Challenge
By 2010, Unilever’s sustainability activities were fragmented across business units, lacking central oversight and data consistency. Only 28 % of agricultural inputs met sustainable-sourcing criteria, per-unit greenhouse gas emissions continued to rise, and waste-to-landfill rates exceeded long-term targets. Environmental and social disruptions—water scarcity, climate-driven crop failures, human-rights risks in upstream suppliers—threatened reliable production and brand reputation. Investors, regulators, and NGOs pressed for transparent, auditable ESG reporting and accelerated progress toward the Paris Agreement goals.
Solution
Unilever instituted a four-pillar ESG transformation framework:
Governance & Policy Framework: Formed the Global Sustainability Board—chaired by the CEO and including the CFO, Chief Procurement Officer, and external advisors—to set enterprise-wide ESG objectives (GHG, water, waste, sourcing) and tie 30% of executive long-term incentives to annual progress against published targets. Updated the Corporate Code of Conduct to embed sustainability KPIs in performance reviews and procurement contracts.
Data & Reporting Platform: Implemented SAP Sustainability Control Tower on SAP Business Technology Platform, integrating real-time feeds from SAP EHS, factory IoT sensors, and procurement systems. Automated ETL pipelines standardize emissions, effluent, waste, and sourcing data in SAP HANA. Live dashboards in SAP Analytics Cloud enable self-service reporting for regional managers and streamline CDP, GRI, and TCFD disclosures.
Supply-Chain Assessment & Certification: Rolled out third-party audits (CDP, Sedex SMETA) across 1,200 suppliers, covering environmental, social, and ethical criteria. High-risk suppliers must submit corrective-action plans; recurring failures trigger procurement suspensions. Digitally tagged palm-oil and tea shipments ensure traceability to Rainforest Alliance and Fairtrade standards.
Stakeholder Engagement & Transparency: Launched partnerships with WWF, Rainforest Alliance, and UNICEF to co-develop sustainable-sourcing guidelines, community-impact programs, and water stewardship initiatives. Published annual ESG reports with PwC-assured data and deployed an investor portal for interactive ESG KPI exploration. Consumer campaigns educated 2 billion customers on waste reduction and circular-economy participation.
Results
- 52 % reduction in CO₂ emissions per ton of production from 2010 to 2020 [1].
- 95 % of manufacturing waste diverted from landfill by 2019 [1].
- 68 % of agricultural raw materials sustainably sourced by 2020, up from 28 % in 2010 [1].
- Ranked in the top quartile by CDP for climate change and water security in 2020 [2].
- € 200 million annual cost savings from energy-efficiency and waste-reduction programs.
Introduction & Business Context
Unilever, a global CPG leader with 400+ brands and €51 billion in revenue, launched its Sustainable Living Plan in 2010 to embed ESG across every function. Initial progress was hampered by siloed data and inconsistent metrics: regional factories reported using different waste-measurement methods, and procurement teams lacked standardized supplier questionnaires. Executive sponsors recognized that without centralized governance and data, Unilever could not meet its ambitious environmental and social goals.
Investor and regulator pressure intensified following the Paris Agreement, as CDP scores became a proxy for corporate climate leadership. Unilever’s board set a target: transform fragmented initiatives into a unified, digitally enabled ESG program that would set industry benchmarks and drive systemic change across the value chain.
Governance & Policy Framework
The Global Sustainability Board—comprising the CEO, CFO, Chief Procurement Officer, and external NGO/academic advisors—met quarterly to review performance, approve policy updates, and allocate capital to high-impact projects. ESG targets were embedded into the Corporate Code of Conduct and tied to executive LTI payouts: 30 % of bonuses depended on hitting annual GHG, waste, and sourcing milestones.
A formal Sustainability Charter codified processes for risk assessment, due diligence, and remediation. Compliance teams conducted biannual policy audits, and an internal “ESG Hotline” allowed employees and suppliers to flag non-compliance, ensuring transparency and accountability.
Data & Reporting Platform
To unify reporting, Unilever implemented SAP Sustainability Control Tower on SAP BTP, integrating data from SAP EHS modules, IoT-sensor feeds (emissions, effluent, energy usage), and procurement records. Automated ETL jobs in SAP Data Hub standardize and cleanse raw data before loading into SAP HANA.
SAP Analytics Cloud dashboards provide real-time KPI tracking—CO₂ intensity, water usage per ton, waste diversion rates—accessible to C-suite and regional managers. Prebuilt connectors accelerate CDP and GRI report generation, reducing manual compilation time by 80 %.
Supply-Chain Assessment & Certification
Unilever rolled out third-party audits (CDP climate questionnaire; Sedex SMETA social-audit) across 1 200 strategic suppliers. Suppliers scoring below CDP B-level or failing two consecutive SMETA audits must submit corrective-action plans and face procurement escalations if unresolved after 90 days.
Traceability tags on palm-oil and tea shipments integrate with Fairtrade and Rainforest Alliance databases, ensuring 100 % chain-of-custody visibility. Quarterly “Supplier Sustainability Forums” bring top suppliers together to share best practices and address emerging risks.
Stakeholder Engagement & Transparency
Unilever partnered with WWF on the Climate Capital Partners initiative to drive renewable-energy procurement across its factory network. Collaborative R&D with Unicef funded water-sanitation pilot programs in rural sourcing communities.
Annual ESG reports—assured by PwC—are published online, and an interactive investor portal allows stakeholders to query performance data. Consumer campaigns, such as “Less Plastic, More Product,” educated 2 billion users on sustainable consumption, reinforcing brand trust.
Business Impact & Next Steps
By 2020, Unilever achieved a 52 % reduction in CO₂ intensity, 95 % waste diversion, and 68 % sustainable sourcing [1], unlocking € 200 million in annual savings. CDP ranked Unilever in the top quartile for climate and water metrics, signaling leadership to investors and regulators [2].
Phase 2—the Unilever Compass—will extend these frameworks to biodiversity, regenerative agriculture pilots, and Scope 3 emissions tracking. Plans include blockchain-based traceability for all agricultural inputs and AI-driven water-risk forecasting.
Lessons Learned & Conclusion
- Executive sponsorship matters: tying ESG KPIs to LTI payouts drives focus and resource allocation.
- Data unity & automation: a single SAP-based platform eliminates manual consolidation and ensures audit-ready reporting.
- Supplier accountability: third-party audits and digital traceability enforce continuous improvement.
- Collaborative ecosystems: NGO and community partnerships scale impact beyond corporate operations.