regenerate farm environments; & Euro1b annual sales
from plant-based meat & dairy alternatives by 2025-27.
In the interim, we’re targeting a deforestation-free supply
chain by 2023 (for palm, P&B, tea, soy, cocoa).
Sustainable sourcing & eliminating deforestation help
mitigate impacts of climate change: reducing risk &
volatility in our supply chains & with our suppliers; &
securing current & future supplies for our business
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growth ambitions (3-5% annually). They also lower costs
& build trust among stakeholders.
Sustainable sourcing brings opportunities for innovation
too, building stronger brands by focusing on needs for
more sustainable living & consumer preferences. E.g.
palm is the most land-efficient vegetable oil, producing
more oil per hectare than any oil-producing crop. The
same amount of oil from soybeans would require 7x
more land, putting more forests at threat when
sustainable agriculture is needed more than ever to
support the rise in plant-based diets & desire for more
sustainable products. Ultimately, we plan to share the
carbon footprint of every product we sell.
Strategy for
Yes, forests-
16-20
Climate change is the biggest risk to society, & in our
long-term
related issues
business, 65% of our GHG emissions come from
objectives
are integrated
products in use. That’s both a risk & a significant growth
opportunity to shape our business & brands to reduce
GHG & tackle deforestation via sustainable sourcing,
regenerating nature, supporting smallholder farmers &
selling more plant-based foods.
We identify climate change (including deforestation) &
our supply chain as principal risks to Unilever & in 2019
and 2020 performed high-level assessments of the
impact of 2°C & 4°C temperature-rise scenarios on soy,
palm oil & tea and in 2021 we looked at a 1.5°C scenario
for palm oil and collective ingredients and commodities.
These assessments aim to help refine our strategy.
Via our Compass strategy, we're driving our long-term
climate & deforestation objectives to 2039 through
targets that tackle the intertwined issues of climate,
nature (land, forests & oceans) & nutrition. In 2020 we
published our Climate Transition Action Plan to show
how we’ll strengthen the climate performance of our
400+ brands & reach our ambitious target to reduce
emissions to net zero across our value chain by 2039.
Tackling our highest deforestation risk crops is crucial to
this.
We’re focusing on sustainably sourcing the 12 key crops
which make up about 2/3 of our agricultural raw
materials. Our People & Nature Policy (2020) covers 5
deforestation & conversion-risk crops (palm oil, paper &
board, soy, tea, cocoa) to protect natural ecosystems &
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promote human rights, supporting our Compass goal for
a deforestation-free supply chain by 2023. Our
Sustainable Agriculture Code & Regenerative Agriculture
Principles provide guidance on soil, carbon capture &
restorative & regenerative practices: we’re initiating
these Principles with selected suppliers in 2021. All
materials purchased must comply with our Responsible
Sourcing Policy.
As part of our Compass, we launched our €1 billion
Climate & Nature Fund, which our brands will use over
the next 10 years to take meaningful action to improve
the health of the planet. We are investing up to $25m
over 2018-2022 in sustainable commodity projects eg
running programs and sourcing sustainably from
smallholders (SHFs) in Indonesia and Cote d’Ivoire.
Financial
Yes, forests-
16-20
Via our Compass strategy we aim to demonstrate that
planning
related issues
our purpose-led, future-fit business model drives
are integrated
superior performance, consistently delivering financial
results in the top third of our industry. Our Compass
incorporates sustainable sourcing targets for key crops
including our 5 forest conversion-risk crops (palm oil,
soy, P&B, tea, cocoa).
We reinforce our targets with a partnership approach &
advocacy, aiming to create systemic change that
contributes to the SDGs & to future economic & our own
business growth.
To further understand potential financial impact of
climate change on our commodities in the long term
(2030), we used our high-level assessment of the of 2°C
& 4°C global warming scenarios to 2100. We selected
soy, palm oil & black tea for analysis to model how
change in yield in 2030-2050 & supply could impact
procurement costs, so helping us price in any mitigation
measures such as forward buying or reformulating our
products over the long-term.
