Sustainable Development Report 2006 CHAIRMAN’S INTRODUCTION ECO-EFFICIENCY PERFORMANCE
EFRAC REVIEW PERFORMANCE (see page 26). We do not collect data from validation of site-level data and deliver the unilever’s mission is to add vitality to life. these charts show the eco-effciency performance of our third-party companies that manufacture collated worldwide data faster and more or pack our products (these account for transparently. in 2005 we piloted the system manufacturing sites over the past 12 years, and set out our targets approximately 15% of production). in three regions (approximately 60 sites) and We meet everyday needs for nutrition, Sunlight soap and Blue Band margarine: during 2006 rolled it out to all sites.
hygiene and personal care with brands that they built businesses with strong values and Our Vitality Mission and Corporate towards 2011. We also explain in brief our progress in 2006. Quality of data 100% of sites reported environmental data help people feel good, look good and get a mission to act as agents of social change. Purpose with 98.4% of sites reporting on all key more out of life. Our mission is to add Vitality to life. We meet We have continued to improve our global sustainable development has become everyday needs for nutrition, hygiene and Scope of data in unilever, 25 sites were closed or sold environmental prosecutions and resulting system for the management and reporting environmental parameters. Our aspiration is to meet these needs in a the overarching goal for business and personal care with brands that help people • web links and did not submit any data. a further two fnes, including from our corporate head of environmental performance data through the defnitions and basis of reporting of the sustainable way. at the heart of our government. it demands that we meet feel good, look good and get more out of life. in 2006, 317 sites in 70 countries reported sites consolidated into one combined site offces and research laboratories, which the development of a web-based system. l Key Performance Indicators Our deep roots in local cultures and markets environmental performance data. Of these indicators shown on these pages is described corporate purpose is the drive to grow the needs of society today without for their reporting. We also collect data on together represent an additional eight sites this will help improve the management and around the world give us our strong six sites were new reporters. Due to changes on our website under Data parameters. l Data parameters sustainably and in this way create long- compromising the ability of future relationship with consumers and are the term value for all those with a stake in the generations to survive and prosper. foundation for our future growth. We business. will bring our wealth of knowledge and a commitment to sustainable development international expertise to the service of local Our efforts are guided by our code of and responsible business practice is consumers – a truly multi-local multinational. COD (chemical oxygen demand) Water Hazardous waste Non-hazardous waste Business principles which sets the standards embedded in our mission and principles. Our long-term success requires a total kg/tOnne OF prODuctiOn m3/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn commitment to exceptional standards of of behaviour we demand from all our in practice this means understanding the tOtaL cOD Leaving the sites estimateD cOD tO the aqueOus envirOnment performance and productivity, to working 9 23.61 0.98
7.95 25 employees. it also outlines our commitments impact we have as a business on society, together effectively, and to a willingness to 0.96 3.94 1.0 8 7.26 to our stakeholders including consumers, not only in how we run our own operations, embrace new ideas and learn continuously. 44 3.65 6.79 3.23 To succeed also requires, we believe, the TARGETS 7 6.54 20 customers, suppliers, employees, but also in sourcing our raw materials and, 1995 17.58 17.46 1995 2.96 1997 0.69
0.8 1996 6.06 2.79
highest standards of corporate behaviour 0.66 3 TARGETS
communities and the environment. crucially, through our brands. 1996
3 2.50 14.86 5.43 6 0.62
towards everyone we work with, the 2.31 2.33 1997 5.04
2.10 15 TARGETS 0.55 0.55 TARGETS 13.00 communities we touch, and the environment 1998
1.89 0.6 12.00 1996 0.50 0.50
values-led brands will increasingly drive our 1997 1.80 1.75
5 4.29 1999 11.26 2 1995
on which we have an impact. 0.44
2 9.88 9.65 Our sustainability journey 1998 3.73 9.35 0.40 3.67 1.32 0.39
business strategy. We are now integrating 2000 1.30 1999 1998 3.52 8.35
3.29 10
1.05 4 This is our road to sustainable, proftable 2001 7.07 2003
0.4 1999 2002 0.86 social, economic and environmental 0.88 0.78
Over 100 years ago, William hesketh Lever 2000 2001 growth, creating long-term value for our 1 2000 2001 0.54 2006 1.72
1 2002 0.48 3 0.41 considerations into our brand innovation 2004 2007 1.50 shareholders, our people, and our business 2003 2002 0.28 0.24 2003 and samuel van den Bergh did not just 0.25 2004
2005 5 2004 2007 0.39 2006 1995 1996 2011 1.38 2005 2005 2006 3.43 0.2 2006 partners. 1997 2006 0.33 2006 7.57 2007 3.14
and product development. 2011 0.33 create the world’s frst consumer brands, 2 2006 1998 1999
0 2007 6.55 2000 0 2011 2.98 2001 2011 5.78 2002 2003 2004 2005 Governance 2006 Despite an increase in the number of product variants on many of our in 2006, we achieved a 2.5% reduction in total hazardous waste per in 2006, we achieved a 15.3% reduction in load per tonne of production in this way, we have built strong in 2006, the total cOD load and load per tonne of production increased lines, requiring more frequent cleaning and changeovers, we achieved a tonne of production and a 0.8% reduction in absolute load, but missed and a 13.5% reduction in absolute load, signifcantly exceeding our target in 2006 we strengthened our governance foundations to fulfl our vitality mission slightly and we did not meet our target. this was due in part to an increased 6.5% reduction in water per tonne of production and a 4.8% reduction our ambitious target reduction of 15.9%. a few sites reported the disposal for the second year running. many of our sites have found innovative in this area. the Board member with and our commitment to sustainable number of product variants, requiring more frequent changeovers and in total consumption, exceeding our target. this was largely due to water of a backlog of hazardous wastes during 2006 as well as waste product recycling routes for their waste streams, including energy recovery, responsibility for delivering our development. cleaning of our production lines. the amount of cOD sent to the aqueous recycling and conservation efforts and improved processing. We also that could not be reworked into our processes. many sites performed well, composting and brick manufacturing. seven sites reduced their non- environment, however, continues to decrease. 97% of the total cOD benefted from further restructuring in our supply chain. 15 of our sites however, and fve sites managed to reduce their hazardous waste by more hazardous waste by more than 1,000 tonnes, and a further six sites by commitments is our president of home and unilever is fortunate to have found michael leaving our sites is subsequently treated in municipal works. We estimate reduced their water consumption by more than 100,000m3 and a further than 100 tonnes, three of which are involved in our triple r project (see more than 500 tonnes. in 2006, 83.3% of our total waste (non-hazardous personal care. he is a member of our Board’s treschow as my successor, who i know has a that 89.4% of this cOD is removed, so the cOD reaching the aqueous 7 sites by 50,000m3 or more. page 15). and hazardous) was sent for recycling. corporate responsibility and reputation keen interest in sustainability. i am proud to environment is signifcantly less than the total cOD leaving our sites. committee which provides oversight and have served this great company over the last guidance on unilever’s environmental and 35 years and am sure it will continue very social impacts and policies. successfully into the future. Energy CO2 from energy Boiler/Utilities SOx Ozone-depleting potential he also chairs our corporate responsibility gJ/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn council, which includes senior executives
from across the business. the council and 0.8 0.00025 0.71 2.92 0.00023 247.35 0.68 2.83 committee beneft from the input of a 3 242.91
2.69 250 0.59 2.57
0.55 TARGETS 0.00020
panel of external specialists in corporate 226.17 0.6
2.40 TARGETS 1996 1995
1995 0.00020 1995 217.23 0.45 2.27 1996 2004 responsibility. Chairman 1996
Antony Burgmans 0.42 2.19 2.15 1997 208.14 2.06 2.06 1997 0.34 1998 0.00016 0.4 0.00016
TARGETS 1998 1.92 2003 0.29 197.91 198.59 1997 1.82 195.17 1999 0.24 191.46
2 0.00014 0.23 1999
200 0.21 1998 2000 0.00013 185.67 0.18 0.00015 2000 2001 2002 1999 2003 2004 0.2 0.00012 2001 171.75 2001 2000 2005 2000 2001 2002 2006 1.87 164.59 2006 2002 2003 2003 2007 1.75 2004 2002 2005 2006 0.20 2004
Making progress on 2006 2011 1.64 2007 0.17
0.00010 2005 0 2011 0.16
CONTENTS 2006
1 2005 1995 NO DATA 150 1996 NO DATA 1997 NO DATA 1998 NO DATA 1999 NO DATA 2006 166.60 the big issues 2006 2007 155.43 in 2006, we achieved our target with a 5.2% reduction in unit energy We achieved a 4.2% reduction in load of cO2 from energy in 2006 we reduced the sOx emissions from our boiler and utility We measure the amount of ozone-depleting gases (cFcs, hcFcs and This report deals with the operations of chairman’s nutritiOn 8 integrating 2011 145.68 load and a 3.4% reduction in absolute energy use. this was partly per tonne of production and a 2.4% reduction in absolute load, operations by just under 13% in load per tonne of production and 11.4% mixtures) in refrigeration, air conditioning and other applications at our the Unilever Group (Unilever PLC and intrODuctiOn sustainaBiLity 12 hygiene 10 due to regional energy effciency and awareness programmes, process meeting our 2006 target. energy sources account for over 94% of our in absolute load, so comfortably exceeding our target. this was in part due sites, and assess the losses each year. the emissions are expressed as kg Unilever NV, together with their group grOup chieF WiDer modifcations and improved reporting. 12 sites reduced their energy use greenhouse gas emissions from our manufacturing sites. Of the total to improved effciency of our boilers, installation of sOx treatment systems cFc-11 equivalent. in 2006, the amount of ozone-depleting potential companies) and focuses on activities in executive’s repOrt 1 envirOnmentaL by more than 50,000gJ, and a further 41 sites reduced theirs by more energy used by our sites, 14.8% comes from renewable sources, of which and the use of lower sulphur fuels. We have benefted from a more stable decreased slightly compared with 2005 and 65 sites reduced their ozone- FOOtprint 14 2006, with some updates in early 2007. aBOut uniLever 2 than 10,000gJ. 8.2% comes from our own site initiatives, and the remaining 6.6% is supply of energy from the grid in india, and the outsourcing of boiler depleting potential by more than 50%. cLimate change 16 from national electricity grids. the majority of our site initiatives are in operations at some sites. Our impacts 4 developing countries and include the burning of waste materials and fuel creating anD strategy anD crops in our boilers. management 6 sharing WeaLth 18 30 31 UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr GROUP CHIEF EXECUTIVE’S REPORT
This report provides an update on the progress we are making
to fulfl our ambition to be a respected corporate citizen and to contribute to addressing global sustainability challenges.
Last year was again a demanding one for Successful brands of the future will be those n continued investment to make a real Unilever as we continued to make changes that both satisfy the functional needs of difference in the communities where to our structure and operations in an effort consumers and address their concerns as we operate, such as through our to become more competitive and put us citizens – concerns about the environment handwashing and hygiene education frmly on the road to sustained growth and social justice. During 2006 we piloted initiatives in India. – something we succeeded in doing. a new ‘brand imprint’ methodology to help We are on a journey to integrate social us in this. and environmental considerations more Sustainable development In developing and emerging markets and more into our day-to-day business In our 2005 report I gave the commitment – already more than 40% of Unilever’s operations. That is the only way to build a that improved business performance would business – many millions of people on very sustainable business in a sustainable world. not be at the expense of our environmental low incomes have the same aspiration for We have much to learn, so please tell us and social goals. In fact, as we come high-quality brands. Meeting these needs what you think. I welcome your feedback. to understand better what sustainable will require a new approach to delivering development means for Unilever, we are affordable products, and a commitment to Finally, a personal note increasingly fnding it offers the key to our ‘social innovation’ – such as reduced water Unilever Chairman Antony Burgmans retires future prosperity. for laundry detergents or added nutrients for health in foods. in 2007 after 35 years with the company. I want to pay tribute to Antony’s Our progress contribution to the business and to his deep personal commitment to environmental In Unilever we recognise we still have issues. He was the driving force behind much to learn about how to meet these the creation of the Marine Stewardship needs, in a way that is both economically Council and twice chaired the CEO Panel at viable and yet does not compromise future the World Water Forum. Few international generations. In this report we highlight the business leaders have done more for the progress we are making, including: cause of sustainability – a cause that n further steps in addressing growing I know he will continue to champion in societal concerns about health, his retirement. particularly obesity and poor hygiene;
n a new focus on climate change, with a programme to reduce still further greenhouse gases across the full range of our activities;
n sustained effort to improve eco-effciency in manufacturing and to ensure the safety
of our employees at work; Patrick Cescau Group Chief Executive
Performance review
COnSUMErS 20 COMMITMEnTS, www.unilever.com/ourvalues/
PrOgrESS, PLAnS 27 • environmentandsociety CUSTOMErS 21 ASSUrAnCE 28 l This report is an overview. EMPLOyEES 22 AWArDS AnD Our website is our principal SUPPLIErS 23 means of reporting: it sets rECOgnITIOn 29 CIvIC EngAgEMEnT 24 out our approach and policy ECO-EFFICIEnCy on the issues we explore COMMUnITIES 25 PErFOrMAnCE 30 here, with additional case ECO-EFFICIEnCy 26 studies and more detailed performance data. 1 ABOUT UNILEVER 160 million times a day, someone, somewhere in the world will choose a Unilever brand.
Unilever is one of the world’s leading about 50 more. With consumers, employees, Europe consumer goods companies with a business partners and shareholders on portfolio of around 400 food and home every continent, we describe ourselves as Operating proft (millions) and personal care brands and a turnover of a ‘multi-local’ multinational, bringing our E €40 billion. We have operations in around international expertise to the service of 1,903 100 countries and our products are sold in people everywhere. Turnover (millions) E15,000 Purchases of goods and services (millions) E10,034 Employees (thousands, average) 47,000 The Americas
Operating proft (millions) E2,178 Turnover (millions) E13,779 Purchases of goods and Manufacturing sites services (millions) E9,803 81 Employees (thousands, average) 46,000
Our E1 billion global brands We have 12 global brands, each achieving sales of over E1 billion a year: Knorr, Lux, Surf, Hellmann’s/Calvé, Omo (Rinso), Lipton, Sunsilk, Dove, Rama, Flora/Becel, Heartbrand ice creams (Cornetto) and Rexona.
Other global brands These brands are enjoyed by millions of people: Radiant (Rin), Bertolli, Axe, Lifebuoy, Slim•Fast, Domestos, Comfort, Signal (Pepsodent), Vaseline, Cif and Pond’s.
2 UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 3
26 26
sites
Manufacturing 48 24 25 Employees Operating proft (millions) E1,327 (millions) Turnover E10,863 Purchases of goods and services (millions) E8,335 Employees (thousands, average) 96,000 51 Asia Africa 36 35 and services
29
Purchase of goods Purchase
Manufacturing sites 153 38 35 Turnover Turnover 27 Asia Africa Local favourites Some of our brands are national favourites found in only a few countries, such as: Bango, Breyers, Marmite, Hertog, Fair & Lovely, Andrélon, . all and PG Tips n 35 The Americas profit profit n 40 Operating 25 Europe Europe n Overview 2006 Overview % By rEgIOn Manufacturing sites 83 OUR IMPACTS Our business and brands have impacts at every stage of their life-cycle: from sourcing raw materials for our products, all the way through to when our consumers use and dispose of them.
