UNILEVER SUSTAINABLE LIVIN PLAN -...

PRO!RESSREPORT 2012

UNILEVER SUSTAINABLE LIVIN! PLAN

ABOUT OUR REPORTIN!The Un!lever Susta!nable L!v!ng Plan" Progress Report 2012, publ!shed !n Apr!l 2013, !s complemented by" • The onl!ne Un!lever Susta!nable L!v!ng Report for 2012" Our webs!te !s our pr!nc!pal means of report!ng"

It !ncludes more background to our progress on the USLP and the scope of our assurance programme as well as more deta!led !nformat!on on our approach to runn!ng a respons!ble bus!ness" It also conta!ns !nd!ces that cross reference our performance to the UN #lobal $ompact Pr!nc!ples, the M!llenn!um Development #oals and #lobal Report!ng In!t!at!ve !nd!cators" www#un!lever#com/susta!nable-l!v!ng

• Un!lever’s Annual Report and Accounts 2012% Mak!ng Susta!nable L!v!ng $ommonplace, wh!ch outl!nes our bus!ness and f!nanc!al performance !nclud!ng key f!nanc!al and non-f!nanc!al performance !nd!cators" www#un!lever#com/!nvestorrelat!ons

Boundar!es for report!ngTh!s Progress Report 2012 covers Un!lever’s global operat!ons for the per!od 1 January-31 December 2012 unless otherw!se stated" Data !s prov!ded for Un!lever’s wholly owned compan!es, subs!d!ar!es and key &o!nt ventures and l!sted ent!t!es where we have a ma&or!ty ownersh!p"The Un!lever Susta!nable L!v!ng Plan !s !ndependently assured" Further !nformat!on on our approach to assurance can be found on page 52"

In November 2010 we set out the Un!lever Susta!nable L!v!ng Plan (USLP), our bluepr!nt for ach!ev!ng our v!s!on to double the s!ze of the bus!ness wh!lst reduc!ng our env!ronmental footpr!nt and !ncreas!ng our pos!t!ve soc!al !mpact"

STRATE!YSTRATE!Y

http://www.unilever.com/SUSTAINABLE-LIVING/

STRATE!Y

1

OUR "HAN!IN! WORLD

9 b#ll#onPeople expected on the planet by 2050! populat"on "s grow"ng by 200,000 a day

200 m#ll#onUnemployed today! 600 m"ll"on #obs need to be created over the next decade

2 m#ll#on$h"ldren d"e every year from d"arrhoea and pneumon"a

"l#mate changeIs accelerat"ng towards a temperature r"se greater than 2 degrees

Two-th#rdsOf the world could be l"v"ng "n water-stressed cond"t"ons by 2025

40% Of the world’s agr"cultural land "s ser"ously degraded

40% r#seIn food pr"ces expected 2010-20

1 #n 10Of the adult populat"on "s obese wh"le almost 1 b"ll"on people go hungry

THE "ONTEXT

The Un!lever Susta!nable L!v!ng Plan !s our strateg!c response to the unprecedented challenges the world faces" It !s at the heart of our $ompass strategy wh!ch sets out our amb!t!ous v!s!on and purpose"

OUR PURPOSE TO MAKE SUSTAINABLE LIVIN# $OMMONPLA$EWe work to create a better future every day, w!th brands and serv!ces that help people feel good, look good and get more out of l!fe"Our f!rst pr!or!ty !s to our consumers – then customers, employees, suppl!ers and commun!t!es" When we fulf!l our respons!b!l!t!es to them, we bel!eve that our shareholders w!ll be rewarded"

OUR RESPONSE

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Our "hang#ng World

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012"h#ef Execut#ve Off#cer’s Rev#ew2

VOLATILITY AND UN"ERTAINTY $ THE NEW NORMAL2012 proved to be another challeng!ng year for the global economy# $ommod!ty markets rema!ned volat!le and costs rose s!gn!f!cantly !n excess of expectat!ons# The threat of the world’s largest economy go!ng over a ‘f!scal cl!ff’ and the euro cr!s!s added uncerta!nty and underm!ned frag!le consumer conf!dence#Overall we cont!nue to see slugg!sh growth !n most developed markets contrasted by relat!vely healthy consumpt!on and growth !n asp!r!ng markets" These both have consequences !n terms of the world’s soc!al and env!ronmental equ!l!br!um" Inequal!ty and r!s!ng levels of unemployment – espec!ally among young people – place added stra!ns on soc!al cohes!on" But the b!ggest challenge !s the cont!nu!ng threat to ‘planetary boundar!es’, result!ng !n extreme weather patterns and grow!ng resource constra!nts" These have an !ncreas!ng !mpact on people’s l!ves"Put s!mply, we cannot thr!ve as a bus!ness !n a world where too many people are st!ll excluded, marg!nal!sed or penal!sed through global econom!c act!v!ty' where nearly 1 b!ll!on go to bed hungry every n!ght, 2"8 b!ll!on are short of water and !ncreas!ng numbers of people are excluded from the opportun!ty to work"