Soy benefits from historical price data & suitable climate
models, & we buy large volumes of it, particularly for
Hellmann’s mayonnaise. In the US our work with the
Field to Market alliance & Practical Farmers of Iowa
supports farmers to improve soil health & water quality,
boosting productivity & resilience to climatic & economic
conditions. In Latin America we’re in long-term
collaboration to improve the sustainability of soy
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cultivation. The cost of such initiatives is included in our
material costs forecast. In the short-term, commodity
price risk is managed through forward buying of traded
commodities & other hedging mechanisms. Trends,
including weather patterns, are monitored & modelled
regularly & integrated into our forecasting process,
although we recognise there is more to do on modelling
extreme weather events.
On palm, we worked with Potsdam Institute for Climate
Impact Research to develop suitable climate models.
One of our mitigations was investing in our Unilever
Oleochemical Indonesia (UOI) plant to source directly
from palm oil suppliers, thus shortening our supply chain
by removing intermediary traders.
By practising financial prudence, we manage commodity
price fluctuations & have better control over production
costs. This enables us to keep our products affordable &
accessible.
F6. Implementation
F6.1
(F6.1) Did you have any timebound and quantifiable targets for increasing sustainable
production and/or consumption of your disclosed commodity(ies) that were active
during the reporting year?
Yes
F6.1a
(F6.1a) Provide details of your timebound and quantifiable target(s) for increasing
sustainable production and/or consumption of the disclosed commodity(ies), and
progress made.
Target reference number
Target 1
Forest risk commodity
Timber products
Type of target
Engagement with direct suppliers
Description of target
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We engage with our wood fibre suppliers to complement the controls embedded in the
certification standards, FSC and PEFC. We work with all suppliers to continuously drive
for greater transparency to sourcing origins and improved capabilities to manage own
operations, supply chains, and sub-suppliers. Third party certification for P&B come with
robust controls to ensure sustainable forest management and chain of custody of
certified materials. Unilever believes that greater transparency and improved capabilities
drive the full transformation required to completely protect forests. This target reflects
our achievement in engaging our entire supply base on transparency and improved
management.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
Start year
2010
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
% of target achieved
100
Please explain
We engage directly with our 240 tier 1 (direct) paper and board packaging suppliers to
discuss our policy requirements, collect data and assess their capabilities. Together, we
establish a roadmap to achieving our targets. Supplier engagement is channelled
through local buying and procurement teams and is supported by internal educational
materials on sustainable forest management, supply chain transparency and 3rd party
certification to equip Unilever buyers disseminate technical materials and provide
capacity building. 100% of the suppliers in our Enterprise Resource Planning (ERP)
transactional systems were engaged to provide data through the Global Traceability
Solutions (GTS) system in 2020. We engaged a further 50-100 suppliers on the
conversion to certified recycled. Regular engagement is very important to ensure our
partners are aligned with our ambitions. Specifically, we have worked directly with
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suppliers of uncertified recycled volumes, in South Asia, East Africa, West Africa and
Central America to attain FSC/PEFC chain of custody certification and procure certified
recycled fibre for their own manufacturing. In 2021, we engaged Smurfit Kappa Costa
Rica to ensure they had the certifications and volumes to deliver certified volumes to
Unilever into the future. These efforts are the main reason why we have been able to
continue to increase the volume of third party certified material, from 79% in 2017 to
92.9% in 2021. By providing financial incentives for certified products and paying higher
prices linked to best agricultural practices, we send market signals to our suppliers to
continue their certification and best practices. Our suppliers self-assess their
performance on a quarterly basis reporting via the GTS system, which we developed for
this purpose.
Case study: In 2021, we collected data for 98% of the materials we purchase. Annually,
we engage SGS to verify the information reported. Each supplier reporting via GTS
receives a “Supplier Sustainability Summary” report that summarises the overall
sustainable sourcing percentage achieved by the supplier based on data provided.