Understanding consumer needs
We seek to meet the everyday needs for nutrition, hygiene and personal care of consumers around the world, helping them feel good, look good and get more out of life.
The social, economic and environmental issues we seek to address:
n Making quality products that n Understanding the are safe to use environmental constraints n Making products affordable within which consumers and accessible to consumers use our products, such as (through multiple price points) water scarcity 400 brands E906 million Innovation, R&D invested in r&D Over Through our investment in research and development, we aim to meet diverse and changing consumer 6,000 needs in all our markets. scientists and product developers
The social, economic and environmental issues we seek to address:
n Maximising the nutritional quality of our food products n Minimising the adverse environmental E15.7 billion impacts of our products spent with n Minimising the use of animal testing suppliers of n Working collaboratively and sharing raw materials knowledge with partners around the 8,430 and packaging world, including universities Over 2 of our raw materials /3 come from agriculture Suppliers
Through our purchase of goods and services, we create wealth and seek to encourage sustainability practices throughout our supply chain. As part of this, our long-term goal is to source all our key agricultural raw materials from sustainable sources.
The social, economic and environmental issues we seek to address:
n Ensuring fair working n Fostering good sustainability conditions in the supply chain practices in the sourcing of and respect for human rights raw materials n Ensuring suppliers meet KEY: Level of Unilever’s control minimum standards on health, and infuence safety and environmental protection We have control We have control/infuence
4 UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr
Marketing, consumption and disposal
We communicate responsibly with our consumers through our advertising and marketing. We seek to minimise the impacts of our products during and after consumer use.
The social, economic and environmental issues we seek to address:
n Taking a responsible approach to n Helping consumers to minimise marketing and advertising their environmental impacts, eg by using less water for laundry, n Helping consumers make and to dispose of our products healthier choices in their diet responsibly n Working to ensure consumer confdence in chemicals used in home and personal care products
E39.6 billion turnover E5.2 billion invested in advertising and promotions Distribution and retail
Our aim is to be the supplier of choice for our customers and to ensure that consumers have ready access to our Products sold in around products through different distribution channels. countries 150 Around The social, economic and environmental 1 issues we seek to address: /5 of sales through ten retailers n Working in partnership with retailers and distributors to educate and inform consumers on health and 179,000 sustainability issues employees at year end n Reducing energy consumption and greenhouse gas emissions resulting 317 from distribution of our products manufacturing sites across six continents n Ensuring accessibility of our products, especially for low-income consumers n Using and promoting environmentally friendly refrigeration technology
Production/manufacturing
We seek to manage the impacts of our operations on society and the environment.
The social, economic and environmental issues we seek to address:
n Ensuring the health n Investing in local n Maximising the and safety of employees communities and eco-effciency of at work contributing to local manufacturing sites economic development by reducing impacts such n Respecting employees’ as waste, water, energy fundamental rights and use and greenhouse encouraging personal gas emissions development
5 STRATEGY AND MANAGEMENT To fulfl our commitments, we have a strategy in place supported by company-wide governance and management structures.
Strategy Our principal partnerships are: Implementation
We have long been working to improve UNICEF: to combat child To implement our strategy we have a series our understanding and management of mortality through nutrition of management structures in place. The the social, economic and environmental and hygiene initiatives; most important of these are: impacts of our business. Some of our recent UN World Food Safety and Environmental Assurance milestones are set out in the timeline below. Programme: to feed Centre (SEAC) In 2005, the Unilever Executive reaffrmed hungry children and SEAC’s role is to provide Unilever with the our corporate responsibility strategy. This improve their nutrition; skills, advice and guidance needed to set out a commitment to maintain and reduce, manage and control any safety risks World Heart Federation: build on our existing activities including our for consumers, employees and the to promote heart health; work in sustainable sourcing, supply-chain environment. Before launch, new standards, eco-effciency, employee well- FDI World Dental ingredients, product formulations and being and community engagement. Federation: to improve process designs must be submitted to SEAC oral health. for approval. SEAC’s expertise guides our As values-led brands will increasingly drive work on life-cycle analysis, eco-effciency our business, another element of the management and occupational safety. strategy is to integrate social, economic Governance and environmental considerations into the Over the past two years we have Unilever Food and Health Research development plans of our brands. This goes strengthened our governance in this area. Institute further than the life-cycle assessment work Around 450 scientifc staff work on the Our Board-level Corporate responsibility we have been doing over many years to development of new products and and reputation Committee meets quarterly, reduce the wider environmental footprint of processes and continuously improve the and our Corporate responsibility Council, our products. In 2006 we began mapping nutritional quality of our products, often in comprising senior executives from across the ‘imprint’ of some of our global brands. conjunction with external partners. The the business, reviews our activities and Institute shares and discusses our research At the same time, to underpin our activities aligns our strategy with business priorities. widely, through publication in journals and and achieve more effective solutions, we Both groups beneft from the insights of an annual symposium involving external decided to focus our external partnerships the Unilever Sustainable Development scientifc experts. on two vitality themes, nutrition and Panel, fve external specialists in corporate hygiene, where we can make the most responsibility and sustainability who meet impact. twice a year with those leading different aspects of our strategy.
1995 1996 1998 2000 Sustainable Fish sustainability initiative First agricultural Sustainable Agriculture Agriculture sets long-term goal of pilot project Advisory Board Initiative begins sustainable sourcing begins established Marine Stewardship Shakti launched in India Council co-founded First social report with WWF published First environmental report published containing eco-effciency indicators
1995 1996 1997 1998 1999 2000
6 UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 7
2006 Brand imprint methodology piloted Choices nutrition labelling launched Shakti reaches 100,000 villages 30,000 through entrepreneurs Lifebuoy Swasthya Chetna handwashing campaign reaches 80 million people
web links Strategy and management Global Reporting Initiative index
l l In 2006 we asked Deloitte to provide an In 2006 we asked Deloitte to provide against independent view of our report these criteria. Their statement is on page 28. Materiality, completeness and completeness Materiality, responsiveness our us is the way we fulfl ‘Material’ for our contributions Vitality mission through hygiene; the to health, nutrition and and the sustainability of our business; seek to improve We wealth that it creates. and their of material issues our reporting performance. impact on our business ‘completeness’ we take into ensure To society and the account our impacts on do this concerns To of stakeholders. detailed mapping and tracking requires input and of issues; ongoing stakeholder of partners to feedback; and the help The issues material guide our direction. and we often complex to our business are where continue to work on those areas we do not yet have a comprehensive understanding of our impacts. company As a consumer-focused is built into our everyday ‘responsiveness’ to understanding and responding approach to our consumers’ aspirations and concerns. integration of social, It is by greater concerns economic and environmental business that we will ensure our across our success, and also improve our future to stakeholders. reporting •
2005 nutrition Enhancement begins Programme 56% of our fsh from used in Europe sustainable sources Joint research published with Oxfam on the links between and wealth creation poverty reduction
2003 Business Partner Code introduced good Agricultural Practice guidelines published for all key crops roundtable on Sustainable Palm Oil established In compiling this report, we have reviewed we have reviewed In compiling this report, to and referred sustainability reporting external such as the global standards reporting Initiative guidelines 2002. We have followed the AccountAbility 1000 ‘inclusivity’ practice of Assurance Standard’s and have used its principles of materiality, to help completeness and responsiveness our stakeholders assess our performance (see panel). Our report is addressed to a range of is addressed Our report and potential stakeholders: current governmentsemployees, our partners, and specialist external well audiences as consumers and investors. as interested of our Embedded in the development perspectives of the the are reporting Unilever Sustainable Development Panel broaden and specialist opinion formers. To using our we are access to our report, website as our principal means of reporting. Reporting strategy Reporting the values and on is to report Our approach out in our vitality we have set standards Purpose and our mission, our Corporate These are Code of Business Principles. principles by which we expect the core to be judged.
2002 Code of Business Principles revised Lifebuoy Swasthya Chetna handwashing campaign launched in India
The Steering group is responsible for is responsible The Steering group Agriculture managing our Sustainable is to promote Initiative. Its objective sustainable supply chains worldwide, focusing on long-term, sustainable access to group The Steering key crops. Unilever’s the input of the also benefts from Advisory Board Sustainable Agriculture which consists of external experts. Our greenhouse gases Working group and group gases Working Our greenhouse two are the Unilever Packaging group examples of how teams come current together to work on specifc issues. These engage with externalgroups stakeholders. Other programmes Other programmes Sustainable Agriculture Steering Group Steering Group Sustainable Agriculture Global Health through Hygiene through Global Health Programme is to co-ordinate this programme The aim of make a measurable to efforts Unilever’s and hygiene of contribution to the health practical, the world through people around The community-based initiatives. takes successful initiatives from programme and tailors them to one brand or country hygiene needs elsewhere. consumer address
2001 2002 2003 2004 2005 2006
activ mini-drinks and yoghurts; •
Rama and Blue Band margarines to 33% saturated fat reformulated or lower in Europe. in An average of 10% reduction Knorr dry soups in Europe; in Lipton side dishes 10% reduction in the US. up to 20% reduction in added sugar up to 20% reduction range of in some of our children’s products; water-ice in Flora/Becel 40% reduction pro in in our soya and 22% reduction fruit drink, AdeS, in Argentina, Uruguay and Paraguay. Our portfolio of savoury products, such as soups and sauces, is now Europe; in fats trans from free virtually 10% reduction in European Lipton in European 10% reduction teas; ready-to-drink
n Salt n n n n n Fat n Sugar n
From this review process, we found that process, this review From in line with are of our products over a third internationally accepted dietary guidelines for fat, sugar and salt, qualifying them for the Choices stamp (see opposite). The nutrition Enhancement Programme to help us to is a continuing process our across make further improvements portfolio (see panel, right, for 2005–2006 achievements) and enable us to respond as consumer needs change and new nutritional technologies for improving quality develop. Nutrition Enhancement Programme Nutrition Enhancement Programme levels of continue to work to reduce We trans fat, saturated fat, salt and sugar our nutrition through in our products do this by We Enhancement Programme. using benchmarks assessing our products based on international dietary guidelines. Over the past two years we have the vast majority of our product reviewed formulations, including nearly all our than half our and more products retail foodservice products. -
and developing new products through through and developing new products innovation. enhancing nutrition labelling and consumer information; increasing seeking improvements in the nutritional seeking improvements quality of our brands;
We recognise that working in partnership recognise We with governments, communities and non organisations is essential to delivering proft these commitments. n n n In 2004 we stepped up our activities in a public commitment to nutrition through to help individuals an action programme make healthier choices by: without compromising taste, convenience and affordability. convenience and affordability. taste, without compromising nutrition lies at the heart of our vitality mission. Individuals and governments increasingly becoming are everywhere concerned about the impact of diet on – public health. For some, ‘over-nutrition’ leading to obesity and heart disease – is the primary challenge. For others it is ‘under- nutrition’ – not getting enough of the right type of nutrients, largely due to widespread poverty in developing economies. challenge is to make our products the healthy choice for consumers our products challenge is to make We can make a difference to the diets of millions of people. The to the diets of millions can make a difference We NUTRITION
MAKING PROGRESS ON THE BIG ISSUES 8 Our r&D test kitchen in Innovating to widen consumer choice Nutrition labelling the netherlands is one of our centres of culinary We continue to invest in foods that The Choices International Foundation expertise. Its chefs create provide tasty and healthy options for is being established with responsibility ideas for new products, consumers. More than two-thirds of the for overseeing the use of the Choices recipes and product products in our development pipeline have stamp. The aim is for Choices to become demonstrations for our what we call ‘Vitality’ benefts: specifc an independent, international standard Foodsolutions professional nutritional and health benefts. used across the food industry, with its catering business, as well as qualifying criteria regularly reviewed by Highlights from 2006 include: providing culinary training an independent, international committee for employees. n a new low-fat margarine, Rama IDEA!, of food and nutrition scientists. containing important nutrients for the brain, launched in 14 European countries with plans to extend to fve more in 2007;
n sales of Flora/Becel pro·activ’s cholesterol-lowering products grew by around 7% in 2006;
n in Europe, sales of Knorr Vie fruit and vegetable shots grew by 142% in 2006, with more than 100 million bottles sold. UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr Consumer information Tackling obesity n to encourage physical activity, we continued to support initiatives that In response to growing public demand Obesity is now a public health concern for
encourage an active lifestyle and raise for improved nutritional labelling of food developed and developing countries alike. awareness of the risks of heart disease products, we are working to provide clear, According to the World Health Organization – such as Flora/Becel’s marathon simple information for consumers. and the International Obesity Taskforce, sponsorships and the renewal of our more than 1 billion adults and 155 million In May 2006 the Choices programme was partnership with the World Heart school-aged children are overweight or launched. It uses a front-of-pack stamp to Federation for a further three years. obese. make it easier for consumers to identify healthier options – foods and drinks that are Changes in diet and lifestyle, combined with Tackling under-nutrition
in line with internationally accepted dietary a lack of physical activity, are two of the advice for fat, sugar and salt. The front-of- root causes of this trend. As a global foods Our foods can play an important role in pack stamp is complemented by back-of- company, where we can make a difference tackling under-nutrition. Our fortifed pack nutrition information. is by helping people improve their diets and brands include Rama/Blue Band margarines infuencing consumer behaviour. enriched with vitamins A, B and D, and Following the launch in the US, netherlands Annapurna, our iodised salt. In 2006, we and Belgium in 2006, we plan to roll it out In 2006 we strengthened our approach: launched Amaze Brainfood in Turkey, a to all our major markets by the end of 2007. range of milk drinks and cereal snacks which n on labelling, we committed to including Over a third of products already qualify. energy labelling (calorie content) on all contain one-third of the nutrients children Where possible, we partner with others our food products in all our markets; need daily for their mental development. in the industry. For example, in Europe, We also participate in global initiatives to n on product formulation, we defned a we are participating in a voluntary CIAA unique set of metrics to help evaluate the improve nutrition through food fortifcation (Confederation of Food and Drink Industries optimal level of calories in our different via our involvement with the global Alliance of the European Union) nutritional labelling foods based on the role they play in a for Improved nutrition (gAIn). initiative which complements Choices. person’s diet, ie whether they are part of Under this initiative, on the back of all our a main meal or a snack; packs we will show the levels of eight key nutrients (energy, protein, carbohydrates, n on advertising to children, we have • web links sugars, fat, saturates, fbre and sodium) placed restrictions on our food and l Our nutrition policy and approach and four of these (energy, total fat, sugar beverage marketing to children under 12 and salt) as percentages of guideline daily for all products except those that qualify l Nutrition Enhancement Programme
amounts (gDA). We will also show calories for our Choices stamp (see page 20); l Choices on the front of packs as a percentage n to increase consumer choice, we l Food and Beverage Marketing Principles of gDA. continued to offer alternatives such as l Unilever Food and Health Research Hellmann’s Original Mayonnaise (80% Institute fat), Hellmann’s Light (40% fat) and l Working with others – UNICEF, the Hellmann’s Extra Light (7% fat); World Food Programme, Partnership for Child Nutrition, Micronutrient Initiative, World Heart Federation, GAIN
9
this Through save lives. we have partnership, in our progress made real of hygiene understanding which in turn will habits, help Unilever and others the handwashing take people message to more the world.” around Val Curtis Val in Hygiene, Senior Lecturer London School of Hygiene and Medicine Tropical will be used to improve the effectiveness of the effectiveness will be used to improve Lifebuoy Swasthya Chetna the far-reaching handwashing campaign. Good hygiene habits can “
Measuring behaviour change is diffcult. Hygiene The global Health through works to develop evaluation Programme to monitor impacts. Unilever measures scientists, working with partners at the London School of Hygiene and Tropical Medicine, developed and tested a novel and way to assess changes in hand- reliable washing behaviour – SmartSoap bars. These ftted with movement sensors that bars are started changes in usage. We measure using them in a joint study in rural villages in India. This has led to new insights that Leading the way on handwashing Simple hygiene habits like washing hands with soap could halve the number of diarrhoea. Making childhood deaths from and widely available is soap affordable than 5,000 more part of the solution. yet diarrhoeal still die every day from children diseases. This is because behaviour change is needed too. recognising this, our focus on understanding what programmes will trigger behaviour change in individual and communities and then use cultures campaigns that these insights to create achieve sustained improvements.
