Unilever PLC

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Unilever PLC
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Quick Facts
TypePublic
sectorConsumer goods
Headquarters (Benelux Organization)Rotterdam, Netherlands
Year of Origin1930
Emissions (All Scopes)61,2 Megatons of CO2 (2020)
Total Revenue52 billion EUR
Stock ExchangeLondon Stock Exchange, Euronext Amsterdam, New York Stock Exchange
Key People
  • Alan Joppe (CEO)
  • Graeme Pitkethly (CFO)
  • Nils Andersen (Chairman)
  • Youngme Moon (Vice-Chairmain/Senior Independent Director)
Number of Employees148.000
Subsidiaries
Unilever has over 400 brands worldwide

Unilever PLC

Unilever PLC is a British multinational consumer goods company, with its headquarters in London, United Kingdom. The company has over 400 household name brands, of which 81% are the top two in their market and 13 had a turnover of more than €1 billion in 2021. [1] Unilever's products are sold in over 190 countries and are used by 3.4 billion people every day. [2] Unilever is organized into three main divisions: Beauty & Personal Care, Foods & Refreshments, and Home Care. These divisions had a respective turnover of €21.9 billion, €20.0 billion, and €10.6 billion in 2021. [3] The company has 148.000 employees and their turnover in 2021 was €52 billion. [4] [5]


Unilever Benelux

Unilever Benelux, stylized as Unilever, is a subsidiary of Unilever PLC, with its headquarters in Rotterdam, The Netherlands. [6] The organizations of Unilever Netherlands and Unilever Belgium have been working together in a Benelux context since 2008. While Unilever Netherlands and Unilever Belgium continue to exist, the two companies have used their trade name Unilever Benelux from 2008 onwards, in view of the internal cooperation at the Benelux level. [7] Unilever's turnover in the Benelux is approximately €1.5 billion.

Unilever Netherlands employs more than 2,500 people. Rotterdam is home not only to the Unilever Benelux office, but also to the company's International Corporate Center, which houses its European marketing and innovation hub. Unilever has a production facility in Hellendoorn, which produces ice cream. In December 2019, the new Unilever Foods Innovation Center (also known as HIVE) was opened in Wageningen. In HIVE, they work on "groundbreaking innovations and research to provide food for the growing world population in a sustainable and nutritious way". [8]

The factories in the Netherlands and Belgium as well as Unilever Foods Innovation Center Wageningen and Unilever's international Corporate Center in Rotterdam are not part of the Unilever Benelux organization. [9]

Company Structure

Board of Directors

Unilever Leadership Executive (ULE) [10]
Name Function Remuneration x1000 EUR [11]
Alan Jope Chief Executive Officer 4,890
Graeme Pitkethly Chief Financial Officer 3,440
Conny Braams Chief Digital & Marketing Officer Unknown
Reginaldo Ecclissato Chief Supply Chain Officer Unknown
Hanneke Faber President, Foods & Refreshment Unknown
Sunny Jain President, Beauty & Personal Care Unknown
Sanjiv Mehta President, Unilever, South Asia and Chair and Managing Director, Hindustan Unilever Unknown
Nitin Paranjpe Chief Operating Officer Unknown
Richard Slater Chief Research & Development Officer Unknown
Ritva Sotamaa Chief Legal Officer & Group Secretary Unknown
Peter ter Kulve President, Home Care Unknown

Note: remuneration data was reported over the year 2021 and includes fixed pay and benefits, the annual bonus, GSIP performance shares and MCIP match shares.

Unilever Board [12]
Name Function Remuneration x1000 EUR [13]
Nils Andersen Chair and Non-Executive Director 755
Andrea Jung Vice-Chair and Senior Independent Director 180
Alan Jope Chief Executive Officer 4,890
Graeme Pitkethly Chief Financial Officer 3,440
Laura Cha Non-Executive Director 134
Dr Judith Hartmann Non-Executive Director 126
Adrian Hennah Non-Executive Director 21
Susan Kilsby Non-Executive Director 126
Ruby Lu Non-Executive Director 23
Strive Masiyiwa Non-Executive Director 134
Professor Youngme Moon Non-Executive Director 132
John Rishton Non-Executive Director 145
Feike Sijbesma Non-Executive Director 134

Note: remuneration data was reported over the year 2021.