These reports facilitate subsequent direct engagement and discussions with Unilever to
identify gaps and develop strategies to reach our 100% target.
Target reference number
Target 2
Forest risk commodity
Timber products
Type of target
Third-party certification
Description of target
Unilever uses third party certification as a target given FSC and PEFC’s strong
standards and implementation around forest management - including requirements on
no deforestation and no conversion, entry of controlled fibre sources, physical
segregation from uncontrolled sources and chain of custody of ownership and
traceability back to forest origins.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
FSC Forest Management certification
FSC Chain of Custody
FSC Controlled Wood
FSC Recycled
PEFC Chain of Custody
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Start year
2010
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
% of target achieved
92.9
Please explain
Our public commitment to 100% sustainable sourcing was a Unilever Sustainable Living
Plan target (2010-2020) & remains an important target in the new Unilever Compass.
Our Sustainable Paper and Board (P&B) Packaging Policy supported market
transformation by working with key suppliers & the industry to halt deforestation,
promote best practices in sustainable forest & pulp plantation management, and drive
positive economic & social impact on people and communities. This Policy is now
embedded in our new cross commodity People & Nature Policy (2020). We buy paper
packaging that comes either from well-managed forests certified as FSC or PEFC or
from recycled material. Sometimes we need to source virgin P&B - for example
because of safety regulations - and when we do, we buy from certified sources with a
full chain of custody. Unilever Sustainable Sourcing Assurance team conducted a
rigorous benchmarking of fibre standards to our Sustainable Agriculture Code (SAC)
criteria & has also written an internal report comparing FSC and PEFC to illustrate key
similarities and differences to internal procurement stakeholders. Based on these
reviews, FSC and PEFC are third-party standards deemed to meet or exceed our
Sustainable Agriculture Code requirements for sustainable sourcing. In 2020, 98% of
the directly-purchased P&B packaging materials we used were made from recycled fibre
or came from certified sustainably managed forests. We also decreased the amount of
recycled fibre without chain of custody from 21% to 3.2%, advancing to 92.9% total
chain of custody against our commitment to reach 100% coverage by 2020.
Target reference number
Target 3
Forest risk commodity
Timber products
Type of target
Assess and/or verify compliance
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Description of target
Our public commitment to 100% sustainable sourcing of key agriculture & forestry
materials remains an important target in the new Unilever Compass, including wood
fibre. We assess & verify the fibre composition of our products annually to ensure the
recycled % is on track with our target. There are 2 parts to our main paper & board
(P&B) sourcing target. Part of our target is to source our packaging from certified
sustainably managed forests, & part is to source from recycled material, both by the end
of 2021and continuing onwards as part of the new Unilever Compass. Target 3 for
Timber is focused on our target to assess and/or verify compliance with our policy. We
only accept recycled fibre products when they come from certified sources (with full
chain of custody). New target extends to include deforestation free rather than purely
certification.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
Start year
2021
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
% of target achieved
100
Please explain
All of our suppliers are involved in our annual verification audit for establishing high
confidence, statistically significant estimates of policy compliance by way of delivery of
certified materials. All suppliers are part of the pool from which a randomized, stratified
and volume weighted sample is taken to provide further evidence of compliance to the
third party auditor. This sample is used to extrapolate overall compliance of suppliers
and thus volumes with greater than 95% confidence. As of 2021, this target will include
deforestation free rather than purely certification.