110-year history. 110-year history. Many of our brands have long had health and hygiene as a core part of their vision. For example, Lifebuoy has been championing hygiene its throughout
Our brand portfolio enables consumers to range of their hygiene needs. meet a broad these brands, and by working in Through partnership with others, we can achieve contribution to our goal of making a real health and hygiene. people’s making a contribution to the health and hygiene of individuals to the health and hygiene of individuals making a contribution the world. around Through our products and partnerships we are committed to we are and partnerships our products Through
Today, our global Health through Hygiene our global Health through Today, and enhances the co-ordinates Programme impact of our hygiene initiatives, working with brands such as Lifebuoy, Pepsodent, Domestos and Pureit, and with partners such as the London School of Hygiene and Medicine. Particular brands lead Tropical specifc hygiene activities, for example, Lifebuoy runs our handwashing campaigns in partnership with UnICEF. HYGIENE
MAKING PROGRESS ON THE BIG ISSUES 10 In India Lifebuoy’s Swasthya Chetna Pureit ‘glowgerm’ demonstration counters the common Lifebuoy Swasthya Chetna Pureit is a unique in-home misconception that ‘visibly (‘health awakening’) has purifer, providing water that is clean’ is ‘hygienically already helped around free from harmful germs, without clean’. When held under 80 million people in 28,000 needing electricity or pressurised ultra-violet light, glowgerm Indian villages become more tap water, making it ideal for powder glows on hands aware of basic hygiene, people in urban and rural areas. washed only with water, stressing the importance of Pureit was launched in India’s providing a dramatic handwashing with soap. Working Tamil Nadu state and has now reminder of the need for in partnership with local and national been extended to the states of thorough handwashing stakeholders, the fve-year campaign Karnataka and Andhra Pradesh. with soap. aims to educate a total of 200 million This affordable purifer costs people – 20% of the population. In E30 and has a running cost 2006 sales increased by almost 7%, of just half a euro cent with particularly strong growth in the per litre. eight states where the programme was launched. Similar programmes are now being adapted and rolled out in Bangladesh and East Africa.
In safe hands habits. In countries where the ratio of 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr The Pepsodent Fighter is a dentists to overall population can be as In 2006 Lifebuoy and our Marketing quality, low-cost toothbrush
low as 1 per 100,000, this can be a real which brings the possibility Academy developed a process called In Safe challenge. of better oral health within Hands. As part of Unilever’s involvement the reach of low-income consumers. with the World Bank’s global Public–Private In 2006, projects were underway in 31 Partnership for Handwashing, we help countries, including a school-based initiative
public sector organisations in Asia and in north vietnam, an education programme Africa create behaviour change programmes for deprived communities in Chile and a to promote handwashing with soap. Four- three-year infant programme in Poland. day workshops, led by Unilever marketers, As well as working on the ground, we are teach campaign-building skills to those developing new products, including the involved in community handwashing world’s frst quality toothbrush which retails programmes. Workshops were held in at the equivalent of just E0.20. Launched in vietnam and Kenya in 2006, with further early 2006, this toothbrush is now available workshops planned for 2007 and beyond. in countries in Asia and Africa.
Promoting oral health Dental hygiene is important in developed markets too. In France, Signal is running a Poor oral health causes pain and discomfort campaign for all six-year-olds by providing and can lead to life-threatening illness. educational materials to their teachers. Around 1 billion people do not brush their Evaluation by independent scientists teeth at all and some 2 billion brush only showed that these materials were proving once a day. to be highly effective in changing brushing For our oral care business, our vitality habits and the results were published by mission translates into a commitment the International Association for Dental to make a measurable contribution to research in June 2006. oral health around the world. Signal/ Pepsodent, our leading toothpaste brand, aims to improve health by helping people • web links change their behaviour, for example, by encouraging them to brush twice a day. l Global Health through Hygiene Programme In 2005, we entered a three-year agreement with the FDI World Dental Federation to l Swasthya Chetna launch a global oral health programme. l Working with others – London School of The FDI is a federation of national dental Hygiene and Tropical Medicine, Global Public–Private Partnership for associations, representing nearly a million Handwashing with Soap, FDI World dentists around the world. One of its core Dental Federation, International objectives is to improve people’s brushing Scientifc Forum on Home Hygiene
11 PHOTO: UFOP e. v. INTEGRATING SUSTAINABILITY MAKING PROGRESS ON THE BIG ISSUES ISSUES BIG THE ON PROGRESS MAKING Contributing to sustainable development requires us to examine all
aspects of our business, from the sourcing of our raw materials to consumer use and disposal of our products.
With over two-thirds of our raw materials SUSTAINABLE AGRICULTURE Other developments in 2006 included: coming from agriculture, we have a clear Starting in 1998, we developed good n gherkins: we have been working with interest in how crops are grown and in Agricultural Practice guidelines for fve thousands of small farmers in India on a securing future supplies. For more than a key crops – palm oil, tea, tomatoes, peas programme that has decreased pesticide decade, we have been working to ensure and spinach. Our guidelines track progress use by 90%. Through training and they are sourced in a more sustainable way. against 11 sustainable agriculture indicators, knowledge-sharing, product quality has Continued progress in a branded goods including water, energy, pesticide use, also improved and yields have increased company like ours depends on realising biodiversity and social capital. by 78%; sustainability solutions that connect with consumers and meet their needs and We subsequently extended our programme n oilseed rape: we defned good expectations. to include olives, sunfowers, gherkins, Agricultural Practice guidelines, for oilseed rape and dairy products which publication in 2007; We achieved this with many of our frozen are key ingredients in brands such fsh products, which carried the Marine n sunfowers: we are now close as Ben & Jerry’s ice cream, Amora Stewardship Council logo to show they to initiating a programme gherkins, Bertolli olive oil, our came from sustainable fsheries. Ben & for sustainable sunfower Hellmann’s range of mayonnaises Jerry’s has also long championed these cultivation; and Flora/Becel margarines. issues and engaged with consumers in n olives: we brought together creative ways. It recently led a campaign Measuring change in agriculture stakeholders for the frst on climate change and its Classic vanilla can be a slow process, due to the time in Cordoba, Spain, to ice cream uses Fairtrade vanilla and sugar. length of growing cycles, but we discuss sustainability in olive While this is a challenging area, we will are making progress. For instance, farming; continue to look for opportunities for in 2006, approximately 90% of our our brands to engage with consumers on contract-grown tomatoes (which we n milk: we are continuing our sustainability issues. estimate account for around 75% work on sustainable dairy of our total requirements) met our farming (see above). sustainable agriculture guidelines.
12 Ben & Jerry’s Caring Dairy initiative Our achievements in fsh Unilever’s share of world crops 2006 Ben & Jerry’s promotes sustainable sustainability % OF WOrLD vOLUME practices in dairy farming through its In 1996 we co-founded the Marine Caring Dairy programme in Europe Stewardship Council (MSC) with the and the Dairy Stewardship Alliance in conservation organisation WWF to % Vermont, USA. establish a global standard for sustainable 12 BLACK TEA The Dairy Stewardship Alliance has fsheries management. In 2006 we sold a developed a self-assessment toolkit large part of our frozen foods business, % which was used by 24 Vermont farmers including our European fsh business.* 4 in 2006. The Caring Dairy programme Despite the sale, we remain committed SPINACH % (28% 2005) developed individual improvement plans to the goal of sustainability for our 5 for all participating farmers. To make the remaining fsh products and will continue link to consumers, Ben & Jerry’s launched PEAS to support the MSC. (12% 2005) www.benjerry.co.uk/caringdairy on We are proud of what has been achieved sustainable dairy farming which also over ten years. Although we were not able allows farmers to tell their story. to reach our 100% sustainable sourcing target, there are encouraging signs that % % consumers are making the connection 7 4 between their choices and the goal TOMATOES PALM OIL of sustainable development. In germany, Unilever has worked with note: The sale of most of our European frozen foods Retailers such as Tesco, UFOP, an independent association business has reduced our share of world volume in that promotes the development Wal-Mart and Sainsbury’s peas and spinach. of oilseeds and protein crops; the now source from MSC- university at Halle; and farmers to certifed fsheries. develop and publish guidelines for the sustainable management of winter oilseed rape.
*With the exception of the Findus brand in Italy.
Towards sustainability agriculture guidelines for tea cultivation. production. Since smallholders can 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr Since then we have communicated them account for signifcant proportions of palm Our approach is to work initially with the
to over two-thirds of our suppliers globally. production – 30% in Indonesia and 90% growers we can infuence most directly, Around two-thirds of our total global tea in nigeria, for example – we participated in namely those on our own plantations and purchases come from suppliers who either the new Smallholder Task Force to discuss ‘contract growers’ from whom we purchase meet our guidelines or are fully engaged in their needs. directly. Then we extend to third-party our tea sustainability programme. growers, whose crops reach us via an We are also members of the roundtable intricate network of suppliers. We work Smallholder farmers are an important on responsible Soy, which seeks to with them on the adoption of our group of suppliers for us, but due to establish agreed Principles and Criteria for sustainable agriculture protocol for the their number and size, can be diffcult to responsible soya production. After thorough crops they sell us. communicate with. In 2006, we entered deliberation, in 2006 participants agreed into a partnership with the UK’s Department on the key sustainability issues linked Engaging with all our suppliers, farmers and for International Development and the to soya production. They also agreed to factories has been the focus of much of our Kenya Tea Development Agency to roll formalise the roundtable as a permanent activity in 2006. While we want to move out a programme to communicate our organisation. towards a position where in the future we tea sustainability guidelines to 450,000 will be able to source all our agricultural smallholder farmers in Kenya. raw materials from sustainable sources, this is a complex process dependent on many Despite the progress we have made over thousands of individuals. For example, we the years, we have not communicated this estimate that around 450,000 small tea work directly to our consumers. We are producers and over a million tea pluckers now exploring the possibilities of external are involved in producing the black leaf tea certifcation for our teas. The rainforest that we sell in Western Europe alone. Alliance, an independent ngO, is in the process of developing an independent The challenge is not only in terms of the standard for sustainable tea production, size and scale of the task and the resources with input from key stakeholders. Once it needed on our side, but also in educating has completed this process, we will explore and convincing farmers of the benefts of the possibility of the rainforest Alliance sustainable practices. Furthermore, the certifying some of our tea supplies. unpredictable nature of growing crops means it is rarely possible to guarantee a totally sustainable source. Working in partnership • web links We are founding members of the Tea sustainability roundtable on Sustainable Palm Oil, l Growing for the Future created to promote the production, Our global leadership position in the tea l Working with others – Rainforest Alliance, procurement and use of sustainable palm Roundtable on Sustainable Palm Oil, industry gives us the opportunity to make a oil. In 2006 it began piloting agreed Roundtable on Responsible Soy, real difference in sustainable tea growing. Principles and Criteria for sustainable Sustainable Food Laboratory, In 2002 we published our sustainable Sustainable Agriculture Initiative Platform
13 detergent, launched Surf Excel Quick Wash in India in 2004, aims to save two buckets of water per wash and continues to sell state of Andhra well in the water-stressed of 30% in 2006. Pradesh with growth Water in our own manufacturing in our own manufacturing Water operations than halved Since 1995 we have more the amount of water we use per tonne by minimising water usage of production at our and maximising water recycling manufacturing sites. During 2006, we the total consumption of water reduced in our operations worldwide by 4.8% and by 6.5% the load per tonne of production have been (see page 30). These reductions target-setting, sharing achieved through such as Medusa, good practice and projects in Latin America. programme a water-saving use by consumers Water our water As part of our strategy to reduce footprint, our R&D focuses on minimising in a number water consumption, resulting innovations. of product We are also researching wider water wider water also researching are We catchment-level impacts and engaging with stakeholders to assess how water is allocated between competing local positive some to led has work This demands. Tanzania’s outcomes, such as Unilever Tea to donation of 25,000 indigenous trees communities in its local water catchment to help conserve water sources. area consumer use of our products (see chart). consumer use of our products This will not be achieved easily or quickly, not least because our business is growing, but it is a guiding principle for our future development. product in our supply chain Water our 11 sustainable is one of Water working are indicators. We agriculture their water impacts to reduce with growers schemes such as drip-irrigation. through For example, in 2006, we ran training for farmers in Italy on best programmes practice in spinach irrigation. Initial results on both water and the energy promising are In Greece, to pump the water. required now use almost all our tomato-growers drip-irrigation.
