Sustainability at the source: How Unilever is addressing deforestation, living wages, and regenerative agriculture
Unilever is one of the world’s largest consumer goods companies. With products available in more than 190 countries, it is estimated that 2.5bn people use at least one Unilever product per day.
In food, Unilever has some big names in its portfolio. From Lipton to Magnum, Knorr and Hellman’s, the company’s Foods & Refreshment division boasts an annual turnover of more than $19bn.
Unilever has a significant footprint in soy, palm oil and cocoa, amongst other ingredients commonly associated with unethical practices in sourcing regions. The company is committed, however, to addressing sustainability at the source, according to Hanneke Faber, President Foods & Refreshment at Unilever.
“Farmers are a critical part of the entire food system,” she said at FoodNavigator’s Climate Smart Food event, adding that Unilever is focused on three key areas in sourcing regions: a deforestation-free supply chain, living wages, and regenerative agriculture.
Spotlight on deforestation: ‘Not all oil is certifiable’
Along with F&B giants including Nestlé, PepsiCo, Kellogg’s, Mondelēz, and General Mills, Unilever had committed to eliminating deforestation from its supply chain by 2020.
With this deadline now come and gone, FMCGs have new timelines in their sight. “We’ve committed to achieving a deforestation-free supply chain by 2023,” Faber told FoodNavigator.
“The challenge here is traceability. We source from a very large variety of suppliers around the world, they harvest in places like Brazil and Indonesia, and we’ve found it’s not always 100% certifiable what happens to every drop of oil we buy.
“But we absolutely have to get there and we have to get there fast. This is where technology increasingly helps.”
Globally, Unilever uses about 1 million tonnes of crude palm oil and its derivatives, and about 0.5 million tonnes of crude palm kernel oil and its derivatives. This means that in total, the CPG impacts approximately 5 million tonnes – equating to 8% of global palm oil production.
“We have a partnership with Google Cloud to capture satellite images, so that we exactly see, 24/7, that nothing gets cut down for the ingredients we buy,” the Foods & Refreshments chief explained.
And in soy and palm oil specifically, Unilever is working with Orbital Insight to combine satellite images of Indonesia and Brazil with geolocation data, to paint a clearer picture of ‘the first mile’ – the journey that palm oil fruit or soybeans travel from the plantation to a mill.
Living wages for suppliers
Ensuring farmers and suppliers along the supply chain in sourcing countries earn a living wage is another priority for Unilever.
A living wage, or living income, is one that gives people enough to provide for their family’s basic needs for food, water, clothing, housing, education, transportation and healthcare.
“We’ve committed to ensure that everyone who directly provides goods and services to us earns at least a living wage by 2030,” said Faber.
Currently, Unilever pays all of its own employees – just over 150,000 people – at least a living wage. However, this latest commitment, announced earlier this year, means the company will secure the same for people beyond its own workforce. “Especially focusing on the most vulnerable,” she continued, “and that’s in manufacturing and in agriculture – so smallholder farmers.”
Unilever has a challenge in front of it. It will require collaboration with suppliers, other businesses, government and NGOs to create ‘systemic change’, we were told.
Unilever asks its suppliers to comply with its Responsible Sourcing Policy, made up of 12 fundamental principles. These aim to ensure a number of key human rights are respected.
This includes making sure that all workers are paid fair wages, working hours for all workers are reasonable, workers are of an appropriate age, and land rights of communities, including indigenous peoples, will be protected and promoted.
So what happens when these principles are breached? “If a supplier is found to be in breach of those expectations, our aim is always to first work together and agree some sort of remediation plan, rather than automatically stop business,” Faber explained.
There would be, however, a ‘number’ of occasions when a relationship with a supplier would be suspendeded, she revealed, but stressed that is not always the first port of call – particularly where living wages are concerned.
“We’d rather create the right relationships and make sure the living wage does happen.
“We have hundreds of thousands of suppliers around the world. You can imagine how complicated this is, but we’re committed to go and do it.”
What does regenerative agriculture mean for Unilever?
Elsewhere in sourcing regions, Unilever is homing in on regenerative agriculture.
A topic attracting a lot of attention of late, regenerative agriculture refers to farming practices that help to mitigate and reverse climate change.
“It is so important and it’s not happening, almost anywhere, today,” Faber told FoodNavigator’s Climate Smart Food event.
For Unilever, regenerative agriculture refers to a set of guidance it introduced earlier this year that it hopes will ‘inspire’ its business, suppliers, and peers to start moving to more climate-friendly agricultural practices.
“We really define it by a set of farm practices…with positive impacts in terms of soil health, water preservation, biosequestration capture of carbon, biodiversity, and increased climate resilience.”
Unilever is investing in putting regenerative agriculture at the forefront of a number of programme around the world, and Faber revealed more will be announced soon. One example, she told us, concerns soybean oil.
The majority of Unilever’s soy oil comes from soybeans grown in the US and Brazil. It is an important ingredient in its brands, with Hellman’s mayonnaise a key example. “As soybean oil farming is very mechanised, it has a history of being associated with soil erosion,” Faber explained.
In Iowa, US, Unilever is working with soy farmers and soy oil suppliers to increase the use of cover crops in order to protect the soil. “A cover crop is a crop that is just planted to cover the soil, rather than be actually harvested and soil,” the Foods & Refreshment chief explained.
“That’s an investment for farmers, because [it’s their responsibility to do it]. They usually do it in the off season, but it takes time and it takes money.
“But we’ve learned it can play an absolutely vital role in terms of mitigating greenhouse gas emissions and preventing soil erosion.”
Unilever kickstarted the Iowa pilot project in 2015 with just 23 farmers. According to Faber, the programme was ‘really successful’ in rejuvenating soil health. As a result, the programme has since expanded to include 361 Iowa farmers who have planted around 126,000 acres of coper crops – accounting for about 10% of all Iowa cover crops.
“Of course, we have many more crops in many more countries and regions around the world, which again is why this is a big programme. But it is absolutely critical to saving the planet.”