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Target reference number
Target 4
Forest risk commodity
Palm oil
Type of target
Third-party certification
Description of target
Responsible & sustainable sourcing is fundamental for driving sustainability throughout
our supply chain, from the largest commodity suppliers to smallholder farmers. It
involves raising the standard of agricultural practices to drive social, economic &
environmental improvements. Our commitment to 100% sustainable sourcing was a
Unilever Sustainable Living Plan target & remains an important target in the new
Unilever Compass. This means sourcing 100% physically certified volumes for palm oil,
palm kernel oil & palm derivatives. This is part of our People and Nature Policy which
states direct suppliers must maintain an effective and appropriate chain of custody from
oil palm plantation to Unilever’s manufacturing facilities and/or Unilever’s third party
manufacturer’s facilities. 3rd-party certification standards like RSPO are one means to
independently verify good agricultural practices & a chain of custody to ensure we meet
our deforestation & conversion-free target by 2023.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
RSPO producer/grower certification
RSPO Segregated
RSPO Mass Balance
Start year
2009
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
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% of target achieved
90
Please explain
Unilever is one of the biggest consumer goods manufacturing (CGM) buyers of
physically RSPO certified materials, with our certified volumes representing 12.7% of
the CGM’s total physically certified demand. Building on our Unilever Sustainable Living
Plan (2010-2020), our Unilever Compass (2020) continues to set a goal for 100%
sustainable sourcing of our key agricultural crops, including palm. We have been
purchasing RSPO-certified materials since 2009. In 2021, 90% (902,449 metric tonnes)
of our palm core volumes were certified - 84.2% MB, 2.1% SG and 3.7% independent
smallholder credits. Unilever was the largest buyer of independent smallholder (IS)
credits, purchasing over 33,000 tonnes of RSPO IS-Credits from 33 smallholder groups,
directly benefitting over 11,000 IS farmers located across Indonesia, Thailand and
Malaysia. This group of RSPO- certified IS represents over 30,000 ha of land. We
source 100% RSPO-SG palm materials for Europe & Australia for our foods businesses
& are sourcing RSPO certified MB volumes for our global markets.
Furthermore, Unilever has pioneered and made financial investments in five major oil
palm producing jurisdictions - North Sumatra, Riay, Aceh, Central Kalimantan, and
Sabah. For example, the project in Sabah is endorsed by RSPO and contributes to the
RSPO jurisdictional certification process, directly supporting RSPO certification of
minimally 60,000 hectares of oil palm plantations. We also have seven programmes with
partners such as Conservation International, Daemeter, Inobu, World Resources
Institute and Fortasbi. We continued our partnerships with our stakeholders along with
our mill partners for continuous implementation and monitoring of our programmes. Our
Smallholder Livelihood programme certified a total of 2,200 IS in 2021. Such investment
into partnerships increases the scale of our projects with farmers with the provision of
training on good agricultural practices (GAP), NDPE principles, mapping, facilitation of
access to goods and services and certification. Thus, creates avenue for increase
RSPO certification and provide further support to smallholders through the purchase of
RSPO smallholder credits.
Target reference number
Target 5
Forest risk commodity
Palm oil
Type of target
Traceability
Description of target
Through our People and Nature Policy, we require our suppliers to be in compliance
with and to share data with Unilever from traceability systems which establish a link to
the land where materials originate and to ensure a chain of custody is in place. To
improve our knowledge on the ground, traceability allows us to monitor land use,
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manage risks and direct investments into sustainability activities. We use survey-based
data collection and are investing in satellite, geolocation, blockchain and AI by
partnering with tech firms and innovative start-ups to develop new approaches towards
monitoring and traceability from mill to plantation.
Linked commitment
Zero net/gross deforestation
Traceability point
Mill
Third-party certification scheme
Start year
2013
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
% of target achieved
90
Please explain
Since 2016, we have partnered Rainforest Alliance (RA) to capture suppliers' traceability
data and information about their NDPE Policy & sustainability implementation, via a six-
monthly questionnaire, which is combined with PalmTrace data. In 2021, we
strengthened our methodology and partnered with 3Keel to gather traceability data.