Unilever Board Benelux [14]
Name Function
Annemarieke de Haan General Manager Unilever Benelux
Silvia Wiesner General Manager Unilever Belgium and Luxembourg
Mike Dicken Head of Supply Chain & Operations, Unilever Middle Europe
Griet Demasure Marketing Director Beauty- & Personal Care Benelux
Fred van Beek Vice President Customer Development Unilever Nederland
Debora van der Zee Vice President Foods Benelux
Tom Smidts Senior Marketing Director Home Care Lead Benelux
Joost Houben Marketing Leader Refreshment Benelux & CCBT Leader Refreshment Nederland
Joanny Lijbers Head of HR and Digital transformation Unilever Benelux
Fleur van Bruggen Communications Director Unilever Benelux
Joost Folkers Vice President Finance Benelux
Jeroen Dees General Counsel Benelux

Accountant

KPMG has been Unilever's accountant since 2014. [15]

Main Activities

Unilever was formed from a merger between the Dutch margarine producer Margarine Union and the British soapmaker Lever Brothers Limited on January 1 1930. [16] They have a holding company named Unilever PLC and N.V. with an Anglo-Dutch structure. On November 30 2020, it was announced that the unification of Unilever's Dutch and UK arms under a single London-based entity was completed. Besides the unification, the company's operations remained the same and the listings on the Amsterdam, London, and New York stock exchanges were maintained. [17] Unilever's products include food, condiments, ice cream, wellbeing vitamins, tea, coffee, cleaning material, pet food, beauty products and personal care. Unilever is one of the most influential consumer goods companies in the world, being named as the company with the most brands in the Kantar Worldpanel Global Top 50. [18] The 13 Unilever brands that are in the top 50 are Lifebuoy, Sunsilk, Knorr, Dove, Lux, Sunlight, Pepsodent, Surf, Rexona, Vim, Brooke Bond, Close Up and Lipton. [19]

Government

Unilever does not have royal status. [20] Unilever has not received NOW support from the Dutch government. [21]

Paris Agreement to Today

Unilever has pledged to be "carbon positive" by 2030. This is mainly a marketing term that organisations use to describe climate positive and carbon negative. Unilever has collaborations through international alliances. They have been experimenting with different forms of internal carbon pricing schemes, this is the concept of applying a cost to each tonne of carbon emitted. They will not finance assets within their operations which are inconsistent with achieving a 100% reduction in Scope 1 and 2 emissions by 2030.[22] Scope 3 is not included in this measure. Unilever has pledged to halve their use of virgin plastic by 2025 and to design all their packaging to be fully reusable, recyclable or compostable.[23]

Financial Results since 2015

The table below depicts the financial situation of Unilever's global activities.

Financial situation
Year Revenue Profit Dividend
2015 [24] 53,272 Billion EUR 7,515 Billion EUR XXX Billion EUR
2016 [25] 52,713 Billion EUR 7,801 Billion EUR XXX Billion EUR
2017 [26] 53,715 Billion EUR 8,857 Billion EUR XXX Billion EUR
2018 [27] 50,982 Billion EUR 12,639 Billion EUR 4,1 Billion EUR
2019 [28] 51,980 Billion EUR 8,708 Billion EUR 4,2 Billion EUR
2020 [29] 50,724 Billion EUR 8,303 Billion EUR 4,3 Billion EUR
2021 [30] 52,444 Billion EUR 8,702 Billion EUR 4,5 Billion EUR

Scandals and controversies

The Indian arm of Unilever (HUL) was forced to shut its thermometer factory in 2001 after authorities found the company was contaminating the environment by dumping tonnes of toxic waste [31]. The same thermometer plant was already moved from New York to India in 1984 over environmental concerns. Although Unilever reached a financial settlement with a workers association of the defunk factory, the site was not decontaminated. In 2005 environmental activists launched a global campaign to force Unilever to clean the toxic waste. Unilever finally agreed to initiate pre-remediation work in 2009 [32] and the cleansing of the site has yet to be completed [33].

In 2009 SOMO produced a report about more Unilevercontroversial practices. First about precarious and deteriorating working conditions for Pakistani Lipton Tea factory workers. Also about pressing issues at Unilever’s (Rainforest Alliance Certified) Tea Estates in Kenya

A 2019 audit of plastic waste by NGO GAIA revealed Unilever as the second worst pollutor in terms of collected plastic pollution in the Phillipines and she was number 7 in a global brand audit in 2018, which represented 239 cleanups spanning 42 countries. Despite the company claiming that it has reduced its overall waste footprint per consumer, Unilever's volume of single-use plastic and other packaging has remained the same since 2010 and so has her use of post-consumer recycled plastic [34]. According to a 2020 report, Unilever’s pollution footprint amounts to 70,000 tonnes per year – covering more than 11 football pitches a day. Especially in developing countries, where waste often isn't properly managed but ends up being burned or dumped, packaging waste causes serious harm to the environment and people's health [35].

