PRO!RESS REPORT 2012 UNILEVER SUSTAINABLE LIVIN! PLAN STRATE!Y In November 2010 we set out the Un!lever Susta!nable L!v!ng Plan (USLP), our bluepr!nt for ach!ev!ng our v!s!on to double the s!ze of the bus!ness wh!lst reduc!ng our env!ronmental footpr!nt and !ncreas!ng our pos!t!ve soc!al !mpact" ABOUT OUR REPORTIN! The Un!lever Susta!nable L!v!ng Plan" Progress Report 2012, publ!shed !n Apr!l 2013, !s complemented by" Boundar!es for report!ng • The onl!ne Un!lever Susta!nable L!v!ng Report for 2012" Our webs!te !s our pr!nc!pal means of report!ng" Th!s Progress Report 2012 covers Un!lever’s global It !ncludes more background to our progress on the USLP and the scope of our assurance programme operat!ons for the per!od 1 January-31 December as well as more deta!led !nformat!on on our approach to runn!ng a respons!ble bus!ness" It also conta!ns 2012 unless otherw!se stated" Data !s prov!ded for !nd!ces that cross reference our performance to the UN #lobal $ompact Pr!nc!ples, the M!llenn!um Un!lever’s wholly owned compan!es, subs!d!ar!es Development #oals and #lobal Report!ng In!t!at!ve !nd!cators" and key &o!nt ventures and l!sted ent!t!es where www#un!lever#com/susta!nable-l!v!ng we have a ma&or!ty ownersh!p" • Un!lever’s Annual Report and Accounts 2012% Mak!ng Susta!nable L!v!ng $ommonplace, wh!ch outl!nes The Un!lever Susta!nable L!v!ng Plan !s our bus!ness and f!nanc!al performance !nclud!ng key f!nanc!al and non-f!nanc!al performance !nd!cators" !ndependently assured" Further !nformat!on www#un!lever#com/!nvestorrelat!ons on our approach to assurance can be found on page 52" STRATE!Y OUR "HAN!IN! WORLD THE "ONTEXT OUR RESPONSE The Un!lever Susta!nable L!v!ng 9 b#ll#on Plan !s our strateg!c response to People expected on the planet by 2050! populat"on "s grow"ng by 200,000 a day the unprecedented challenges the world faces" It !s at the heart of our $ompass strategy wh!ch sets out 200 m#ll#on our amb!t!ous v!s!on and purpose" Unemployed today! 600 m"ll"on #obs need to be created over the next decade 2 m#ll#on $h"ldren d"e every year from d"arrhoea OUR PURPOSE and pneumon"a TO MAKE SUSTAINABLE "l#mate change LIVIN# $OMMONPLA$E Is accelerat"ng towards a temperature r"se greater than 2 degrees We work to create a better future every day, w!th brands and serv!ces that help people feel good, look good and get more out of l!fe" Two-th#rds Our f!rst pr!or!ty !s to our consumers – then Of the world could be l"v"ng "n customers, employees, suppl!ers and water-stressed cond"t"ons by 2025 commun!t!es" When we fulf!l our respons!b!l!t!es to them, we bel!eve that our shareholders w!ll 40% be rewarded" Of the world’s agr"cultural land "s ser"ously degraded 40% r#se In food pr"ces expected 2010-20 1 #n 10 Of the adult populat"on "s obese wh"le almost 1 b"ll"on people go hungry Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Our "hang#ng World 1 "HIEF EXE"UTIVE OFFI"ER’S REVIEW VOLATILITY AND UN"ERTAINTY As the th!nk!ng becomes embedded !n $ THE NEW NORMAL our bus!ness, there !s !ncreas!ng ev!dence 2012 proved to be another challeng!ng that !t !s accelerat!ng our growth !n ways year for the global economy# $ommod!ty that contr!bute to pos!t!ve change !n markets rema!ned volat!le and costs rose people’s l!ves" s!gn!f!cantly !n excess of expectat!ons# The threat of the world’s largest economy STRON! BUSINESS PERFORMAN"E go!ng over a ‘f!scal cl!ff’ and the euro cr!s!s Un!lever performed well !n 2012, desp!te added uncerta!nty and underm!ned frag!le d!ff!cult econom!c cond!t!ons" consumer conf!dence# Turnover !ncreased by 10"5%, tak!ng Overall we cont!nue to see slugg!sh growth Un!lever through the (50 b!ll!on barr!er, !n most developed markets contrasted by a s!gn!f!cant m!lestone to becom!ng an relat!vely healthy consumpt!on and growth (80 b!ll!on company" Emerg!ng markets !n asp!r!ng markets" These both have grew for the second consecut!ve year by consequences !n terms of the world’s more than 11% and now account for 55% soc!al and env!ronmental equ!l!br!um" of total bus!ness" Personal $are and Home $are showed double-d!g!t growth, Inequal!ty and r!s!ng levels of unemployment !n l!ne w!th our strateg!c pr!or!t!es" – espec!ally among young people – place added stra!ns on soc!al cohes!on" But the UNILEVER SUSTAINABLE LIVIN! PLAN b!ggest challenge !s the cont!nu!ng threat to The Un!lever Susta!nable L!v!ng Plan ‘planetary boundar!es’, result!ng !n extreme (USLP) !nsp!res us to grow !n l!ne w!th our weather patterns and grow!ng resource new purpose to make susta!nable l!v!ng constra!nts" These have an !ncreas!ng commonplace" The lens of susta!nable !mpact on people’s l!ves" l!v!ng !s help!ng us to dr!ve brands that have Put s!mply, we cannot thr!ve as a bus!ness a strong purpose !n people’s l!ves, to reduce !n a world where