All our business activities are intimately All our business activities are access to safe water. linked with secure problem is a growing scarcity Water our in many of our markets. Through Initiative we have long Sustainable Water our been seeking to understand and reduce water impacts. Our overall aim is to enable without increasing our business to grow our water footprint, whether in our own operations – which typically account for less than 5% – or in the supply chain or WATER WATER After more than a decade of action, we After more on managing continue to make progress impacts of our own the environmental our impacts operations. In some areas, extend far beyond our own operations. side we use our Business On the upstream that Partner Code (see page 23) to ensure our suppliers meet our expectations on and social impacts. On the environmental side we work in partnership downstream with various organisations and engage with in our consumers to achieve improvements footprint, for example wider environmental on water use. own operations and to seek reductions in the total environmental in the total environmental to seek reductions own operations and and brands. footprint of our business Our commitment to sustainability requires us to go beyond our sustainability requires Our commitment to WIDER ENVIRONMENTAL FOOTPRINT WIDER ENVIRONMENTAL
MAKING PROGRESS ON THE BIG ISSUES 14 In Brazil, our brands Knorr, Estimated water use by Unilever’s use of packaging Reducing packaging AdeS, Omo and Rexona are life-cycle stage materials n The redesign of our Suave shampoo bottles working in partnership with % TOTAL HOME AnD PErSOnAL CArE AnD % BASED On A 2003 STUDy supermarket Pão de Aç car in the US has allowed an annual saving in FOODS FrOM SOUrCIng OF rAW MATErIALS plastic resin of almost 150 tonnes. This is to promote CEMPrE, a TO COnSUMEr USE OF PrODUCTS packaging recycling scheme the equivalent of 15 million fewer shampoo for shoppers. Since the l raw materials l Paper and board bottles being thrown launch of this award- l Consumer use l glass away each year. winning project in 2001, l Manufacturing l Plastics n By eliminating an outer 101 recycling stations l Packaging l Metals have been established carton from our Knorr in 18 cities, working 25 vegetable mix and in partnership with 15 8 creating a new shipping rag-picker co-operatives and display box, we to recycle nearly 15,000 halved the packaging, tonnes of packaging. resulting in 280 fewer 27 pallets and six fewer 40 trucks a year to transport the same quantity.
n Reducing the width of the outer box of Lipton soup cartons saved 154 tonnes of card. UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr We launched ‘easy-rinse’ variants of n Reuse: to reuse packaging from the WASTE Comfort and Vivere fabric softeners in seven materials we receive at our factories. Minimising waste materials from our
countries in Central and Latin America. n Renew: to maximise the proportion of manufacturing processes makes business Both aim to reduce water use per wash packaging from renewable resources and sense and reduces our environmental by reducing the amount needed to rinse to investigate the technical feasibility footprint. reducing both hazardous and clothes after applying the softener. of biodegradable and compostable non-hazardous waste has been a core
In 2006 we launched triple-concentrated materials. In 2004, 83% of our European element of our eco-effciency programme variants of our liquid detergent brands paper-based packaging came from for over a decade (see page 31). During such as Wisk, Snuggle and ‘all’. These sustainable sources. 2006 we further reduced total waste per detergents have already had success in tonne of production by 14.7%. n Recycle: to increase the use of the US and France with benefts including recycled, recyclable and single-material In 2006 we rolled out our Triple r waste reduced water, packaging, chemical and components in packaging for easy sorting reduction programme at sites in Africa, the transport impacts. and recycling at the end of its use. Middle East and Turkey. By sharing best practice and setting targets, these sites PACKAGING The Unilever Packaging group leads the development of our strategies on achieved a signifcant 27.5% reduction Packaging protects products from damage sustainable packaging. The group is in total waste per tonne of production, and contamination as well as providing studying how we develop and specify narrowly missing their target of 30% a vehicle for brand communication and our packaging to minimise impact on reduction by the end of 2006. Through this important safety and usage information. the environment. project, our sites are fnding ways of reusing Our packaging must be both functional and waste, which can also have economic attractive while keeping the impact on the As these issues affect the whole consumer benefts. For example, spent bleaching earth environment as low as possible. goods industry, we work in partnership with is being used by local brick companies as industry and stakeholder groups to explore fuel for kilns and as a fller for bricks. We are working to make this aspect of our joint action. We continue to work with the business more sustainable. There are fve Sustainable Packaging Coalition, a group of key elements to our approach. over 50 companies, comprising packaging
n Remove: to eliminate, where possible, producers, users and retailers. unnecessary layers of packaging such as outer cartons and shrink-wrap flm – an area where our retail customers are increasingly setting reduction targets. • web links n Reduce: to reduce packages to the optimal size and weight for their l Eco-effciency projects contents. l Case studies and performance data
l Working with others – AISE, WBCSD, Water and Sanitation for the Urban Poor, Sustainable Packaging Coalition, European Paper Group
15 CLIMATE CHANGE MAKING PROGRESS ON THE BIG ISSUES BIG THE ON PROGRESS MAKING With a long-standing commitment to reducing greenhouse gas
emissions, over the past decade we have achieved a cut of more than 30% in our own operations.
2006 was the year when climate change Our impacts became widely recognised as the most Leadership advocacy As a manufacturing company we have critical challenge facing our planet. Different Unilever UK’s National Manager was impacts through our use of energy and the one of 14 business leaders from the UK’s weather patterns are affecting agriculture, resulting CO2 emissions. Our environmental Corporate Leaders Group on Climate availability of clean water and sea Change who met Prime Minister Tony performance reporting system measures temperatures. This will have direct effects Blair in May 2006 to urge action to and monitors our energy use and emissions tackle climate change. At this meeting on our business. of CO2. A combination of annual target- business leaders highlighted seven areas where government and business might We have been monitoring our own energy setting and on-site initiatives has reduced work together, including strengthening consumption and since 1995 have achieved CO2 emissions in our own manufacturing emissions trading schemes, supporting real reductions. In 2006, marking the operations by more than 30% over the past low-carbon technologies, improving energy effciency in the commercial sector seriousness of the threat, we convened decade in absolute terms. During 2006, our and stimulating consumer action on a greenhouse gases Working group CO2 emissions from energy per tonne of climate change. of managers from across the business production decreased by 4.2% (see pages to develop a formal strategy on climate 26 and 30 for our 12–year performance change. fgures). Our actions in this area have received The group started to map our wider We also source a proportion of our energy external recognition. For example, in 2006, carbon footprint, taking the broadest from renewable sources − 14.8% of the we were ranked frst in the food and retail defnition of our impacts, so that our new energy we used in 2006, of which 8.2% we sector in the Carbon Disclosure Project’s strategy addresses more than just our own generated ourselves and 6.6% was from Climate Leadership Index for best practice greenhouse gas emissions. national grids. In 2006 we conducted a in greenhouse gas emissions and climate review with the World resources Institute The team estimated Unilever’s total change strategies. to improve our understanding of renewable emissions of greenhouse gases from our energy technology options. On business travel, Ben & Jerry’s is leading own factories, offces, laboratories and the way with 100% of its travel-related business travel to be in the order of 4 million emissions being offset through renewable tonnes of CO2 equivalent a year. energy initiatives in India and South Africa.
16 At our Lipton tea gardens One example of our on-site Working in partnership in Kericho, Kenya, 96% initiatives is Project Electra, of the energy used by the which aims to save energy at We are participating in Refrigerants, Naturally!, estate is from renewable our factories in Latin America. a multi-stakeholder initiative which aims sources. This comes mainly Since the launch of the project to promote HFC (hydrofuorocarbon)-free from our own hydro- in 2006 a 4.9% reduction in refrigeration technologies. As part of our electric power stations and energy per tonne of production commitment, we are replacing our point-of-sale the eucalyptus trees we in Latin America has already ice cream freezer cabinets with more energy- grow to fuel the boilers been achieved, primarily through effcient and climate-friendly hydrocarbon (HC) that dry tea. sharing best practice. refrigerants. By the end of 2006 we had replaced more than 100,000 cabinets, the majority of which are in Europe. In 2007 we aim to roll this initiative out further in Latin America and Asia where we have trials under way. Good practice in energy saving Ben & Jerry’s Climate Change College, a scheme Unilever Canada’s Rexdale launched in partnership with the polar explorer factory was recently featured Marc Cornelissen and WWF, continues to train in a government-sponsored 18-to-25-year-olds to campaign on climate advertisement as an example change in their schools, workplaces and of good practice in reducing homes. In 2006 six energy consumption. Rexdale young people were is our leading manufacturing selected for the facility for oils and margarines in programme from North America. Since 1999, it has the UK, Netherlands, implemented 128 energy-saving Germany and Ireland. initiatives, leading to a reduction of 23,000 tonnes in greenhouse gas emissions, and estimated cost savings of E3.3 million. UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr In 2006 Unilever decided to install leading- Maintenance Products), Unilever has been edge video-conferencing facilities in fve of actively involved in sustainability campaigns, Unilever’s carbon footprint We have attempted to estimate the greenhouse
our main regional offces. We are setting such as Washright, launched in 1998 to gas emissions associated with the sourcing, stretching objectives to reduce the total cost encourage consumers to wash at lower manufacture, distribution, consumer use and disposal of Unilever products worldwide. These are of business travel. temperatures and use full washes. In 2006, represented below. we participated in the launch of AISE’s SOUrCIng
Our wider carbon footprint new Save Energy and Water Campaign to l Agricultural raw materials promote sustainable dishwashing. l Chemical raw materials Our wider carbon footprint shows that l Other, such as services across the whole value chain – including We have also made estimates of greenhouse UnILEvEr OPErATIOnS the sourcing, manufacture, distribution, gas emissions in our raw material supply l Factories,* travel and buildings consumption and disposal of our products – chain. We estimate this is around 10 times DISTrIBUTIOn OF PrODUCTS l From factories to point of sale most CO2 emissions occur during consumer our own emissions. Energy is one of the 11 indicators used to assess the sustainability of COnSUMEr USE AnD DISPOSAL use. This is most marked in our home OF PrODUCTS eg and personal care products which need sourcing under our Sustainable Agriculture l Power for cooking, showering, energy to heat water and power washing Programme (see page 12). laundry l Waste disposal machines, tumble driers and dishwashers. Distribution of our products to retailers Our wider footprint can amount to between takes many forms around the world. In 30 and 60 times as much as our own most markets, we do not own or operate emissions, depending on assumptions made any distribution vehicles ourselves. We have about how consumers use our products, for started to work with major customers to example, the use of hot water in personal minimise emissions, primarily by reducing and laundry washing. the number of vehicle movements. We Our wider carbon footprint is more continue to work to reduce the impacts of diffcult to quantify the further away We can help reduce these environmental the emissions occur from Unilever’s impacts through product design and refrigeration required for storing our ice direct operational control. formulation. For example, many of cream (see above). our laundry detergent brands, such as *Includes third-party manufacturing Omo, Surf and Persil can now be used Biofuels at temperatures as low as 30 degrees We support the use of renewable energy centigrade. We intend to incorporate a from sustainable sources to help combat • web links ‘greenhouse gas index’ into our product climate change. We are concerned, development process, to assess, and where l Eco-effciency projects, including however, that promotion of ‘frst- possible reduce, impacts during product use. Project Electra generation’ biofuels from agricultural crops l Renewable energy initiatives We also take a leadership role in industry may destabilise world food supply and l Transport bodies that can infuence consumer increase local food shortages. This has an behaviour. Within AISE (International impact on our business. l Biofuels Association for Soaps, Detergents and l Working with others – AISE, Refrigerants, Naturally!, Corporate Leaders Group on Climate Change
17 CREATING AND SHARING WEALTH
MAKING PROGRESS ON THE BIG ISSUES ISSUES BIG THE ON PROGRESS MAKING We generate wealth by adding value to the raw materials we
purchase, manufacturing our products to exacting standards and marketing them to consumers.
Employees, governments, investors and Creating wealth many others in the communities where Unilever Group distribution of cash value added 2006 Our operations also create value in the we operate beneft economically from our % OF TOTAL (E11,450m) countries where we source our raw activities. In 2006, out of €39.6 billion materials and manufacture and market our sales income (turnover), we spent over l Employees (E5,355m) l Providers of capital (E3,144m) products. The proportion of added value we €28.2 billion with suppliers and so created l Invested in business for future growth create locally is highest in developing and €11.4 billion value added through our (E1,810m) emerging markets. While only 27.4% of our operations. l governments (E1,063m) l Local communities (E78m) sales are created in Asia and Africa, 51% of Our employees gained the largest share, our employees are in these countries and earning €5.4 billion or 46.8% of the total. 29.6% of goods and services are purchased The providers of capital who fnance our 16 by these regions. 9 >1% operations gained the second-largest share, We expect to see a growing share of our from dividends paid. This group includes 27 sales being generated in developing and both individual shareholders as well as large emerging markets, as population and holdings by pension funds on behalf of purchasing power grow in countries such as individual policyholders. Total shareholder 47 China and India. Our deep roots and early return, which refects the value of dividends engagement in these markets have given us and changes in share price, is calculated valuable experience in meeting the needs on a three-year rolling basis. By the end The share for governments represents direct corporation tax alone, and does not include of consumers at the ‘base of the economic of 2006, it was 10.9%, ranking us 13th taxes collected by local operating companies pyramid’. Whether it is through innovative against a peer group of 20 international on sales nor those paid by them on purchases and wages. Only our voluntary contributions to distribution channels or fnding ways to consumer goods companies. charities and not-for-proft groups are shown in the community share. lower the price of our products, our success will depend on new and different models of doing business.
