Climate change

The issue

Climate change is one of the most serious issues facing the world. Extreme weather patterns and water scarcity will affect people everywhere, with developing countries likely to be among the most vulnerable.

There will be serious consequences for our business operations, including threats to our agricultural supply chain and the availability of water in some of our markets.

The costs of addressing climate change now, while considerable, are likely to be far less than waiting and allowing the problem to get worse.

We have joined business coalitions endorsing the need for action.

Our approach

In 2007, the Unilever Executive agreed to a greenhouse gas strategy.

Our approach to reducing our greenhouse gas emissions addresses both our direct and indirect impacts.

For our direct impacts we seek to:

• reduce CO2 from energy in our manufacturing operations by 25% by 2012 (measured per ton of production against a baseline of 2004). This builds on our reductions to date.

For our indirect impacts we seek to:

• improve the footprint of our existing product portfolio, using our new vitality metric

• assess innovations using our greenhouse gas profiling tool

• work with our customers and suppliers to address our wider impacts.

Our carbon footprint

We estimate Unilever's total emissions of greenhouse gases from our own factories, offices, laboratories and business travel to be of the order of four million tons of CO2 equivalent a year. Our wider footprint in sourcing of agricultural and chemical raw materials can amount to around 10 times as much as our own emissions, and in consumer use and disposal of products may reach between 30 and 60 times as much as our own emissions, depending on the assumptions made about how consumers use our products.

Our direct impacts

• Greenhouse gas emissions in manufacturing

Since 1995 we have achieved a 39% reduction in CO2 from energy per ton of production (equivalent to a 43% reduction in absolute terms). In 2008, we reduced our CO2 emissions by 2.2% per ton of production compared to 2007. This keeps us on track to meet our 2012 target.

We continue to work towards our 2012 target by investing in more efficient power and steam generation technology and the development of less energy-intensive manufacturing processes. Our approach has been to target the sites which emit the most CO2.

In Europe, we now have three combined heat and power plants operational in Caivano and Cisterna, Italy, and Stavenhagen, Germany. These are more environmentally efficient than importing electricity from the national supplier because they fully utilize the waste steam and hot water from electrical power generation. We are planning to install additional co-generation facilities in Europe to reduce regional greenhouse gas emissions.

We are exploring alternative technologies in other regions, too. For example, at our Cu Chi factory in Vietnam, we installed solar panels to preheat water for steam generation.

As well as capital investment in more energy-efficient technology, raising awareness and behavior change are also an important factor in reducing emissions. Simple practices such as turning off lighting, heating and equipment when not needed and reporting steam and compressed air leaks can deliver big energy savings. During 2008, we have conducted workshops to share good practice and raise technical capabilities in each region.

Non-manufacturing impacts

Although smaller in scale, reductions in energy at non-manufacturing sites are possible, too. In 2008, our UK marketing and sales organization set target reductions for employee commuting, business travel and distribution and have developed a template which other marketing and sales organizations are using.

We are also seeking improvements in the impact of our IT infrastructure. Measures such as consolidation of data centers, energy reduction targets, new procurement guidelines, recycling and reuse of equipment will reduce our footprint and help us save over €6 million a year in Europe by 2010.

The advanced video-conferencing facilities we have installed at seven locations worldwide have already reduced our footprint by an estimated 1,700 tons of CO2 and saved €5 million in travel costs.

Climate-friendly refrigerants

Unilever has been working in close cooperation with Greenpeace on climate-friendly refrigerants in an alliance called Refrigerants Naturally! This multi-stakeholder initiative aims to promote HFC (hydrofluorocarbon)-free refrigeration technologies.

We own over two million point-of-sale ice cream freezer cabinets worldwide. Since 2004, as part of our commitment, we have been replacing these cabinets with more energy-efficient and climate-friendly alternatives, using a hydrocarbon refrigerant. We are focusing on the most common freezer type, the horizontal cabinet. Although for technical and legislative reasons it is not possible to replace all cabinets, we have made good progress in Europe and extended the roll-out to China and the U.S. during 2008. By early 2009, we had over 400,000 hydrocarbon refrigerant cabinets in use. We have now changed about 35% of our European horizontal cabinet fleet.