too many people are costs and take waste out of the system and st!ll excluded, marg!nal!sed or penal!sed to dr!ve !nnovat!on that w!ll make a pos!t!ve through global econom!c act!v!ty' where d!fference to the env!ronmental and soc!al nearly 1 b!ll!on go to bed hungry every n!ght, challenges fac!ng us all" The Plan pushes 2"8 b!ll!on are short of water and !ncreas!ng us to th!nk ahead, reduc!ng r!sk and numbers of people are excluded from the mak!ng the bus!ness more res!l!ent for opportun!ty to work" the long term" In 2012 we cont!nued to make good progress OUR VISION FOR !ROWTH del!ver!ng the Plan’s comm!tments" We rema!n conv!nced that bus!nesses that Our factor!es made great str!des !n cutt!ng address both the d!rect concerns of c!t!zens energy, water and waste" For example all and the needs of the env!ronment w!ll our US operat!ons have moved to purchas!ng prosper over the long term" We need to the!r energy from cert!f!ed, renewable bu!ld new bus!ness models that enable sources and more than half our s!tes respons!ble, equ!table growth that !s worldw!de have ach!eved zero non- decoupled from env!ronmental !mpact" hazardous waste to landf!ll" Th!s th!nk!ng l!es at the heart of the Un!lever What makes our comm!tment un!que Susta!nable L!v!ng Plan and our $ompass !s that !t !s across the total value cha!n" v!s!on of doubl!ng the s!ze of the bus!ness We are not only manag!ng our own and wh!lst reduc!ng our env!ronmental footpr!nt upstream operat!ons, but we are also and !ncreas!ng our pos!t!ve soc!al !mpact" determ!ned to help people to l!ve more To ach!eve our v!s!on, we have set clear susta!nably through the !mpact of our goals to halve the env!ronmental footpr!nt products !n the!r l!ves" of our products, to help more than 1 b!ll!on We have ma!nta!ned the momentum people take act!on to !mprove the!r health towards our target of sourc!ng all our and well-be!ng, to source 100% of our agr!cultural raw mater!als susta!nably, agr!cultural raw mater!als susta!nably and reach!ng 36% by the end of 2012" All our to enhance the l!vel!hoods of people across palm o!l !s now covered by #reenPalm our value cha!n" cert!f!cates" We have made a start !n buy!ng 2 "h#ef Execut#ve Off#cer’s Rev#ew Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 STRATE!Y THE UNILEVER SUSTAINABLE LIVIN! PLAN Our Plan has three b!g goals to ach!eve by 2020% • Help more than 1 b!ll!on people !mprove • Source 100% of our agr!cultural raw the!r health and well-be!ng" mater!als susta!nably and enhance the l!vel!hoods of people across our • Halve the env!ronmental footpr!nt of value cha!n" our products" traceable o!l" Investment !n a new palm o!l Through work!ng w!th Oxfam on a study Th!s !s why we are work!ng w!th organ!sat!ons process!ng factory !n Indones!a, work!ng of our bus!ness !n V!etnam over 2011-12 we and !n!t!at!ves such as the $onsumer #oods w!th partners and other !n!t!at!ves are all have ga!ned !mportant !ns!ghts !nto human Forum, the World Bus!ness $ounc!l for help!ng us to make progress towards our and labour r!ghts !n our own and our Susta!nable Development, the World new comm!tment to 100% cert!f!ed suppl!ers’ operat!ons" The study has Econom!c Forum, the Trop!cal Forest All!ance susta!nable palm o!l wh!ch !s traceable !mpl!cat!ons for our global bus!ness" 2020, Refr!gerants, Naturally), the #lobal back to the plantat!ons on wh!ch !t !s grown" We are !dent!fy!ng how we can promote #reen #rowth Forum and the UN’s Zero susta!nable l!vel!hoods for all our workers Hunger $hallenge and Scal!ng Up Nutr!t!on We are also help!ng to !mprove the and those !n our value cha!ns" !n!t!at!ves" Th!s !s also why I agreed to &o!n l!vel!hoods of farmers wh!le guarantee!ng the UN Secretary #eneral’s H!gh Level Panel future suppl!es, and we w!ll !ncreas!ngly In areas where b!g breakthroughs are to rev!ew the Post-2015 Development Agenda" place a spec!al focus on women, due to the needed, we must step up &o!nt work!ng w!th mult!pl!er effect we know that women have others" Mak!ng more progress on healthy LOOKIN! AHEAD !n develop!ng soc!et!es" We are work!ng w!th eat!ng, for example, w!ll requ!re act!on Desp!te the scale of the task, I bel!eve many partners, !nclud!ng w!th Ra!nforest across the !ndustry wh!lst governments we are on track to become a susta!nable All!ance on tea for L!pton, w!th Barry w!ll need to take a b!gger lead on act!on to growth company" But one th!ng !s sure $allebaut on cocoa for Magnum and w!th combat cl!mate change and decarbon!se – th!s w!ll not be poss!ble w!thout the vegetable farmers through Knorr’s energy suppl!es" ded!cat!on and hard work of our 173,000 Susta!nab!l!ty Partnersh!p Fund" Overall !t !s clear that we w!ll need creat!ve colleagues and our many partners around Brands that are start!ng to put the!r as well as