One example is Shakti (see above), a direct- to-consumer sales distribution network established by Hindustan Lever to reach
18 Shakti taps into women’s Turnover, operating proft, self-help groups and has employees, purchases and value Our contribution to the Millennium proved highly successful for added 2006 Development Goals both our Indian company Hindustan Lever and % By rEgIOn The Millennium Development Goals women entrepreneurs. (MDGs) set out eight global targets for n Europe n The Americas n Asia Africa By the end of 2006, the governments to reach by 2015, ranging Shakti network had grown from halving world poverty to halting the to over 30,000 micro- spread of HIV/AIDS. 27 25 51 29 22 entrepreneurs selling Our main contribution to these goals is products in 100,000 villages through the wealth and jobs we create across 15 states in India. in our business, our value chain and the 40 35 35 35 local community investment programmes we run. We also contribute through our 24 43 partnerships with organisations such as 38 35 36 UNICEF, the UN World Food Programme and Water and Sanitation for the 25 Urban Poor. VALUE PROFIT ADDED TURNOVER OPERATING EMPLOYEES PURCHASES UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr millions of consumers in remote villages 12 farmers in 2001, the programme now Transfer pricing and tax policy in India. A similar initiative involving over covers 5,000 farmers and 600 hectares. national governments are concerned about
3,000 women entrepreneurs is gathering It provides a guaranteed market for these how multinational companies account for pace in Bangladesh. via an agreement farmers as well as interest-free start-up the value of sales between their operating with CArE Bangladesh, it will empower loans and technical assistance and training. subsidiaries, as ‘internal’ prices can be set another 2,000 rural women through Project Since 2006 we have been working with the artifcially low to reduce profts in high-tax Aparajita. In addition to recruiting and European business school InSEAD to study countries. Our worldwide policy is based on training women, CArE will also monitor the social, economic and environmental the ‘arm’s-length’ principle, in keeping with and evaluate the programme to get a better footprint of our South African company. By guidelines developed by the OECD. understanding of its impacts. strengthening the scope and methodology
Our Code of Business Principles requires In Kenya, Unilever has teamed up with used in Indonesia, this research will move Unilever companies to comply with the over 30 companies as part of the Business us closer towards developing a tool for laws and regulations of the countries in Alliance against Chronic Hunger, to help local companies to map and assess their which they operate, and this applies just the Kenyan government take action against sustainability impacts. as much to taxation as to any other issue. hunger in rural areas using business-based Our Code also encourages our businesses solutions. The partnership will seek to buy to represent their views on the formulation local farmers’ produce, help them fnd new “ Measuring the and administration of tax laws either markets and add value to their produce, social, economic and directly or through trade associations thereby generating a sustainable source environmental impacts and similar bodies. In order to create and of income. of a company is a challenging task, but preserve value, we will seek to minimise one that holds great our tax liabilities while complying with all Extending our understanding promise for helping us to applicable laws. In 2005 we published a joint study understand the effects of with Oxfam gB and novib (Oxfam multinational enterprises netherlands) to explore the links on developing countries. between international business and Unilever has aided this poverty reduction, focusing on effort by providing access our operations in Indonesia. This to its data, while also found that the potential poverty encouraging input from a reduction impacts of a company variety of stakeholders.” like Unilever are spread across the Ethan B. Kapstein • web links full breadth of its ‘value chain’. Paul Dubrule Professor of Sustainable Development, InSEAD l Financial results Unilever Indonesia continues to build on the lessons learnt and l Code of Business Principles works directly with local farmers l Local economic impacts
to secure supplies of black soya l Millennium Development Goals
beans for its Kecap Bango soya l Shakti – creating micro-entreprenuers sauce. Starting with just in India
19
10ml UP CLOSE
5,203m
� PHILIPPINES
32 13.1
4,918m
�
5g 12.8 UP CLOSE
NIGERIA
4,365m 6 �
11.7 IFRS* IFRS* IFRS*
5,704m
� 25g
PEPSODENT PEPSODENT
14.1 INDONESIA
50
6,069m
�
14.1
30g PEPSODENT
web links Affordability Affordability
Food and Beverage Marketing Principles Consumer safety in our products? What’s Animal testing with others – European Working Partnership for Alternative Approaches Food European to Animal Testing, Information Council
6,839m
� INDIA l l l l l l 50
14.0 2002 2003 2004 2004 2005 2006 Unilever adopted International Financial from (IFRS) with effect Reporting Standards 1 January 2005, with a transition date of 1 January 2004. This chart shows 2004 as to allow comparison with IFRS and pre-IFRS years. previous •
Cost of toothpaste in four countries 2006 % OF PRICE OF SIx EGGS Advertising and promotions Advertising and promotions 2002–2006 % OF TURNOvER *
on developing new ways of assuring consumer safety that do not involve animal also founding partners of are testing. We Partnership for Alternativethe European which last to Animal Testing, Approaches an ambitious action plan to year agreed its work on developing new take forward to safety testing. approaches REACH legislation.) Alternatives to animal testing to eliminating animal committed are We testing for our business and the vast consumers reach majority of our products without testing any material on animals. ensure Our strict internal procedures control that animal testing is carried out only when is no alternative there approach. spending nearly €3 million a year are We to public health (compared to 8 in 2005). to public health (compared successfully managed, All incidents were taken and follow- measures risk reduction future up actions carried out to prevent occurrence. consumers may be that recognise We concerned the use of certain about continue to We chemicals in products. organisations, industry work with research towards partners, NGOs and regulators enhancing consumer confdence in chemicals, while trying to fnd alternatives, (See page 24 for appropriate. where Incidents can occur if we accidentally Incidents can occur if to the market that does product a release applicable to not conform to the standards Examples can include quality the product. defects, contamination of raw materials in Globally, or mislabelling of ingredients. because of 2006 we had 12 public recalls a deviation in quality or a potential risk
Consumer safety them and Consumers trust us to provide safe that are their families with products for their intended use. Safety is always at the design stage of a new considered Safety approval or process. product our Safety and made through decisions are staple food – eggs – as an illustration of affordability. days – costs just six rupees (around E0.11). days – costs just six rupees (around eggs would Six rupees is also what three The chart on the right compares cost locally. the cost of toothpaste with a common For example, our 30g pack of Pepsodent toothpaste in India – enough for a family of fve to clean their teeth once a day for ten We continue to seek new ways of bringing We of people of within the reach our products all income levels. One way we have done in small, our products this is by offering low-cost packs. This makes them more incomes limited on consumers for affordable and those with only small amounts of cash to spend daily. Accessibility and affordability Accessibility and affordability At the same time we recognise the At the same time we recognise infuence of marketing and advertising on consumers and take our responsibilities have a set of Food and We seriously. Beverage Marketing Principles to guide our do to advertising our foods. We approach under six years of not advertise to children extended this commitment recently age. We between marketing to children to restrict except the ages of 6 and 12, for all products those that qualify for our Choices stamp. campaign emphasises the importance for to play outdoors as of feeling free children part of their learning and development. ’s successful Campaign successful Campaign ’s matter to them. Dove stereotypes current for Real Beauty broke ‘Dirt is good’ ’s Omo/Persil about beauty. inform people about the benefts of our inform people about the and innovations. It is also a way for products on issues that us to engage with consumers and to marketing and communicating their benefts responsibly. responsibly. their benefts and communicating and to marketing leading consumer As one of the world’s use many forms of goods companies, we Advertising helps brand communication. (SEAC), Assurance Centre Environmental a year. which handles over 10,000 approvals are committed to making our products accessible and affordable, affordable, and accessible our products to making committed are We work hard to ensure our products are safe and effective. We We effective. safe and are our products to ensure work hard We CONSUMERS
PERFORMANCE REVIEW 20 UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr CUSTOMERS
Our products reach consumers through a diverse network of
retailers and distributors.
While large retailers continue to grow, small unemployed people to earn a living by Diverse routes to market 2006 shops, street markets and kiosks remain selling our products directly to households BrAzIL (Br), gHAnA (gH), UnITED KIngDOM (UK) important distributors of our products. Our in their local communities. Kabisig members BR GH UK goal is to ensure that Unilever is the partner are supported by the Federation which Population (millions) of choice for our local as well as for our lends them the capital needed to purchase international customers. With our expertise Unilever products and start their own 186 21 60 and international network of businesses, we small businesses. Customers (all fgures approximate) are well placed to work with retail groups in Unilever China has been working with Distributors 450 50 <10 innovative ways to meet shoppers’ needs. Wal-Mart to raise consumer awareness of Wholesalers 2,000 1,000 150 International retail customers account for environmental challenges while raising the retailers 6,000 250 50 a growing proportion of our sales, with profle of both the retailer and our brands Small outlets 800,000 150,000 <10 and kiosks around a ffth of our worldwide revenues in local communities. In August 2006 we channelled through ten major retail launched an in-store recycling campaign chains. One of our strategic priorities is to to encourage consumers to deposit their upgrade the capabilities of our customer used packaging in Unilever and Wal-Mart development teams – and the teams they branded waste collection containers. The work with across marketing, fnance, supply campaign reached 100,000 consumers chain and human resources – to ensure we and increased sales dramatically for Omo are the frst choice for our customers and (183%) and Lux (70%) products during the consumers. In 2006 we continued to build promotional period. integrated customer teams at national, regional and international levels, working In France, retailer Carrefour has across our local companies. Our new endorsed our new concentrated approach has already led to sales increases laundry detergent, Skip petit & in a number of key markets. “ In accordance with its puissant. The product comes in a smaller bottle which requires Sustainable Development 57% less packaging, 60% policy, Carrefour promotes fewer product pallets being Diverse routes to market transported and 60% less approaches that aim to outer packaging for retailers to In many parts of the world, particularly help consumers reduce discard compared to its less- in developing and emerging countries, their daily environmental concentrated formulation. our route to market is through a diverse This contributes to impact. We therefore want Carrefour’s sustainability network of small, independent retailers, to congratulate Unilever goals as well as our own. outlets and kiosks. Here our approach is to on such an initiative and work in partnership. We provide support, for the simple and clear help build capacity and professionalism message they send to to enable them to compete and reach our clients.” consumers more effectively. This in turn Véronique Discours-Buhot helps increase our market share and Sustainable Development penetration while also helping build Director, Carrefour sustainable distribution networks and supporting local economic development.
We have numerous examples of this approach across our operations, such as Shakti, a network of over 30,000 women entrepreneurs in India, and Project Aparajita, a similar initiative in Bangladesh (see page 19). In the Philippines, we have been • web links working in partnership with the Philippine Federation of Local Councils of Women to l Innovative distribution channels help tackle poverty. Together in June 2006 l Recycling partnership with Brazilian they launched Kabisig, a neighbourhood retailer Pão de Aç car
seller programme which enables previously l Shakti – creating micro-entrepreneurs in India
21
0.33
2006 5 2 7 tates
2006 S Turkey
France,
Mexico,
nited
2 1 2 5 0.39
2005 U 2005
Brazil,
Sweden,
Japan,
Republic,
6 3 1
frica
10
2004 0.46
2004 A Spain,
2002–2006 Australia, witzerland, Czech Ireland,
2003–2006 1
S
ingdom 2 outh K 3 3 3 9 S
2003
0.53 2003
Country 7 2 4 13
2002 Employee off site Employee off Contractor on site Employee on site TrFr (per 100,000 hours) public, and those which occur at third-party contract public, and those which occur at third-party goods and producing they are where manufacturers services for unilever. In common with the other companies in our industrial internally. only reportable these incidents are sector, and defnition of an ‘employee’, temporary staff supervision. contractors who work under our direct such accidents may be deemed associated with its organisations our operations, unilever requires fatal accidents involving members of the to report 16 United Age 15 Germany, 17 China, 18 Argentina, Colombia, Indonesia, Netherlands, n n n n
Age of youngest employees 2006 BASED On Our 35 LArGEST BuSInESSES Fatal accidents Accident rate Total Recordables Frequency Rate (TRFR) Frequency Recordables Total All workplace accidents, excluding only those simple frst aid treatment. that require 2 with industry best practice, we include in our In line 1 to the fatality data in the chart, where In addition Action on HIV/AIDS have long-standing HIV/AIDS support We in sub-Saharan Africa, and in programmes 2006 our Kericho tea estate in Kenya won award the Excellence in the Workplace the Global Business Coalition on HIV/ from AIDS. Building on our work in Africa, we comprehensive have implemented a more development in to programme approach too, with a particular focus other regions on a number of Asian countries. In September 2006, following a successful 12-month pilot of a scheme involving Unilever and four other multinationals, Economic Forum published its the World your Supply Chain’, ‘Guidelines to Protect outlining ways for businesses to work with of HIV/AIDS smaller suppliers on awareness and treatment. prevention In 2006 we also introduced our People In 2006 we also introduced to enhance the personal Vitality programme of our people well-being and effectiveness at work. Hindustan Lever initiated a which assesses employees’ body programme and blood cholesterol mass, blood pressure, Investing in people In line with our new business priorities, the in 2006 we continued to strengthen capabilities of our leadership teams and those working in consumer marketing and customer development. For example, the marketing function ran nearly 500 training 40% of sessions in 2006 covering around approach global new A marketing. in people to learning designed to develop general was skills, which we leadership and professional out to all managers during 2007. will roll Our total recordable accident frequency accident frequency Our total recordable 0.39 in 2005 to 0.33 in rate fell from fve most regrettably, 2006. However, lost their employees and two contractors from resulted lives. All employee fatalities learnt these car accidents. The lessons from communicated throughout incidents were the organisation. a remain Safe travel and transport therefore challenge we face The greatest priority area. safety is in countries that lack basic road During and enforcement. infrastructure set up in our were 2006, Safe Driving Teams local companies. Led by a senior manager, now implementing country- these teams are specifc action plans.
Our goal is the elimination of all employee and contractor fatalities with continual in overall health and safety improvements performance. Our internal global health based on the are and safety standards international OHSAS 18001. standard Health and safety Diversity and inclusion Between 2000 and 2006, the proportion from of women in management increased have 24 nationalities 25% to 33%. We among our 123 most senior managers. In led by 2006 our Global Diversity Board, Chief Executive, set up detailed our Group of diversity monitoring to track the progress our diversity initiatives. In implementing our restructuring In implementing our restructuring we seek to act with integrity programmes consultation processes. and follow agreed fairly – and affected those aim to treat We help them to fnd alternative employment employee From is necessary. if redundancy that this level consultation, we recognise of organisational change is a source of concern. take these concerns We we the process seriously and throughout that to ensure communicate regularly people understand what is happening. In 2006 we also signed a seven-year to contract with Accenture outsourcing and handle all transaction processing administration support services for our function. human resources As a result of this restructuring and further of this restructuring As a result divestments, the number of people we reduction a 27,000, around by fell employed of 13%. The sale of our tea plantations in India accounted for 18,000 of these, and foods the sale of the majority of our frozen for a further 3,000. business in Europe working are making our business simpler and more effective. effective. more and business simpler our making are working the process During 2006 we continued our business to improve of restructuring our growth competitiveness and support is simpler and The new structure strategy. a through supports faster decision-making executive. Since 2004, we have streamlined our senior management headcount reduced 30%. by around Signifcant changes in our organisational structure and ways of and structure organisational in our changes Signifcant EMPLOYEES EMPLOYEES
PERFORMANCE REVIEW 22 sugar levels. It also provides nutrition, health integrity. Our prohibition against the giving In all these countries, wages paid by and exercise advice. Over 10,000 employees or receiving of bribes is absolute. Moreover, Unilever exceed the minimum wage have taken part so far, and each will be we make clear that no employee will be established by the relevant national followed up annually. penalised for any loss of business resulting authority. 40% of our eligible employees from the rejection of bribery. The Code are members of trade unions. Several leadership teams – including the is communicated to all employees and Unilever Executive – also took part in a translated into 47 languages, with processes well-being programme. Each received an in place to raise concerns and report individual health check, which was then breaches. In 2006, we dismissed 68 people used to design a personal plan to improve (compared to 66 in 2005) for breaches of their nutrition, ftness and mental resilience. • web links our Code. l Restructuring We abide by core ILO labour standards Living our values l Diversity and our Code sets out requirements on l Health and safety, fatality and accident Each year, country chairmen provide positive protecting labour rights. In 2006 we data over ten years assurance that their business adheres to surveyed our 35 largest businesses which our Code of Business Principles. The Code showed that our youngest employees, aged l Respecting rights provides a clear set of ethical guidelines to 15, are in germany, Switzerland and the US, l HIV/AIDS enable employees to uphold our business compliant with local legislation. l Code of Business Principles
SUPPLIERS 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr
We continue to assess our suppliers against our Business Partner
Code which sets out the standards we expect from them.
Our Business Partner Code is based on embed the procedures into routine supplier First-tier suppliers of raw materials our Code of Business Principles, outlining management processes and develop more and packaging 2006
our expectations of suppliers on health experience of helping poorly performing % FOODS, HPC AnD COMBInED (TOTAL 8,430) and safety at work, business integrity, suppliers to meet our requirements. l Foods l HPC l Foods/HPC labour standards, consumer safety and the This is a complex task, though one of environment. 7% increasing concern to consumers, retailers (560) By the end of 2006, we completed the and many of our competitors. We are 40% (3,420) process of communicating the Code’s working with our industry peers to establish requirements to our frst-tier suppliers of a joint approach as suppliers of all types are ‘production items’ (see panel) and began encountering diffculties with the multiplicity analysing the responses. The process of information requests from customers like 53% (4,450) included seeking evidence of management us. During 2006, Unilever and a group of processes and adherence to external social, peer companies set up a forum aimed at environmental and labour standards such as sharing a common approach and system Key supplier facts ISO 14001 and SA 8000. to evaluate the social, economic and These 8,430 suppliers of raw materials and environmental performance of suppliers packaging represent 55.5% of the €28.2 billion All regions have been covered and details we spent on bought-in goods and services. They across common types of goods and services. of the suppliers’ responses collated into are our ‘frst-tier’ suppliers of ‘production items’ The forum is still in its early stages and is and include third parties who undertake about a central database. Most suppliers have 15% of our total production. considering the best options. responded positively, expressing support for the initiative. However, about 15% did not provide any details of policies or standards Extending the approach which would provide positive assurance Unilever is increasingly buying in goods towards our Code. and services, such as plant and equipment, These suppliers will be prioritised for the human resources, fnance and IT support. level of risk they represent. We will engage This supply base for ‘non-production items’ with them further to understand their is large, often highly localised and complex. management practices. Where we continue The priority segments within this supplier to have concerns, we will follow up with base have now been identifed and we will conduct assessments on them during 2007. site audits. • web links
This process will continue throughout 2007 l Supplier assurance
and beyond. We will also be looking to l Business Partner Code
23 CIVIC ENGAGEMENT PERFORMANCE REVIEW REVIEW PERFORMANCE We strive to be trusted members of society wherever we operate, working transparently with governments and other partners to
fulfl our responsibilities and achieve our goals.