Currently, we are at about 90% traceable to mill with visibility to around 1400 mills in our
extended supply chain. Our People and Nature Policy, through our requirements
embedded in supplier contracts, asks all suppliers to provide traceability information
from Unilever factories to secondary processing, mills and plantations. Suppliers are
also required to compile spatial data of their supply base to disclose to Unilever through
our data collection tools. In 2021, we continued building our capacity to use satellite
data, geolocation tools, & blockchain as new approaches to monitoring & traceability
from mill to plantation. We work with partners, including Earthqualizer (EQ), World
Resources Institute (WRI), Google (Google Earth Engine), NGIS, Descartes Labs &
Orbital Insights to utilise industry data & build bespoke tools for improved traceability &
analysis to enhance monitoring & response to environmental & social risks in our palm
supply chain. Our partnership with Orbital Insights anonymises geolocation-tracking
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capability to increase traceability from plantation to mill, enabling identification of
deforestation risks in our supply chain. We access anonymised geolocation data for
inferred traceability on the OrbitalGo platform. Our work with Descartes Labs
partnership allows for geospatial data layers on palm and forest to allow for traceability
data in our own deforestation monitoring platform. In 2021, together with NGIS and
Google, we built our NDPE Dashboard which combines the power of cloud computing
with Google Earth’s satellite imagery capabilities for better detection of deforestation
and priorities areas of urgent forests or habitat protect creating a digital space for
monitoring purposes.
Target reference number
Target 6
Forest risk commodity
Palm oil
Type of target
Engagement with smallholders
Description of target
Under our new Unilever Compass strategy, we committed to ensuring that everyone
who directly provides goods and services to the company earns at least a living wage or
income by 2030. The objective of our smallholder programmes is to increase profitability
and incomes for farmers by improving the sustainability of farming practices,
professionalising smallholder farming business and promoting RSPO certification. We
interact with smallholders through credit-purchases, our independent mill program, and
ground-level projects supported by Unilever and implemented by our partners. We
believe that combining certification efforts with low-risk sourcing, traceability and
technology to enable smallholder inclusion will help us create a deforestation-free
supply chain.
Linked commitment
Social commitments
Traceability point
Third-party certification scheme
Start year
2020
Target year
2030
Quantitative metric
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Target (number)
25,000
Target (%)
% of target achieved
80
Please explain
Unilever is committed to the sustainable sourcing of key crops and achieving a
deforestation-free supply chain by 2023. We are investing in growing the number of
certified farmers, farmer groups and the volume of certified oil palm fruit in the global
market. We seek to empower smallholders with a living income, by increasing
profitability through climate-resilient, sustainable farming practices, professionalising
smallholder farming business & promoting RSPO certification. Our smallholder
programmes unite traditional extension approaches and digital technology to monitor,
analyse and change farming practices for improved sustainability + profitability.
These programs include training in Good Agricultural Practices and NDPE principles,
mapping, facilitation of access to goods + services (e.g. inputs, seedling, land titling,
financial/technical support) and certification. We have seven programmes with various
partners such as Conservation International, Daemeter and INOBU, involving more than
9000 smallholders across Indonesia and Malaysia. We continue to invest in partnerships
to increase the scale of projects with farmers. We directly incentivise and support the
livelihoods of independent smallholders through RSPO Independent Smallholder (IS)
credits.
We invest in landscape and jurisdictional approach programs with partners that embed
workstreams to increase the production of physically certified palm oil at scale with the
involvement of local governments, civil society, and local private sector actors.
We continued partnerships with Conservation International, Daemeter, IDH, INOBU,
WWF, along with our mill partners for continuous implementation and monitoring of our
programs. At the end of 2021, we launched a smallholder mapping program in
partnership with Meridia Land, with the ambition to map over 30,000 smallholders. By
the close of 2021, we had mapped 1,500 smallholders. In 2021, Unilever was the largest
buyers of independent smallholder (IS) credits, purchasing over 33,000 tonnes of RSPO
IS-Credits from 33 smallholder groups, directly benefitting over 11,000 IS farmers
located across Indonesia, Thailand and Malaysia. We secured volume in 2021 by
guaranteeing smallholders the purchase of their credits before certification renewal,
Collectively, this group of RSPO- certified IS represents over 30,000 ha of land.