Sachets with laminates - such as Unilevers' shampoo sachets - are particularly harmful [36]. These small sachets consist of three layers of different types of plastic which makes them difficult to recycle and therefore uninteresting to collectors. This type of disposable packaging was initially meant to make products accessible to country’s poorest inhabitants but the sachets have made their way into middle class bathrooms as well. Market analyst Euromonitor claims that in Asia over 70 per cent of all shampoo is now sold in sachets and Unilever’s Indian subsidiary alone sells some 27 billion sachets each year [37].

To meet their pledge about collecting more plastic than selling (achieving so-called "plastic neutrality") multinationals such as Unilever have started excavating landfills in developing countries, selling their invaluable contents to the cement industry for incineration as an alternative fuel. According to the Plastic Soup Foundation this is not a good development as it does not decrease multinationals' own production of plastic and does not motivate full recycling of the waste in these landfills, especially if the cement industry is made to be dependent on it[38].

Unilever was an early adopter of sustainability at a time when a uniform definition of the concept was lacking. This enabled the company to set the rules of the game before the authorities could by launching the Sustainable Living Plan and Sustainable Agricultural Code in 2010. Using their own guidelines, Unilever has increased their portofolio of products with 'sustainably grown' ingredients but in practice these norms are only marginally different from the norm applied in regular agriculture [39].

Current Emissions

Total emissions since 2015 ( in megatonnes CO2-eq.)
Year Scope 1 Scope 2 Scope 3 Total
2015 [40] 0,890801 1,071076 57,758578 59,720455
2016 [41] 0,882973 1,007953 61,118867 63,009793
2017 [42] 0,820355 0,938944 59,823314 61,582613
2018 [43] 0,758232 0,893825 62,017585 63,669642
2019 [44] [45] 0,659028 0,469063 61,020357 62,148448
2020 [46] [47] 0,606771 0,216740 60,388592 61,212103
2021 [48] 0,565988 0,144752 61,007131 61,717871

As is shown above the GHG emissions from Scope 3 are extremely high. Therefore it is questionable that Unilever is mainly targeting the emissions that are from Scope 1 and 2. Especially considering the fact that ingredients and packaging contribute with 14.239.918 tonnes of CO2e. In their Annual Report they mention that they have reduced Scope 1 and 2 emissions from energy and refrigerant use by 60% since 2015 and they want to reduce Scope 1 and 2 emissions by 100% from their operations by 2030. The biggest problem however seems to be the emissions resulting from Scope 3. Still it appears as if the company has no concrete plans to reduce these emissions stemming from Scope 3.

Climate Policy and Plans

In March 2021, Unilever released their 'Climate Transition Action Plan', in which they set out three principle targets that guide their actions:[49]

  • a Short-term Emissions Reduction Target: to reduce emissions within their own operations (scope 1 & 2) by 70% by 2025 against a 2015 baseline;
  • a Medium-term Emissions Reduction Target: to reduce emissions within their own operations (scope 1 & 2) by 100% by 2030 against a 2015 baseline; and
  • a Long-term Net Zero Value Chain Target: to achieve net zero emissions across their entire value chain (scope 1, 2 & 3 emissions) by 2039.

These targets are designed to to deliver an emissions reduction pathway in line with the 1.5°C ambition of the Paris Agreement. In addition, they want to halve the full value chain emissions of their own products on a per consumer use basis by 2030 against a 2010 baseline, and they plan to donate 1 billion EUR to the Climate & Nature Fund. Lastly, they state that their primary focus for the 2020s and 2030s is not offsetting, but emissions reduction.[50]

It is important to note that Unilever's 'Long-term Net Zero Value Chain Target' are defined with reference to the GHG Protocol Corporate Value Chain Accounting and Reporting Standard. This means that the target covers Scope 1 & 2 emissions, and upstream Scope 3 emissions, but does not include the complete downstream Scope 3 emissions. The mandatory downstream emissions include direct emissions from aerosol propellants and the biodegradation of chemicals in the disposal phase, but exclude indirect use-phase emissions, such as emissions associated with the hot water usage with their products. These indirect use-phase emissions are not included in the net-zero target, while a substantial part, typically 65%, of their products' emissions footprint are indirect use-phase emissions. Therefore, Unilever's net zero-target is a bit misleading, seeing as only 45% of the downstream scope 3 emissions are covered, especially when investigating the company's emissions and seeing that the largest part of their emissions stem from their scope 3 footprint (namely 98.85% in 2021). Unilever states that they exclude indirect use-phase emissions from the scope of their Net Zero Target because they believe those emissions are not within their sphere of influence. [51] [52] Under the GHG Protocol, indirect use-phase emissions are an optional part of a company's scope 3 emissions. On the other hand, the Science Based Targets initiative does encourage companies to consider them. As a response, Unilever has stated that they do include the indirect use-phase emissions in their Medium-term Value Chain Target to ensure that they have an understanding of these emissions. However, the company's Medium-term Value Chain Target does not include scope 3 emissions, which form the bulk of indirect use-phase emissions. [53]