Our Code of Business Principles guides our domestic market reform, provide funding behaviour in all aspects of our work, both for infrastructure and set trade and The United Nations Global Compact within our business and externally with investment rules. As a signatory of the United Nations Global Compact, Unilever is committed to others. It commits us to obey the laws of Actions by national governments and living out the Compact’s ten principles on the countries in which we operate and, international trade bodies like the World human rights, labour, environment and more broadly, behave with honesty, integrity anti-corruption in our everyday business Trade Organization to liberalise trade fows operations. and openness, and with respect for the have led to signifcant economic growth in human rights and interests of our employees Our own Code of Business Principles has many developing and emerging markets. long refected the Compact’s goals. Our and other stakeholders. In line with our While these countries continue to face website provides our annually updated Code, we do not support political parties or Communication on Progress, explaining grave social, economic and environmental fund groups that promote party interests. how we are implementing the principles challenges, we believe that market- across our business. We recognise that business has an based growth within effective regulatory important role in promoting good frameworks can make a signifcant impact governance in society. For example, we are on poverty reduction. We continue to supporting the work of Business Action engage in discussions with national and Against Corruption in Africa which aims to international organisations on trade embed best practice across our supply chain liberalisation. For example, we are and more widely. exploring customs facilitation projects in Africa to identify specifc barriers and External relationships opportunities. This is supported by the Investment Climate Facility, a public–private We encourage our companies to take part partnership which aims to promote in the development of public policy that economic development as the most may affect our business. We engage with sustainable way out of poverty. We commit governments and other organisations, E400,000 a year to this partnership as one regulations, we contributed to PrODUCE both directly and through bodies such as of eight corporate partners. (Piloting rEACH On Downstream Use and trade associations. We take part in multi- Communication in Europe), a strategic stakeholder debates and when relevant Combating counterfeiting partnership with the European Commission respond to public consultations. We also to test their workability. Learning from engage with organisations that are critical Counterfeit products can pose serious PrODUCE helped to infuence the of our actions and seek to understand and health and safety risks to consumers, developing legislation and the guidance address their concerns. Our aim is to fnd damage the reputation of our brands and on its implementation. workable solutions that beneft stakeholders are a serious threat to global trade. We such as consumers, and give incentives to now have an internal steering committee businesses like ours to invest in research to establish a global strategy to address this and innovation. growing problem. We are also participating in the anti-counterfeiting committees In 2006 we completed mapping our of international groups such as the main external relationships, including global Business Leaders Alliance against trade associations, intergovernmental Counterfeiting, the TransAtlantic Business organisations and ngOs. On our website Dialogue, the International Chamber of we have listed some of our principal Commerce and the International • web links memberships of business associations at Trademark Association. EU and international level. With operations l Code of Business Principles
in around 100 countries, we have many l Trade associations and lobby groups hundreds of separate memberships and REACH l Stakeholder engagement dialogues at national level. The rEACH (registration, Evaluation and l REACH Authorisation of Chemicals) regulation was l UN Global Compact Communication Encouraging trade liberalisation adopted by the European Commission in on Progress 2006 2006, something Unilever has been actively governments provide the economic l Working with others – Global Business supporting since 2002. Because of practical framework within which companies Leaders Alliance against Counterfeiting, concerns about the implications of the like ours operate. They decide on Business Action to Stop Counterfeiting and Piracy (BASCAP)
24 UnILEvEr SUSTAInABLE DEvELOPMEnT rEPOrT 2006 2006 rEPOrT DEvELOPMEnT SUSTAInABLE UnILEvEr COMMUNITIES
We seek to make positive contributions to the communities where
we operate, engaging the talents and resources of our people and partners to ensure the success of our projects.
In 2006 we contributed €78 million to Local activities We use the London communities, equivalent to 1.6% of pre-tax Benchmarking group (LBg) As well as implementing projects as part of international benchmarking proft (compared to €79 million in 2005). our global partnerships, our local businesses model to evaluate our activity. This helped us support around 13,000 are involved in a wide range of community community organisations around the world, activities that respond to specifc local through cash contributions and support Community spend by motivation needs. given the diverse communities in kind. 2006 and markets in which we operate, our % OF TOTAL (E78m) The majority of our giving (40%) goes approach as a ‘multi-local’ multinational l Social investment to long-term community investment is to encourage our local managers to l Charitable donations partnerships with mutual benefts for both defne which needs they are best placed l Commercial initiatives our business and our partners. A third to address. takes the form of charitable donations in For example, in nigeria we have been response to pressing social needs. More 33 working with Sightsavers International and 27 than a quarter of our projects seek clear Sokoko State Ministry of Health to help commercial benefts alongside positive prevent blindness caused by trachoma, a community impacts. disease whose spread can be countered We continue to encourage our employees by washing hands and faces with soap. 40 to get involved in community programmes. In Brazil around 4,000 agricultural This provides new ways of connecting with workers have been reached through our consumers in local communities. Our multi-stakeholder rural responsibility and Community spend by subject employees gain skills and motivation and Protected Childhood initiatives. These 2006 enjoy ‘making a difference’. In 2006, we seek to eliminate child labour on tomato % OF TOTAL (E78m) estimate that over 21,000 people took part plantations and to improve working l Health l Economic development in community activity. conditions through better facilities and l Education l Other health and safety advice. l Environment l Arts and culture
Global partnerships In Australia, Project Bluewater taught 14 11 Our global partnerships, such as with employees about water management UnICEF, the World Heart Federation and and conservation, encouraging them to 11 the FDI World Dental Federation, support volunteer 3,500 hours of their time to 20 6 our health, nutrition and hygiene vitality environmental improvements in 2006, themes. In December 2006, Unilever formed while in Canada we have been running our a partnership with the Un World Food Ecovoyageurs schools programme for over 38 Programme to improve the health and ten years to make children aware of their nutrition of poor children through its school environmental footprint. feeding programme. Health: 7 Much of our activity involves our brands. l nutrition 10 This partnership aims to contribute For example, Dove’s successful Campaign l Hygiene 21 l Other €2 million in cash in 2007, through for real Beauty is complemented by a charitable fund which aims to increase corporate, employee and consumer In 2006, nearly 40% of our giving went contributions. We are jointly developing self-esteem among women and girls around to projects that support our vitality a nutrition, hygiene and health education the world. The Fund works in partnership themes of nutrition and hygiene. This refects the increasingly close alignment campaign and will donate fortifed products with schools and organisations such as girl of our community investment with social for use in schools. Our Rama/Blue Band Scouts of America and the Eating Disorders issues relevant to our business. margarines will help raise awareness and Association in the UK to inspire girls to feel funds through cause-related marketing more confdent about the way they look. So campaigns and Unilever employees will be far, Dove’s self-esteem programmes have involved through local fundraising and an reached more than 750,000 young people. exchange programme. • web links
l Community involvement
l Measuring community involvement
25 ) e ( 43 6 2006 1.80 0.39 7.07 3.29 1.82 0.18 f fines f o 164.59 otal cost cost otal T
non- hazardous waste
f Hazardous Hazardous waste 1
o 3.52 0.40 8.35 1.92 0.21 1.75
nes fi 171.75
umber Water Water N
2002 2005 4.29 0.55 9.88 2.15 0.29 2.31 25 3 100 80 60 40 20
195.17 f sites f umber o COD N eporting r
Target 2011 Target n 325 ites in ites s nilever Energy U 2006
web links Number of Number 3 Environmental management system Environmental Detailed eco-effciency KPI data and targets issues Environmental
n
l l l
Boiler/
from energy kg energy from from from 2 2 energy • 2002
T of to landfill/incinerationrecycling). (not Utilities SOx Boiler/Utilities kg SOx Hazardous waste* kg Hazardous waste* kg Non-hazardous m Water Energy GJ CO Parameters COD kg * disposed waste andnon-hazardous able showshazardous 2002 2003 2004 409 2005 384 2006 408 374 383 345 374 2 345 6 1,939 8 3,749 5 24,430 4,226 CO n Environmental prosecutions and fnes prosecutions Environmental 2002–2006 HEAD SITES, COrPOrATE COvErS MAnUFACTUrIng OFFICES AnD rESEArCH LABOrATOrIES Load per tonne of production production of tonne per Load 2002–2006 Reduction in load per tonne of production tonne of production Reduction in load per and our targets for 2011 2002–2006 Kg/TOnnE FIgUrES ExPrESSED AS % OF THE 2002
Yes Yes No No
Yes Yes Yes Yes Yes
In 2006
% % % % % % % 6.5 5.2 4.2 2.5
13.0 15.3 – 2.7 – 2006 vs 2005
% % % % % % % Environmental prosecutions prosecutions Environmental and fnes While we try to maintain the highest management, of environmental standards and monitor We sometimes occur. problems prosecutions on all environmental report fnes for infringement of and resulting The fgures regulations. environmental shown in the table cover our manufacturing sites (317) and include our corporate head laboratories (eight). offces and research for was one prosecution In 2006 there non-compliance with liquid effuent discharge limits. The course has proved particularly effective particularly effective The course has proved our good practice across in promoting support this, we developed operations. To web-portal with over 350 a searchable examples of good practice covering COD and general waste, energy, water, issues. environmental held in Brazil and vietnam in 2006 focused on minimising waste, water and energy consumption. 3.0 3.9 9.3 1.5 2.7 2.8 15.9 2006 vs 2005 TArgET rEDUCTIOn TArgET ACTUAL rEDUCTIOn MET TArgET
X
from energy 2
COD (chemical oxygen demand) COD Non-hazardous waste Hazardous waste CO Boiler/Utilities SO Water Water Energy Target scorecard 2006 2006 scorecard Target Unilever’s Safety and Environmental Safety and Environmental Unilever’s conducts eco-effciency Assurance Centre our business. training courses throughout These aim to deliver tools, techniques and to the people responsible directly awareness impact of the environmental for reducing our manufacturing operations. Courses Eco-effciency training and web support During 2006 we met all our targets those on chemical oxygen apart from waste. demand (COD) and hazardous While our performance on hazardous we fell short of our waste did improve, ambitious target of a 15.9% reduction. See commentary on pages 30 and 31. Performance in 2006 Every year we collect data from each of our Every year we collect data from of manufacturing sites on key measures performance. This is collated environmental and analysed using an environmental system. Over the performance reporting past 12 years we have continually improved data, most the way we collect and report of a web- the introduction through recently system. based reporting reducing the impacts of our own – manufacturing operations – eco-effciency strategy. part of our environmental is a core is underpinned by our Our approach management system which is environmental is based on ISO 14001. An essential element of targets for our the setting and reviewing key performance indicators (KPIs). operations, minimising both resources used and waste created. created. and waste used resources both minimising operations, We aim to improve the eco-effciency of our manufacturing manufacturing of our eco-effciency the aim to improve We ECO-EFFICIENCY ECO-EFFICIENCY
PERFORMANCE REVIEW 26 Unilever SUStainable Development report 2006 27
Continue towards 2010 goal Continue towards for Shakti Support further national oral through health programmes FDi partnership engage suppliers and growers of vegetables and tomatoes globally in the use of monitoring tools Continue to seek eco-effciency in our operations reductions packaging for roadmaps Develop formats, systems and major packaging materials implement GHG strategy of South africa publish results research ongoing improvements in the ongoing improvements food nutritional quality of our and beverages roll out Choices programme to a total of 40 countries Continue working with UniCeF and others on nutrition partnerships Lifebuoy Continue towards Swasthya Chetna goal in india out similar programmes and roll in bangladesh and east africa
Plans 2007 and beyond Plans 2007 and beyond n n n n n n n n n n n
30,000 Shakti entrepreneurs 30,000 Shakti entrepreneurs 100,000 villages around reached oral health projects underway in oral health projects national 31 countries with FDi’s dentist associations engaged with the majority of our suppliers, factories for vegetables, and growers tomatoes, tea and palm oil achieved all our eco-effciency targets except chemical oxygen waste demand and hazardous to Developed our approach packaging and made reductions our portfolio across Defned GHG strategy refned methodology and on Unilever applied to research impact South africa’s assessed nearly all retail and assessed nearly all retail over half our foodservice products rolled out Choices programme in the US, netherlands and belgium to approach Strengthened a commitment including obesity, to show calorie information on packs all product Swasthya Chetna reached 80 million people
Progress in 2006 Progress n n n n n n n n n n n
Continue to work with growers Continue to work with growers and suppliers to implement for key sustainability standards crops Continue assessment of our Continue assessment through portfolio product our nutrition enhancement programme approach roll out Group-wide to nutrition labelling map our greenhouse gases map our greenhouse (GHG) footprint with inSeaD to refne Work social and economic impact assessment methodology 2010 target of towards Work 100,000 Shakti entrepreneurs 500,000 villages reaching in india Continue to seek eco-effciency in our operations reductions on packaging extend research materials Continue working towards Continue working towards Lifebuoy Swasthya Chetna goal of of raising health awareness 200 million indians by 2007 of oral health Continue roll-out as part of our programmes Dental Federation FDi World partnership
Our commitments n n n n n n n n n n
Creating and Creating sharing wealth Environmental Environmental footprint Sustainable Agriculture Initiative Hygiene Nutrition of our achievements and future plans. and future of our achievements environmental considerations into our business. this is a summary a summary this is our business. into considerations environmental our focus in 2006 was on further integrating social, economic and and social, economic further integrating was on in 2006 our focus COMMITMENTS, PROGRESS, PLANS PLANS PROGRESS, COMMITMENTS, ASSURANCE We asked Deloitte to provide independent assurance of selected data and related assertions in our report. This is their statement.