Target reference number
Target 7
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Forest risk commodity
Soy
Type of target
Third-party certification
Description of target
Responsible and sustainable sourcing is a cornerstone of our approach to drive
sustainability throughout our supply chain. It involves raising the standard of agricultural
practices to drive social, economic, and environmental improvements. Our Unilever
Compass sets out to continue 100% sustainable sourcing of our key agricultural crops,
which includes soy. This is included in our People & Nature Policy which mandates
direct suppliers to maintain an effective and appropriate chain of custody from the soy
origins to Unilever’s manufacturing facilities and/or Unilever’s third party manufacturer’s
facilities. Third party certification standards, like RTRS or ProTerra, are one means by
which to independently verify good agricultural practice and a chain of custody to ensure
we meet our deforestation and conversion-free commitment by 2023.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
RTRS (any type)
RTRS Production
RTRS Segregated
RTRS Mass Balance
RTRS Credits
ProTerra certification
International Sustainability and Carbon Certification (ISCC)
Other, please specify
Unilever Sustainable Agriculture Code (SAC), US SSAP + FtM FPC
Start year
2011
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
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% of target achieved
100
Please explain
Our Sustainable Agriculture Code (SAC) defines our requirements for sustainably
sourced materials. It covers the requirement for no conversion & no deforestation,
among other environmental, social & economic criteria. We are committed to working
with the industry to drive change, so we benchmark the SAC against recognized
certifications used by the industry to define which 3rd party certifications are equivalent.
Industry standards considered equivalent to the SAC may have a global scope or
regional scope, depending on the specific challenges the standards aim to address, but
they all require that soybean production is deforestation or conversion-free. Origins of
our soybean oil in 2021 were US, Canada, Argentina, Bolivia, Brazil, China, Ukraine and
the European Soy Producing Countries. For US soy, we recognize the US Soybean
Sustainable Protocol (US SSAP) in combination with the Field to Market Fieldprint
calculator (FtM FPC) and other programs as equivalent to our SAC. The key challenges
identified in the US Mid-West are soil health & water quality due to unsustainable
farming practices such as heavy use of agricultural inputs. To address this, we
developed an impact program promoting the use of cover crops to improve soil health &
water quality. The combination of US SSAP, FtM & the impact approach allows us to
ensure farmers in our program comply with our SAC & regenerative agriculture
principles (RAPs). For Brazilian soy, RTRS is our key standard to ensure deforestation
& conversion-free soy for GMO soy & Pro-Terra for non-GMO soy. We have set up an
RTRS certification program in the Brazilian Cerrado with a group of 30+ farmers
producing enough responsible soy to cover UL footprint for the local market. By having
the possibility of using different regional standards, we ensure compliance to our People
and Nature Policy and Unilever SAC, while still providing suppliers with flexibility to meet
these standards & support sustainable sourcing initiatives. In 2021, 100% of our soy oil
was sourced sustainably via RTRS Certification, Pro-Terra Certification, ISCC & US
SSAP with FtM FPC plus an impact program.
Target reference number
Target 8
Forest risk commodity
Soy
Type of target
Traceability
Description of target
Via our People and Nature Policy, we require that Direct Suppliers have and share with
Unilever data from traceability systems that can establish a link to the land from which
the materials originate and ensure a chain of custody is in place, so that compliance
with our Policy can be monitored and assured. Since 2019, we have partnered with
Proforest to conduct supplier traceability assessments for all our direct suppliers of
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Soybean Oil and we have since 2021 embedded traceability into our contractual
process.