We publicize these activities in our local markets. In 2008, Unilever represented Refrigerants Naturally! at a major trade show in Shanghai. Our team presented at a natural refrigerants seminar and demonstrated our climate-friendly ice cream cabinets on the Refrigerants Naturally! stand. Together with our Refrigerants Naturally! partners, we also sponsored a seminar at the biennial Gustav-Lorentzen conference on natural refrigeration in Copenhagen.

U.S. activity

The introduction of new refrigerants in the U.S. is highly regulated, requiring formal application for their use through the Environmental Protection Agency's SNAP program. Ben & Jerry's has submitted a SNAP application for the use of the climate-friendly refrigerant in ice cream cabinets and permission has been granted to Ben & Jerry's to pilot test 50 hydrocarbon freezer cabinets. The EPA's approval will pave the way for the introduction of hydrocarbon refrigeration in the U.S.

To read more about Hydrocarbon – The New Cool and The Cleaner Greener Freezer, see Ben & Jerry's website.

Our indirect impacts

Beyond our direct emissions, our wider value chain shows greenhouse gas emissions at every stage of the value chain – including the sourcing, distribution, consumption and disposal of our products.

Use by consumers

For many of our products, the largest emissions of CO2 occur during their use by consumers. This is particularly true for those home and personal care products that are used with heated water, such as laundry, bath or shower products.

One way we reduce the footprint of our products is in their formulations. For example, our concentrated laundry detergents such as Omo/Persil use fewer raw materials and packaging, are less energy intensive to manufacture, cost less to transport and are effective at lower wash temperatures.

We can also make a difference by raising awareness among consumers. Ben & Jerry's has done so through its Lick Global Warming campaign in the U.S., the Climate Change College in the European Union, which completed its three-year program in 2008, and ice cream flavors such as Fossil Fuel and Baked Alaska.

We have long been involved in industry initiatives such as the International Association for Soaps, Detergents and Maintenance Products (AISE) 'Washright' initiative, which encourages consumers to wash clothes at lower temperatures.

Sourcing

We estimate that greenhouse gas emissions in the supply chain are approximately 10 times those in our own manufacturing impacts.

We are founding members of the Carbon Disclosure Project's Supply Chain Leadership Collaboration, which aims to increase disclosure of greenhouse gas emissions among suppliers. During 2008 we helped develop a supplier questionnaire and tested it with a selection of our suppliers.

Distribution

Although in most markets we do not own or operate any distribution vehicles ourselves, we estimate that the impact of transport and distribution of our products is around four million tons of CO2 a year. This results from our use of a complex network of distribution centers and road, rail and sea transport.

Working with customers and distributors, we are making a start on reducing our impacts through country and regional initiatives. For example, in the UK, Unilever and Tesco co-chaired the haulage element of an industry initiative to reduce transport impacts. By sharing vehicles and implementing more efficient warehousing, the initiative overall saved 53 million miles of travel, equivalent to removing 900 trucks from Britain's roads.

Carbon Disclosure Project (CDP)

Unilever participates in the annual survey conducted by the Carbon Disclosure Project, an independent not-for-profit organization. This initiative seeks information on behalf of 475 institutional investors with a combined asset base of $55 trillion on the risks and opportunities presented by climate change. The resulting Climate Leadership Index singles out companies that showed best practice in their reporting of greenhouse gas emissions and climate change strategies. We have been included in the Leadership Index since 2004. In 2008, with the introduction of a new methodology and scoring system, we scored 88% in the survey (CDP6), narrowly missing the 90% threshold for inclusion in the global Carbon Disclosure Leadership Index.

In 2008 the Carbon Disclosure Project extended its work with the CDP Supply Chain Project. Thirty-four member companies including Unilever nominated a selection of suppliers to receive a questionnaire on climate change. The findings were published in March 2009: 'Supply Chain Report 2009 : Shared value – Managing climate change in the supply chain'.