Independent assurance report by Deloitte n Analysing and testing on a sample basis & Touche LLP to Unilever PLC on its Group the key structures, systems, processes, Responsibilities of Directors and independent assurance provider Sustainable Development Report 2006 procedures and controls relating to: (the Report) n The Unilever Directors are responsible – stakeholder identifcation, engagement for the preparation of the Report and responsiveness; and for the information and What we looked at: scope of our statements contained within it. They work – management commitment and the are responsible for determining governance structures used for managing Unilever’s objectives in respect of SD Unilever PLC (‘Unilever’) has engaged us to corporate responsibility; performance and for establishing and give assurance as to: maintaining appropriate performance – implementation of SD-related policies/ management and internal control systems from which the reported Managing and reporting sustainable strategies/codes of conduct; development (SD) performance: Whether information is derived. Unilever’s description on page 7 – of using – key management processes to support n Our responsibility is to independently the principles of Materiality, Completeness the implementation of the above- express conclusions on the reliability mentioned policies; of management’s assertions on and responsiveness set out in the selected subject matters as defned AccountAbility 1000 Assurance Standard – report development and approval within the scope of work above. (AA1000AS) in its approach to managing process, including the selection of n This report is made solely to Unilever and reporting SD performance at group material issues to be reported on, related PLC in accordance with our letter level – is not materially misstated. Our work key performance indicators and other of engagement for the purpose included a review of Unilever’s approach to of the Directors’ governance and features in the report; stewardship. Our work has been nutrition, hygiene, sustainable agriculture undertaken so that we might state – the collation, aggregation, validation and its implementation of its Business to the Company those matters we Partner Code; and and reporting processes of the EOS are required to state to them in this performance indicators; and report and for no other purpose. Environmental and occupational To the fullest extent permitted by safety performance (EOS) data for – progress made against commitments. law, we do not accept or assume responsibility to anyone other than 2006: Whether the eight environmental n We reviewed the content of the report Unilever PLC for our work, for this performance indicators on pages 30 against the fndings of our work and, as report, or for the conclusions we and 31 and the two occupational safety necessary, made recommendations for have formed. performance indicators on page 22 are not improvement. materially misstated. What we found: our conclusions What we did: assurance process A limited assurance engagement is Based on the assurance work we performed, designed to give a similar level of and standards assurance to that obtained in a review we are not aware of anything that causes us of interim fnancial information. To A multi-disciplinary team of corporate to believe that the management assertions achieve limited assurance the ISAE3000 responsibility (Cr) and assurance specialists on the subject matters defned above are requires that we review the processes, performed the engagement to provide systems and competencies used to materially misstated. compile the areas of the Report on which limited assurance in accordance with we have been asked to give assurance. the International Standard on Assurance It does not include detailed sample Engagements 3000 (ISAE3000). Key testing of source data or the operating effectiveness of processes and internal procedures we carried out included: Deloitte & Touche LLP controls. This provides less assurance and is substantially less in scope than a n Interviews with managers at Unilever’s London, United Kingdom, 24 April 2007 reasonable assurance engagement. head offces, including the corporate responsibility team and those with operational responsibility for performance in the areas we are reporting on;
n visits to ten sites across regions reviewing management practices and EOS reporting systems; web links n Analysis of public information relating to •
Unilever and industry Cr practices and l Assurance process and Deloitte’s key performance during the year; observations and recommendations
28 UNILEVER SUSTAINABLE DEVELOPMENT REPORT 2006 2006 REPORT DEVELOPMENT SUSTAINABLE UNILEVER AWARDS AND RECOGNITION
Here are some highlights from 2006 of recognition we have
received from external bodies on our social, economic and environmental performance. Sustainable Development International National
Specialist agencies, including socially responsible investment At national level, our country-based operations are assessed funds, provide a variety of ratings and rankings of our global on their performance against local indices and rankings, Report 2006 performance, for example: for example:
n Food industry category leader in the Dow Jones n Unilever Tea Kenya received the Excellence in the Sustainability Indexes for the eighth year running; Workplace award from the Global Business Coalition on HIV/AIDS for its employee HIV/AIDS education, prevention n Included again in the FTSE4Good Index Series; and treatment programme; n Named in Innovest’s Global 100 Most Sustainable n Unilever Argentina was ranked No.1 employer for the third Corporations in the World; year running by Apertura magazine; n Achieved Gold standard in the UK’s Business in the n Unilever Indonesia topped a list of Asia’s most admired Unilever N.V. Community Corporate Responsibility and Environment companies in a Wall Street Journal poll; Weena 455, PO Box 760 Indexes 2006 and listed in its Top 100 Companies 3000 DK Rotterdam that Count; n Unilever Nigeria won the UNICEF/CANET Blue Ribbon The Netherlands award for its contribution to the reduction of micronutrient T +31 (0)10 217 4000 n Sector leader in the Carbon Disclosure Project’s Climate F +31 (0)10 217 4798 defciency in the country; Leadership Index of companies showing best practice in Commercial Register Rotterdam reporting of greenhouse gas emissions and climate change n Unilever Canada led a corporate responsibility survey Number: 24051830 strategies; carried out by Report on Business magazine and Jantzi Unilever PLC Research; n Our 2005 Environmental and Social Report was ranked PO Box 68, Unilever House 100 Victoria Embankment sixth in the world in the UNEP/Standard & Poor’s/ n The Asian CSR Awards recognised Unilever Pakistan for London EC4P 4BQ SustainAbility Tomorrow’s Value Global Reporters its community involvement and Unilever Philippines for its United Kingdom Survey 2006; environmental stewardship. T +44 (0)20 7822 5252 F +44 (0)20 7822 5951 n The responsible management of our supply chain was recognised by an award from VBDO, a Dutch investors’ Unilever PLC registered offce organisation. Unilever PLC Port Sunlight Wirral Merseyside CH62 4ZD United Kingdom Our website expands this report with more detailed Writing and consultancy
information, including case studies and an overview The Corporate Citizenship Company Registered in England and Wales Design and production Company Number: 41424 of all our social, economic and environmental key Red Letter Design performance indicators. Printing Beacon Press Further publications cover some of the topics in this A CarbonNeutral company. ISO 14001: 2004 report in more depth. These include our Annual Paper: Greencoat Plus Velvet contains 80% Review and our Global Challenges: Local Actions recycled fbre and has been independently certifed according to the rules of the Forest Stewardship series of articles that looks at how we are tackling Council (FSC). If you have fnished with this report social and environmental concerns by working in and no longer wish to retain it, please pass it on www.unilever.com partnership. to other interested readers or dispose of it in your recycled paper waste. Thank you. For further information on our Tell us what you think via Contact Us: we welcome social, economic and environmental your feedback. performance, please visit our 80% website. The site is our principal Cert no. SGS-COC-0620 means of communicating our • www.unilever.com performance and is updated throughout the year.
t TURN OVER FOR ENVIRONMENTAL PERFORMANCE DATA 29 CHAIRMAN’S INTRODUCTION ECO-EFFICIENCY PERFORMANCE
PERFORMANCE REVIEW REVIEW PERFORMANCE (see page 26). We do not collect data from validation of site-level data and deliver the unilever’s mission is to add vitality to life. these charts show the eco-effciency performance of our third-party companies that manufacture collated worldwide data faster and more or pack our products (these account for transparently. in 2005 we piloted the system manufacturing sites over the past 12 years, and set out our targets approximately 15% of production). in three regions (approximately 60 sites) and We meet everyday needs for nutrition, Sunlight soap and Blue Band margarine: during 2006 rolled it out to all sites.
hygiene and personal care with brands that they built businesses with strong values and Our Vitality Mission and Corporate towards 2011. We also explain in brief our progress in 2006. Quality of data 100% of sites reported environmental data help people feel good, look good and get a mission to act as agents of social change. Purpose with 98.4% of sites reporting on all key more out of life. Our mission is to add Vitality to life. We meet We have continued to improve our global sustainable development has become everyday needs for nutrition, hygiene and Scope of data in unilever, 25 sites were closed or sold environmental prosecutions and resulting system for the management and reporting environmental parameters. Our aspiration is to meet these needs in a the overarching goal for business and personal care with brands that help people • web links and did not submit any data. a further two fnes, including from our corporate head of environmental performance data through the defnitions and basis of reporting of the sustainable way. at the heart of our government. it demands that we meet feel good, look good and get more out of life. in 2006, 317 sites in 70 countries reported sites consolidated into one combined site offces and research laboratories, which the development of a web-based system. l Key Performance Indicators Our deep roots in local cultures and markets environmental performance data. Of these indicators shown on these pages is described corporate purpose is the drive to grow the needs of society today without for their reporting. We also collect data on together represent an additional eight sites this will help improve the management and around the world give us our strong six sites were new reporters. Due to changes on our website under Data parameters. l Data parameters sustainably and in this way create long- compromising the ability of future relationship with consumers and are the term value for all those with a stake in the generations to survive and prosper. foundation for our future growth. We business. will bring our wealth of knowledge and a commitment to sustainable development international expertise to the service of local Our efforts are guided by our code of and responsible business practice is consumers – a truly multi-local multinational. COD (chemical oxygen demand) Water Hazardous waste Non-hazardous waste Business principles which sets the standards embedded in our mission and principles. Our long-term success requires a total kg/tOnne OF prODuctiOn m3/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn commitment to exceptional standards of of behaviour we demand from all our in practice this means understanding the tOtaL cOD Leaving the sites estimateD cOD tO the aqueOus envirOnment performance and productivity, to working 9 23.61 0.98
7.95 25 employees. it also outlines our commitments impact we have as a business on society, together effectively, and to a willingness to 0.96 3.94 1.0 8 7.26 to our stakeholders including consumers, not only in how we run our own operations, embrace new ideas and learn continuously. 44 3.65 6.79 3.23 To succeed also requires, we believe, the TARGETS 7 6.54 20 customers, suppliers, employees, but also in sourcing our raw materials and, 1995 17.58 17.46 1995 2.96 1997 0.69
0.8 1996 6.06 2.79 highest standards of corporate behaviour 0.66 3 TARGETS
communities and the environment. crucially, through our brands. 1996
3 2.50 14.86 5.43 6 0.62
towards everyone we work with, the 2.31 2.33 1997 5.04
2.10 15 TARGETS 0.55 0.55 TARGETS 13.00 communities we touch, and the environment 1998
1.89 0.6 12.00 1996 0.50 0.50
values-led brands will increasingly drive our 1997 1.80 1.75 1.72 5 4.29 1999 11.26 2 1995
on which we have an impact. 0.44 1.50
2 9.88 9.65 Our sustainability journey 1998 3.73 1.38 9.35 0.40 3.67 1.32 0.39
business strategy. We are now integrating 2000 1.30 1999 1998 3.52 3.43 8.35
3.29 10
1.05 4 3.14 This is our road to sustainable, proftable 2001 7.07 2003
0.4 1999 2.98 2002 0.86 social, economic and environmental 0.88 0.78
Over 100 years ago, William hesketh Lever 2000 2001 growth, creating long-term value for our 1 2000 2001 0.54
2006 1 2002 0.48 3 0.41 considerations into our brand innovation 2004 2007 2003
shareholders, our people, and our business 2002 0.28 0.24 2003 and samuel van den Bergh did not just 0.25 2004
2005 5 2004 2007 0.39 2006 1995 1996 2011 2005 2005 2006 0.2 2006 partners. 1997 2006 0.33 2006 7.57 2007
and product development. 2011 0.33 create the world’s frst consumer brands, 2 2006 1998 1999 2011 0 2007 6.55 0 2000 2001 2011 5.78 2002 2003 2004 2005 Governance 2006 Despite an increase in the number of product variants on many of our in 2006, we achieved a 2.5% reduction in total hazardous waste per in 2006, we achieved a 15.3% reduction in load per tonne of production in this way, we have built strong in 2006, the total cOD load and load per tonne of production increased lines, requiring more frequent cleaning and changeovers, we achieved a tonne of production and a 0.8% reduction in absolute load, but missed and a 13.5% reduction in absolute load, signifcantly exceeding our target in 2006 we strengthened our governance foundations to fulfl our vitality mission slightly and we did not meet our target. this was due in part to an increased 6.5% reduction in water per tonne of production and a 4.8% reduction our ambitious target reduction of 15.9%. a few sites reported the disposal for the second year running. many of our sites have found innovative in this area. the Board member with and our commitment to sustainable number of product variants, requiring more frequent changeovers and in total consumption, exceeding our target. this was largely due to water of a backlog of hazardous wastes during 2006 as well as waste product recycling routes for their waste streams, including energy recovery, responsibility for delivering our development. cleaning of our production lines. the amount of cOD sent to the aqueous recycling and conservation efforts and improved processing. We also that could not be reworked into our processes. many sites performed well, composting and brick manufacturing. seven sites reduced their non- environment, however, continues to decrease. 97% of the total cOD benefted from further restructuring in our supply chain. 15 of our sites however, and fve sites managed to reduce their hazardous waste by more hazardous waste by more than 1,000 tonnes, and a further six sites by commitments is our president of home and unilever is fortunate to have found michael leaving our sites is subsequently treated in municipal works. We estimate reduced their water consumption by more than 100,000m3 and a further than 100 tonnes, three of which are involved in our triple r project (see more than 500 tonnes. in 2006, 83.3% of our total waste (non-hazardous personal care. he is a member of our Board’s treschow as my successor, who i know has a that 89.4% of this cOD is removed, so the cOD reaching the aqueous 7 sites by 50,000m3 or more. page 15). and hazardous) was sent for recycling. corporate responsibility and reputation keen interest in sustainability. i am proud to environment is signifcantly less than the total cOD leaving our sites. committee which provides oversight and have served this great company over the last guidance on unilever’s environmental and 35 years and am sure it will continue very social impacts and policies. successfully into the future. Energy CO2 from energy Boiler/Utilities SOx Ozone-depleting potential he also chairs our corporate responsibility gJ/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn council, which includes senior executives
from across the business. the council and 0.8 0.00025 0.71 2.92 0.00023 247.35 0.68 2.83 committee beneft from the input of a 3 242.91
2.69 250 0.59 2.57
0.55 TARGETS 0.00020
panel of external specialists in corporate 226.17 0.6
2.40 TARGETS 1996 1995
1995 0.00020 1995 217.23 0.45 2.27 1996 2004 responsibility. Chairman 1996
Antony Burgmans 0.42 2.19 2.15 1997 208.14 2.06 2.06 1997 0.34 1998 0.00016 0.4 0.00016
TARGETS 1998 1.92 2003 0.29 197.91 198.59 1.87 1997 1.82 195.17 1999 0.24 191.46
2 0.00014 0.23 1.75 1999
200 0.21 1998 2000 0.00013 185.67 0.18
1.64 0.00015 2000 2001 2002 1999 2003 2004 0.2 0.00012 2001 171.75 2001 2000 2005 2000 2001 2002 2006 164.59 2006 2002 2003 2003 2007 2004 2002 2005 155.43 2006 0.20 2004
Making progress on 2006 2011 2007 0.17
0.00010 2005 0 2011 0.16 145.68 CONTENTS 2006
1 2005 1995 NO DATA 150 1996 NO DATA 1997 NO DATA 1998 NO DATA 1999 NO DATA 2006 166.60 the big issues 2006 2007 in 2006, we achieved our target with a 5.2% reduction in unit energy We achieved a 4.2% reduction in load of cO2 from energy in 2006 we reduced the sOx emissions from our boiler and utility We measure the amount of ozone-depleting gases (cFcs, hcFcs and This report deals with the operations of chairman’s nutritiOn 8 integrating 2011 load and a 3.4% reduction in absolute energy use. this was partly per tonne of production and a 2.4% reduction in absolute load, operations by just under 13% in load per tonne of production and 11.4% mixtures) in refrigeration, air conditioning and other applications at our the Unilever Group (Unilever PLC and intrODuctiOn sustainaBiLity 12 hygiene 10 due to regional energy effciency and awareness programmes, process meeting our 2006 target. energy sources account for over 94% of our in absolute load, so comfortably exceeding our target. this was in part due sites, and assess the losses each year. the emissions are expressed as kg Unilever NV, together with their group grOup chieF WiDer modifcations and improved reporting. 12 sites reduced their energy use greenhouse gas emissions from our manufacturing sites. Of the total to improved effciency of our boilers, installation of sOx treatment systems cFc-11 equivalent. in 2006, the amount of ozone-depleting potential companies) and focuses on activities in executive’s repOrt 1 envirOnmentaL by more than 50,000gJ, and a further 41 sites reduced theirs by more energy used by our sites, 14.8% comes from renewable sources, of which and the use of lower sulphur fuels. We have benefted from a more stable decreased slightly compared with 2005 and 65 sites reduced their ozone- FOOtprint 14 2006, with some updates in early 2007. aBOut uniLever 2 than 10,000gJ. 8.2% comes from our own site initiatives, and the remaining 6.6% is supply of energy from the grid in india, and the outsourcing of boiler depleting potential by more than 50%. cLimate change 16 from national electricity grids. the majority of our site initiatives are in operations at some sites. Our impacts 4 developing countries and include the burning of waste materials and fuel creating anD strategy anD crops in our boilers. management 6 sharing WeaLth 18 30 31 CHAIRMAN’S INTRODUCTION ECO-EFFICIENCY PERFORMANCE
EFRAC REVIEW PERFORMANCE (see page 26). We do not collect data from validation of site-level data and deliver the unilever’s mission is to add vitality to life. these charts show the eco-effciency performance of our third-party companies that manufacture collated worldwide data faster and more or pack our products (these account for transparently. in 2005 we piloted the system manufacturing sites over the past 12 years, and set out our targets approximately 15% of production). in three regions (approximately 60 sites) and We meet everyday needs for nutrition, Sunlight soap and Blue Band margarine: during 2006 rolled it out to all sites.