Linked commitment
Zero net/gross deforestation
Traceability point
Mill
Third-party certification scheme
Start year
2010
Target year
2023
Quantitative metric
Target (number)
Target (%)
100
% of target achieved
97
Please explain
Many soy producing countries have rampant deforestation & habitat conversion. In
Brazil, conversion rates vary by municipality & are not isolated to a specific region of the
country. We need to gain transparency of where suppliers are sourcing soybeans from,
to adequately assess risk exposure & take action. In 2019, we commissioned Proforest
and Sourcemap an assessment of traceability and deforestation risk exposure. This
project followed a three-step process, of (1) designing and implementing survey with
suppliers to gather data on the flow of beans through each supply chain; (2)
categorizing, scoring and visualising information in dashboards and maps; and (3)
engaging suppliers to identify and agree to approaches to facilitate the delivery of
deforestation-free beans to Unilever. In 2020, we engaged soy suppliers to find low risk
of deforestation solutions. We then conducted a traceability assessment in 2021 to
quantify the results of our efforts to deliver our deforestation-free commitments. The
2019 assessment found that 93% of Unilever’s volumes are traceable to country of
origin. Since this assessment, we have moved swiftly to address forest-risk exposure. In
2020 and 2021, we worked with suppliers on solutions that include moving sourcing
from high to low-risk origins in long supply chains & sourcing segregated certified
soybean oil in high-risk origins. As a result, we shifted 400,000 tons of soy bean
sourcing from high-risk areas to lands with a low risk of deforestation in 12 different
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markets, representing 93% of our soy volumes. For the remaining gap, we are working
with our key supplier in Brazil on bespoke verified deforestation-free solution. Our
Proforest traceability assessment in 2020 that served as a bases for contracting in 2021,
found 97% of our global soybean oil consumption is traceable back to mill & 96% to
country level (country origins can sometimes be less clear than mill origins in soy SC).
For soybean oil originated in high-risk countries, 68% is traceable to state level & 60% is
traceable to municipality level. Going forward we will further focus on improving our
traceability to municipality level for all high-risk countries to aid decision making around
risk exposure and action.
Target reference number
Target 9
Forest risk commodity
Soy
Type of target
Engagement with direct suppliers
Description of target
Our People and Nature Policy is to be implemented across all Direct Suppliers for In-
Scope Materials in Unilever’s supply chain, including soy. Our target is to engage with
100% of direct suppliers of Soybean Oil to share our request for deforestation and
conversion free soy, to assess their existing soybean oil sourcing and deforestation risk,
and to agree on low-risk sourcing solutions.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
Start year
2020
Target year
2023
Quantitative metric
Target (number)
Target (%)
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100
% of target achieved
100
Please explain
Following our new Unilever Compass commitment to a deforestation-free soy supply
chain by 2023, we mapped 100% of our direct suppliers of soybean oil by using our
sustainable sourcing reporting system. We then conducted engagements with 100% of
the suppliers to share our commitment to no deforestation and conversion and to ask
for deforestation and conversion-free soybean oil. These engagements were co-led by
the procurement portfolio and the sustainable sourcing team. We conducted rigorous
assessments on our suppliers to identify their own commitments, targets and progress
on this matter. We also evaluated the deforestation risk in our supply chains, and we
agreed on sourcing from low-risk origins or from fully segregated certified sources for
over 93% of our soybean oil portfolio. These agreements were embedded in contractual
clauses in suppliers’ contracts. We currently continue to engage with our suppliers to
develop solutions for the remaining 7% of our soybean oil volumes. As a next step, we
will be implementing independent verification audits to ensure that our soybean oil
supply chain is verified deforestation free.
Target reference number
Target 10
Forest risk commodity
Other - Cocoa
Type of target
Third-party certification
Description of target
Responsible and sustainable sourcing is a cornerstone of our approach to drive
sustainability throughout our supply chain, from the largest commodity suppliers to
smallholder farmers. It involves raising the standard of agricultural practices to drive
social, economic, and environmental improvements. Our Unilever Compass sets out to
continue 100% sustainable sourcing of our key agricultural crops, which includes cocoa.
This means sourcing 100% of our cocoa volumes sustainably, through SAC or an
equivalent certification standard or sustainability programme such as Rainforest Alliance
(RA) and Fairtrade.
Linked commitment
Zero net/gross deforestation
Traceability point
Third-party certification scheme
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