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3 Sustainable Supply Chain Tips We Learned From Unilever

Michael Wilson | Dec 17, 2015

Everybody is talking about sustainability these days, but some companies are already doing it – and doing it well. One of those companies is Unilever, which owns many of the ...

Unilever-sustainable-supply-chainEverybody is talking about sustainability these days, but some companies are already doing it – and doing it well. One of those companies is Unilever, which owns many of the world’s leading consumer brands: Lifebuoy soap, Surf detergent, Knorr foods, and Lipton teas, for example. Unilever valued a sustainable supply chain long before the rest of the world caught on – as far back as the early 1900’s, Unilever prioritized providing food and hygiene to developing countries – but the company doubled down in 2010, launching the Unilever Sustainable Living Plan, with the goals of: 

  • Helping more than one billion people improve their own health and well-being
  • Halving the environmental footprint associated with their products
  • Achieving 100% green procurement of all agricultural products

In just a few years, Unilever has worked with its business partners and stakeholders in sending zero waste to landfills at the global level. Other sustainable supply chain accomplishments include:

  • The company has achieved a CO2 reduction of one million tons, for a savings of $267 million.
  • 64% of all palm oil used in their manufacturing processes is obtained via green procurement.
  • 100% of the electricity the company purchases in Europe is from a sustainable source. 

Those are some pretty impressive achievements, and the rest of us can learn a lot from how Unilever did it.

1. “Tyranny of the Urgent” Syndrome

Unilever leaders realized that what gets measured and rewarded is what gets done. They realized that, if sustainable supply chain and green procurement efforts were relegated to “when you have time” status, they would never happen.

The Takeaway: If you’re serious about sustainability, that has to be reflected in your measurement and compensation plans. The specific objectives can vary depending on position and area of responsibility, but all members of management need to be held accountable for their sustainability goals. Making sustainability, a business objective guarantees that it will be an area of focus no matter what else is going on with the business.

2. Lack of Upstream Control 

Leadership at Unilever realized quickly that a large part of their environmental footprint was out of their direct control, so they made supplier partnerships a priority. Some of those initiatives included:

  • Working with the Dutch Sustainable Tea Initiative to help over 180,000 small farms improve their practices, with the goal of achieving Rainforest Alliance certification
  • Working with suppliers in Kenya to train farmers in sustainable tea cultivation
  • Developing the Cool Farm Tool – a greenhouse gas calculator that helps farmers figure out the best way to reduce their emissions – and making it available at no charge via open source technology

The Takeaway: You can only do so much by yourself, and unless your organization has enough clout to insist that your supply chain partners get on board, you’re going to have to persuade them. The best way to do that is to make sustainability a “win-win” for all stakeholders and to make it as easy as possible for them to comply. And be creative -- take the time to understand what’s holding your partners back from achieving sustainability, and come up with ways (like the Cool Farm Tool) to remove those obstacles.

3. Lack of Downstream Control

Getting suppliers on board was a big job, but changing the way Unilever products are used downstream was an even bigger challenge. Unilever started by identifying “five levers of change”: make it understood, make it easy, make it desirable, make it rewarding, and make it a habit. That was a great start, but company leadership realized that they would need help from downstream partners to put those five levers into action. Initiatives include:

  • In the U.S., partnering with Walmart to use the Suave shampoo brand to encourage consumers to save water.
  • In the U.K., partnering with Tesco to launch “A Better Future Starts at Home,” a four-week promotion encouraging consumers to shop and live more sustainably.

The Takeaway: The sustainability movement has gained enough momentum that, with careful communication, you have a very good chance of being able to influence consumer behavior. The critical steps, as with your upstream partners, is to show consumers a clear benefit (even if that benefit is simply feeling better about themselves and their carbon footprints) and to make it easy, requiring little, if any, extra effort. It can also be extremely beneficial to enlist the help of downstream partners like retailers.

There are some important sustainable supply chain lessons we can learn from Unilever’s success. The first is to make it a priority: Measure it, and tie it to compensation. Otherwise, it will fall off the radar screen in the chaos of day-to-day business. The second is to think beyond your own walls to your broader circle of influence. By aligning with partners both up- and downstream, you can make a measurable difference in the world.

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