hygiene and personal care with brands that they built businesses with strong values and Our Vitality Mission and Corporate towards 2011. We also explain in brief our progress in 2006. Quality of data 100% of sites reported environmental data help people feel good, look good and get a mission to act as agents of social change. Purpose with 98.4% of sites reporting on all key more out of life. Our mission is to add Vitality to life. We meet We have continued to improve our global sustainable development has become everyday needs for nutrition, hygiene and Scope of data in unilever, 25 sites were closed or sold environmental prosecutions and resulting system for the management and reporting environmental parameters. Our aspiration is to meet these needs in a the overarching goal for business and personal care with brands that help people • web links and did not submit any data. a further two fnes, including from our corporate head of environmental performance data through the defnitions and basis of reporting of the sustainable way. at the heart of our government. it demands that we meet feel good, look good and get more out of life. in 2006, 317 sites in 70 countries reported sites consolidated into one combined site offces and research laboratories, which the development of a web-based system. l Key Performance Indicators Our deep roots in local cultures and markets environmental performance data. Of these indicators shown on these pages are described corporate purpose is the drive to grow the needs of society today without for their reporting. We also collect data on together represent an additional eight sites this will help improve the management and around the world give us our strong six sites were new reporters. Due to changes on our website under Data parameters. l Data parameters sustainably and in this way create long- compromising the ability of future relationship with consumers and are the term value for all those with a stake in the generations to survive and prosper. foundation for our future growth. We business. will bring our wealth of knowledge and a commitment to sustainable development international expertise to the service of local Our efforts are guided by our code of and responsible business practice is consumers – a truly multi-local multinational. COD (chemical oxygen demand) Water Hazardous waste Non-hazardous waste Business principles which sets the standards embedded in our mission and principles. Our long-term success requires a total kg/tOnne OF prODuctiOn m3/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn commitment to exceptional standards of of behaviour we demand from all our in practice this means understanding the tOtaL cOD Leaving the sites estimateD cOD tO the aqueOus envirOnment performance and productivity, to working 9 23.61 0.98
7.95 25 employees. it also outlines our commitments impact we have as a business on society, together effectively, and to a willingness to 0.96 3.94 1.0 8 7.26 to our stakeholders including consumers, not only in how we run our own operations, embrace new ideas and learn continuously. 44 3.65 6.79 3.23 To succeed also requires, we believe, the TARGETS 7 6.54 20 customers, suppliers, employees, but also in sourcing our raw materials and, 1995 17.58 17.46 1995 2.96 1997 0.69
0.8 1996 6.06 2.79 highest standards of corporate behaviour 0.66 3 TARGETS
communities and the environment. crucially, through our brands. 1996
3 2.50 14.86 5.43 6 0.62
towards everyone we work with, the 2.31 2.33 1997 5.04
2.10 15 TARGETS 0.55 0.55 TARGETS 13.00 communities we touch, and the environment 1998
1.89 0.6 12.00 1996 0.50 0.50
values-led brands will increasingly drive our 1997 1.80 1.75
5 4.29 1999 11.26 2 1995
on which we have an impact. 0.44
2 9.88 9.65 Our sustainability journey 1998 3.73 9.35 0.40 3.67 1.32 0.39 0.39
business strategy. We are now integrating 2000 1.30 1999 1998 3.52 8.35
3.29 10
1.05 4 2001 0.33 This is our road to sustainable, proftable 0.33 7.07 2003
0.4 1999 2002 0.86 social, economic and environmental 0.88 0.78
Over 100 years ago, William hesketh Lever 2000 5.78 2001 growth, creating long-term value for our 1 2000 2001 0.54 2006 1.72
1 2002 0.48 3 0.41 considerations into our brand innovation 2004 2007 1.50 shareholders, our people, and our business 2003 2002 0.28 0.24 2003 and samuel van den Bergh did not just 0.25 2004
2005 5 2004 2007 2006 1995 1996 2011 1.38 2005 2005 2006 3.43 0.2 2006 partners. 1997 2006 2006 7.57 2007 3.14
and product development. 2011 create the world’s frst consumer brands, 2 2006 1998 1999
0 2007 6.55 2000 0 2011 2.98 2011 2001 2002 2003 2004 2005 Governance 2006 Despite an increase in the number of product variants on many of our in 2006, we achieved a 2.5% reduction in total hazardous waste per in 2006, we achieved a 15.3% reduction in load per tonne of production in this way, we have built strong in 2006, the total cOD load and load per tonne of production increased lines, requiring more frequent cleaning and changeovers, we achieved a tonne of production and a 0.8% reduction in absolute load, but missed and a 13.5% reduction in absolute load, signifcantly exceeding our target in 2006 we strengthened our governance foundations to fulfl our vitality mission slightly and we did not meet our target. this was due in part to an increased 6.5% reduction in water per tonne of production and a 4.8% reduction our ambitious target reduction of 15.9%. a few sites reported the disposal for the second year running. many of our sites have found innovative in this area. the Board member with and our commitment to sustainable number of product variants, requiring more frequent changeovers and in total consumption, exceeding our target. this was largely due to water of a backlog of hazardous wastes during 2006 as well as waste product recycling routes for their waste streams, including energy recovery, responsibility for delivering our development. cleaning of our production lines. the amount of cOD sent to the aqueous recycling and conservation efforts and improved processing. We also that could not be reworked into our processes. many sites performed well, composting and brick manufacturing. seven sites reduced their non- environment, however, continues to decrease. 97% of the total cOD benefted from further restructuring in our supply chain. 15 of our sites however, and fve sites managed to reduce their hazardous waste by more hazardous waste by more than 1,000 tonnes, and a further six sites by commitments is our president of home and unilever is fortunate to have found michael leaving our sites is subsequently treated in municipal works. We estimate reduced their water consumption by more than 100,000m3 and a further than 100 tonnes, three of which are involved in our triple r project (see more than 500 tonnes. in 2006, 83.3% of our total waste (non-hazardous personal care. he is a member of our Board’s treschow as my successor, who i know has a that 89.4% of this cOD is removed, so the cOD reaching the aqueous 7 sites by 50,000m3 or more. page 15). and hazardous) was sent for recycling. corporate responsibility and reputation keen interest in sustainability. i am proud to environment is signifcantly less than the total cOD leaving our sites. committee which provides oversight and have served this great company over the last guidance on unilever’s environmental and 35 years and am sure it will continue very social impacts and policies. successfully into the future. Energy CO2 from energy Boiler/Utilities SOx Ozone-depleting potential he also chairs our corporate responsibility gJ/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn kg/tOnne OF prODuctiOn council, which includes senior executives
from across the business. the council and 0.8 0.00025 0.71 2.92 0.00023 247.35 0.68 2.83 committee beneft from the input of a 3 242.91
2.69 250 0.59 2.57
0.55 TARGETS 0.00020
panel of external specialists in corporate 226.17 0.6
2.40 TARGETS 1996 1995
1995 0.00020 1995 217.23 0.45 2.27 1996 2004 responsibility. Chairman 1996
Antony Burgmans 0.42 2.19 2.15 1997 208.14 2.06 2.06 1997 0.34 1998 0.00016 0.4 0.00016
TARGETS 1998 1.92 2003 0.29 197.91 198.59 1997 1.82 195.17 1999 0.24 191.46
2 0.00014 0.23 1999
200 0.21 0.20 1998 2000 0.00013 185.67 0.18 0.00015 2000 0.17 2001 0.16 2002 1999 2003 2004 0.2 0.00012 2001 171.75 2001 2000 2005 2000 2001 2002 2006 1.87 164.59 2006 2002 2003 2003 2007 1.75 2004 2002 2005 2006 NO DATA NO DATA NO DATA NO DATA NO DATA 2004 NO DATA NO DATA NO DATA NO DATA
Making progress on 2006 2011 1.64 2007
0.00010 2005 0 2011
CONTENTS 2006
1 2005
150 1995 1996 1997 1998 1999 2006 166.60 the big issues 2006 2007 155.43 in 2006, we achieved our target with a 5.2% reduction in unit energy We achieved a 4.2% reduction in load of cO2 from energy in 2006 we reduced the sOx emissions from our boiler and utility We measure the amount of ozone-depleting gases (cFcs, hcFcs and This report deals with the operations of chairman’s nutritiOn 8 integrating 2011 145.68 load and a 3.4% reduction in absolute energy use. this was partly per tonne of production and a 2.4% reduction in absolute load, operations by just under 13% in load per tonne of production and 11.4% mixtures) in refrigeration, air conditioning and other applications at our the Unilever Group (Unilever PLC and intrODuctiOn sustainaBiLity 12 hygiene 10 due to regional energy effciency and awareness programmes, process meeting our 2006 target. energy sources account for over 94% of our in absolute load, so comfortably exceeding our target. this was in part due sites, and assess the losses each year. the emissions are expressed as kg Unilever NV, together with their group grOup chieF WiDer modifcations and improved reporting. 12 sites reduced their energy use greenhouse gas emissions from our manufacturing sites. Of the total to improved effciency of our boilers, installation of sOx treatment systems cFc-11 equivalent. in 2006, the amount of ozone-depleting potential companies) and focuses on activities in executive’s repOrt 1 envirOnmentaL by more than 50,000gJ, and a further 41 sites reduced theirs by more energy used by our sites, 14.8% comes from renewable sources, of which and the use of lower sulphur fuels. We have benefted from a more stable decreased slightly compared with 2005 and 65 sites reduced their ozone- FOOtprint 14 2006, with some updates in early 2007. aBOut uniLever 2 than 10,000gJ. 8.2% comes from our own site initiatives, and the remaining 6.6% is supply of energy from the grid in india, and the outsourcing of boiler depleting potential by more than 50%. cLimate change 16 from national electricity grids. the majority of our site initiatives are in operations at some sites. Our impacts 4 developing countries and include the burning of waste materials and fuel creating anD strategy anD crops in our boilers. management 6 sharing WeaLth 18 30 31 NLVRSSANBEDVLPETRPR 2006 REPORT DEVELOPMENT SUSTAINABLE UNILEVER AWARDS AND RECOGNITION
Here are some highlights from 2006 of recognition we have
received from external bodies on our social, economic and environmental performance. Sustainable Development International National
Specialist agencies, including socially responsible investment At national level, our country-based operations are assessed funds, provide a variety of ratings and rankings of our global on their performance against local indices and rankings, Report 2006 performance, for example: for example:
n Food industry category leader in the Dow Jones n Unilever Tea Kenya received the Excellence in the Sustainability Indexes for the eighth year running; Workplace award from the Global Business Coalition on HIV/AIDS for its employee HIV/AIDS education, prevention n Included again in the FTSE4Good Index Series; and treatment programme; n Named in Innovest’s Global 100 Most Sustainable n Unilever Argentina was ranked No.1 employer for the third Corporations in the World; year running by Apertura magazine; n Achieved Gold standard in the UK’s Business in the n Unilever Indonesia topped a list of Asia’s most admired Unilever N.V. Community Corporate Responsibility and Environment companies in a Wall Street Journal poll; Weena 455, PO Box 760 Indexes 2006 and listed in its Top 100 Companies 3000 DK Rotterdam that Count; n Unilever Nigeria won the UNICEF/CANET Blue Ribbon The Netherlands award for its contribution to the reduction of micronutrient T +31 (0)10 217 4000 n Sector leader in the Carbon Disclosure Project’s Climate F +31 (0)10 217 4798 defciency in the country; Leadership Index of companies showing best practice in Commercial Register Rotterdam reporting of greenhouse gas emissions and climate change n Unilever Canada led a corporate responsibility survey Number: 24051830 strategies; carried out by Report on Business magazine and Jantzi Unilever PLC Research; n Our 2005 Environmental and Social Report was ranked PO Box 68, Unilever House 100 Victoria Embankment sixth in the world in the UNEP/Standard & Poor’s/ n The Asian CSR Awards recognised Unilever Pakistan for London EC4P 4BQ SustainAbility Tomorrow’s Value Global Reporters its community involvement and Unilever Philippines for its United Kingdom Survey 2006; environmental stewardship. T +44 (0)20 7822 5252 F +44 (0)20 7822 5951 n The responsible management of our supply chain was recognised by an award from VDBO, a Dutch investors’ Unilever PLC registered offce organisation. Unilever PLC Port Sunlight Wirral Merseyside CH62 4ZD United Kingdom Our website expands this report with more detailed Writing and consultancy
information, including case studies and an overview The Corporate Citizenship Company Registered in England and Wales Design and production Company Number: 41424 of all our social, economic and environmental key Red Letter Design performance indicators. Printing Beacon Press Further publications cover some of the topics in this A CarbonNeutral company. ISO 14001: 2004 report in more depth. These include our Annual Paper: Greencoat Plus Velvet contains 80% Review and our Global Challenges: Local Actions recycled fbre and has been independently certifed according to the rules of the Forest Stewardship series of articles that looks at how we are tackling Council (FSC). If you have fnished with this report social and environmental concerns by working in and no longer wish to retain it, please pass it on www.unilever.com partnership. to other interested readers or dispose of it in your recycled paper waste. Thank you. For further information on our Tell us what you think via Contact Us: we welcome social, economic and environmental your feedback. performance, please visit our 80% website. The site is our principal Cert no. SGS-COC-0620 means of communicating our • www.unilever.com performance and is updated throughout the year.
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