OUR VISION FOR !ROWTHWe rema!n conv!nced that bus!nesses that address both the d!rect concerns of c!t!zens and the needs of the env!ronment w!ll prosper over the long term" We need to bu!ld new bus!ness models that enable respons!ble, equ!table growth that !s decoupled from env!ronmental !mpact"Th!s th!nk!ng l!es at the heart of the Un!lever Susta!nable L!v!ng Plan and our $ompass v!s!on of doubl!ng the s!ze of the bus!ness wh!lst reduc!ng our env!ronmental footpr!nt and !ncreas!ng our pos!t!ve soc!al !mpact" To ach!eve our v!s!on, we have set clear goals to halve the env!ronmental footpr!nt of our products, to help more than 1 b!ll!on people take act!on to !mprove the!r health and well-be!ng, to source 100% of our agr!cultural raw mater!als susta!nably and to enhance the l!vel!hoods of people across our value cha!n"

As the th!nk!ng becomes embedded !n our bus!ness, there !s !ncreas!ng ev!dence that !t !s accelerat!ng our growth !n ways that contr!bute to pos!t!ve change !n people’s l!ves"

STRON! BUSINESS PERFORMAN"E Un!lever performed well !n 2012, desp!te d!ff!cult econom!c cond!t!ons"Turnover !ncreased by 10"5%, tak!ng Un!lever through the (50 b!ll!on barr!er, a s!gn!f!cant m!lestone to becom!ng an (80 b!ll!on company" Emerg!ng markets grew for the second consecut!ve year by more than 11% and now account for 55% of total bus!ness" Personal $are and Home $are showed double-d!g!t growth, !n l!ne w!th our strateg!c pr!or!t!es"

UNILEVER SUSTAINABLE LIVIN! PLANThe Un!lever Susta!nable L!v!ng Plan (USLP) !nsp!res us to grow !n l!ne w!th our new purpose to make susta!nable l!v!ng commonplace" The lens of susta!nable l!v!ng !s help!ng us to dr!ve brands that have a strong purpose !n people’s l!ves, to reduce costs and take waste out of the system and to dr!ve !nnovat!on that w!ll make a pos!t!ve d!fference to the env!ronmental and soc!al challenges fac!ng us all" The Plan pushes us to th!nk ahead, reduc!ng r!sk and mak!ng the bus!ness more res!l!ent for the long term" In 2012 we cont!nued to make good progress del!ver!ng the Plan’s comm!tments" Our factor!es made great str!des !n cutt!ng energy, water and waste" For example all our US operat!ons have moved to purchas!ng the!r energy from cert!f!ed, renewable sources and more than half our s!tes worldw!de have ach!eved zero non-hazardous waste to landf!ll" What makes our comm!tment un!que !s that !t !s across the total value cha!n" We are not only manag!ng our own and upstream operat!ons, but we are also determ!ned to help people to l!ve more susta!nably through the !mpact of our products !n the!r l!ves"We have ma!nta!ned the momentum towards our target of sourc!ng all our agr!cultural raw mater!als susta!nably, reach!ng 36% by the end of 2012" All our palm o!l !s now covered by #reenPalm cert!f!cates" We have made a start !n buy!ng

"HIEFEXE"UTIVEOFFI"ER’S REVIEW

STRATE!Y

3Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 "h#ef Execut#ve Off#cer’s Rev#ew

Th!s !s why we are work!ng w!th organ!sat!ons and !n!t!at!ves such as the $onsumer #oods Forum, the World Bus!ness $ounc!l for Susta!nable Development, the World Econom!c Forum, the Trop!cal Forest All!ance 2020, Refr!gerants, Naturally), the #lobal #reen #rowth Forum and the UN’s Zero Hunger $hallenge and Scal!ng Up Nutr!t!on !n!t!at!ves" Th!s !s also why I agreed to &o!n the UN Secretary #eneral’s H!gh Level Panel to rev!ew the Post-2015 Development Agenda"

LOOKIN! AHEADDesp!te the scale of the task, I bel!eve we are on track to become a susta!nable growth company" But one th!ng !s sure – th!s w!ll not be poss!ble w!thout the ded!cat!on and hard work of our 173,000 colleagues and our many partners around the world" They are demonstrat!ng the power of purpose, mak!ng Un!lever aga!n ‘f!t to w!n’"I hope th!s report g!ves you a good sense of the progress we are mak!ng, and our amb!t!on for the future" Please contact me !f you have comments and suggest!ons that w!ll help us at%Paul_Polman"Susta!nableL!v!ng*un!lever"com