With regard to their own operations, Unilever has set the following targets to achieve their Short-term and Medium-term Reduction Targets: [54]

  • 100% renewable grid electricity (achieved in January 2020)
  • Transition to 100% renewable heat by 2030
  • Halve food waste in their own operations by 2025
  • Align their capital expenditure with their 1.5 degree pathway
  • Phase out high-impact HFC refrigerants from cooling systems (not mentioned at what term)
  • Eco-efficiency programs to reduce energy demand

With regard to their entire value chain, Unilever has set the following targets to achieve their Net Zero Target: [55]

  • Integrated GHG roadmaps for all key materials and ingredients
  • Zero deforestation by 2023 in palm oil, tea, soy and cocoa
  • An estimated 40-50% reduction in logistics emissions by 2030
  • At least 25% recycled plastic by 2025
  • 100% electrical vehicles or hybrids in their global car fleet by 2030
  • Reduce emissions from aerosol propellants in North America


Due Diligence

Keep the broader context in mind. Is the company integer when it comes to deforestation, palm oil, biodiversity, human rights etc etc? Be critical in the sources used here.

Conclusion

Unilever has admirable ambitions and some concrete plans. As it turns out however most of their emissions stem from their Scope 3 whereas most of their measures and plans are targeting Scope 1 and 2 emissions. For Unilever to achieve actual net zero and follow the 1,5 degrees pathway they must take their Scope 3 into more thorough consideration and revise their actions to achieve their goals.

References

  1. https://www.unilever.com/brands/
  2. https://www.unilever.com/our-company/at-a-glance/
  3. https://www.unilever.com/our-company/at-a-glance/
  4. https://www.unilever.com/careers/
  5. https://www.unilever.com/our-company/at-a-glance/
  6. https://www.mecanoo.nl/Projects/project/257/Unilever-Benelux-Headquarters
  7. https://www.unilever.nl/our-company/over-ons/unilever-nederland/
  8. https://www.unilever.nl/our-company/over-ons/unilever-nederland/
  9. https://www.unilever.nl/our-company/over-ons/unilever-nederland/
  10. https://www.unilever.com/our-company/our-leadership/
  11. https://www.unilever.com/files/10224c68-5e0a-466a-9eea-a43209845b0c/directors-remuneration-report-2021.pdf
  12. https://www.unilever.com/our-company/our-leadership/
  13. https://www.unilever.com/files/10224c68-5e0a-466a-9eea-a43209845b0c/directors-remuneration-report-2021.pdf
  14. https://www.unilever.nl/our-company/over-ons/unilever-board-in-de-benelux/
  15. https://www.accountant.nl/nieuws/2014/5/kpmg-nieuwe-accountant-unilever/
  16. https://www.unilever.com/files/origin/3d0982a9cc0a89b9b4834edc8023cb1e54477f4e.pdf/formation-of-unilever-brochure.pdf
  17. https://www.standard.co.uk/business/unilever-unification-completion-london-b114027.html
  18. https://www.unilever.com/news/press-and-media/press-releases/2017/unilever-named-as-the-company-with-the-most-brands/
  19. file:///C:/Users/Nadia/Downloads/Kantar_Worldpanel_Brand_Footprint_2018.pdf
  20. https://www.koninklijkhuis.nl/onderwerpen/onderscheidingen/predicaat-koninklijk/overzicht-predicaat-koninklijk
  21. https://www.uwv.nl/overuwv/Images/uwv-register-now-vijfde-aanvraagperiode.pdf
  22. https://www.unilever.com/planet-and-society/climate-action/using-our-voice-for-a-zero-carbon-future/
  23. https://www.unilever.com/news/news-search/2022/why-dont-you-just-stop-using-plastic-altogether/
  24. https://assets.unilever.com/files/92ui5egz/production/ac9c917a9f639cf28d9421f6d7dcfe45733fdf23.pdf
  25. https://www.unilever.com/files/origin/79524cdba4e993f9fd83a5d652c2c62ab46a55e6.pdf/unilever-annual-report-and-accounts-2016.pdf
  26. https://assets.unilever.com/files/92ui5egz/production/6be0d0dbe8c5088374b7f3ff903ef4995a1a6a62.pdf
  27. https://assets.unilever.com/files/92ui5egz/production/1e37dec387a6647bd6bd1c8d1bc8a86cd0135ed7.pdf
  28. https://assets.unilever.com/files/92ui5egz/production/1e37dec387a6647bd6bd1c8d1bc8a86cd0135ed7.pdf
  29. https://assets.unilever.com/files/92ui5egz/production/372ab0178e9555aa5010f15aed8295af77149fe3.pdf
  30. https://assets.unilever.com/files/92ui5egz/production/e582e46a7f7170fd10be32cf65113b738f19f0c2.pdf
  31. https://www.theguardian.com/environment/2016/mar/09/unilever-settles-dispute-over-mercury-poisoning-in-india
  32. https://web.archive.org/web/20140204012333/http://www.unilever.com/sustainable-living/Respondingtostakeholderconcerns/India/
  33. https://www.hul.co.in/our-company/our-position-on/kodaikanal-mercury-factory-contamination/kodaikanal-the-cleanup-of-the-former-factory-site/
  34. https://www.greenpeace.org/static/planet4-netherlands-stateless/2019/03/b4d9ed80-factsheet-unilever-greenpeace.pdf
  35. https://www.theguardian.com/environment/2020/mar/31/report-reveals-massive-plastic-pollution-footprint-of-drinks-firms
  36. https://www.greenpeace.org/static/planet4-netherlands-stateless/2019/03/b4d9ed80-factsheet-unilever-greenpeace.pdf
  37. https://newint.org/features/web-exclusive/2017/04/13/inside-unilever-sustainability-myth
  38. https://www.plasticsoupfoundation.org/en/2021/11/new-greenwashing-trick-by-unilever-and-nestle-plastic-waste-for-cement-kilns/
  39. https://newint.org/features/web-exclusive/2017/04/13/inside-unilever-sustainability-myth
  40. https://www.unilever.com/planet-and-society/sustainability-reporting-centre/sustainability-performance-data/
  41. https://www.unilever.com/planet-and-society/sustainability-reporting-centre/sustainability-performance-data/
  42. https://www.unilever.com/planet-and-society/sustainability-reporting-centre/sustainability-performance-data/
  43. https://www.unilever.com/planet-and-society/sustainability-reporting-centre/sustainability-performance-data/
  44. https://assets.unilever.com/files/92ui5egz/production/1e37dec387a6647bd6bd1c8d1bc8a86cd0135ed7.pdf
  45. https://assets.unilever.com/files/92ui5egz/production/e582e46a7f7170fd10be32cf65113b738f19f0c2.pdf
  46. https://assets.unilever.com/files/92ui5egz/production/372ab0178e9555aa5010f15aed8295af77149fe3.pdf
  47. https://assets.unilever.com/files/92ui5egz/production/e582e46a7f7170fd10be32cf65113b738f19f0c2.pdf
  48. https://assets.unilever.com/files/92ui5egz/production/e582e46a7f7170fd10be32cf65113b738f19f0c2.pdf
  49. https://assets.unilever.com/files/92ui5egz/production/bbe89d14aa9e0121dd3a2b9721bbfd3bef57b8d3.pdf/unilever-climate-transition-action-plan-19032021.pdf
  50. https://assets.unilever.com/files/92ui5egz/production/bbe89d14aa9e0121dd3a2b9721bbfd3bef57b8d3.pdf/unilever-climate-transition-action-plan-19032021.pdf
  51. https://assets.unilever.com/files/92ui5egz/production/bbe89d14aa9e0121dd3a2b9721bbfd3bef57b8d3.pdf/unilever-climate-transition-action-plan-19032021.pdf
  52. https://assets.unilever.com/files/92ui5egz/production/e582e46a7f7170fd10be32cf65113b738f19f0c2.pdf
  53. https://assets.unilever.com/files/92ui5egz/production/bbe89d14aa9e0121dd3a2b9721bbfd3bef57b8d3.pdf/unilever-climate-transition-action-plan-19032021.pdf
  54. https://assets.unilever.com/files/92ui5egz/production/bbe89d14aa9e0121dd3a2b9721bbfd3bef57b8d3.pdf/unilever-climate-transition-action-plan-19032021.pdf
  55. https://assets.unilever.com/files/92ui5egz/production/bbe89d14aa9e0121dd3a2b9721bbfd3bef57b8d3.pdf/unilever-climate-transition-action-plan-19032021.pdf