Warm regards

Paul Polman $h!ef Execut!ve Off!cer

traceable o!l" Investment !n a new palm o!l process!ng factory !n Indones!a, work!ng w!th partners and other !n!t!at!ves are all help!ng us to make progress towards our new comm!tment to 100% cert!f!ed susta!nable palm o!l wh!ch !s traceable back to the plantat!ons on wh!ch !t !s grown"We are also help!ng to !mprove the l!vel!hoods of farmers wh!le guarantee!ng future suppl!es, and we w!ll !ncreas!ngly place a spec!al focus on women, due to the mult!pl!er effect we know that women have !n develop!ng soc!et!es" We are work!ng w!th many partners, !nclud!ng w!th Ra!nforest All!ance on tea for L!pton, w!th Barry $allebaut on cocoa for Magnum and w!th vegetable farmers through Knorr’s Susta!nab!l!ty Partnersh!p Fund"Brands that are start!ng to put the!r susta!nable l!v!ng amb!t!on at the heart of the!r propos!t!on not surpr!s!ngly en&oyed strong growth" L!febuoy soap del!vered another year of double-d!g!t growth wh!le scal!ng up !ts handwash!ng campa!gns" Our Brush Day and N!ght oral health campa!gn, wh!ch encourages parents and ch!ldren to adopt good brush!ng hab!ts, reached 49 m!ll!on people and has helped our S!gnal brand grow by 22% s!nce 2008" We see an equal accelerat!on !n susta!nab!l!ty-led !nnovat!ons, such as great-tast!ng low fat margar!nes w!th up to 80% less saturated fat than butter (and less env!ronmental !mpact) and more concentrated detergents"

"HALLEN!ES REMAINWe st!ll face challenges !n some !mportant areas" Scal!ng up to reach 1 b!ll!on people cost-effect!vely w!th hyg!ene programmes that make handwash!ng a hab!t rema!ns a challenge" Equally, we are f!nd!ng that help!ng people to use less hot water and energy when wash!ng, shower!ng and do!ng the laundry !s challeng!ng" We cont!nue to exper!ment w!th ways to tackle th!s, such as detergents wh!ch perform well !n shorter wash cycles, and dry shampoo wh!ch m!ght encourage people to wash the!r ha!r w!th hot water less often"

Through work!ng w!th Oxfam on a study of our bus!ness !n V!etnam over 2011-12 we have ga!ned !mportant !ns!ghts !nto human and labour r!ghts !n our own and our suppl!ers’ operat!ons" The study has !mpl!cat!ons for our global bus!ness" We are !dent!fy!ng how we can promote susta!nable l!vel!hoods for all our workers and those !n our value cha!ns"In areas where b!g breakthroughs are needed, we must step up &o!nt work!ng w!th others" Mak!ng more progress on healthy eat!ng, for example, w!ll requ!re act!on across the !ndustry wh!lst governments w!ll need to take a b!gger lead on act!on to combat cl!mate change and decarbon!se energy suppl!es"Overall !t !s clear that we w!ll need creat!ve as well as sc!ence-based solut!ons !f we are to ach!eve our full amb!t!on by the end of the decade"

WORKIN! WITH PARTNERSPartnersh!ps are key to unlock!ng these solut!ons" So I part!cularly want to thank the partners who are ass!st!ng us to del!ver th!s new bus!ness model% N#Os who are help!ng us to address real !ssues, suppl!ers who are br!ng!ng us solut!ons for susta!nable l!v!ng, and our customers w!th whom we share an amb!t!on to reach consumers at scale"W!th scale comes respons!b!l!ty – so we must cont!nue to play a leadersh!p role !n seek!ng solut!ons for global transformat!onal !ssues l!ke cl!mate change, food secur!ty and poverty allev!at!on"

Our Plan has three b!g goals to ach!eve by 2020%• Help more than 1 b!ll!on people !mprove

the!r health and well-be!ng" • Halve the env!ronmental footpr!nt of

our products"

• Source 100% of our agr!cultural raw mater!als susta!nably and enhance the l!vel!hoods of people across our value cha!n"

THE UNILEVER SUSTAINABLE LIVIN! PLAN

4 Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Our "ompass Strategy

REDUCEENVIRONMENTAL

FOOTPRINT

DOUBLE THEBUSINESS

POSITIVESOCIAL IMPACT

OUR VISION DOUBLE THE SIZE OF THE BUSINESS, WHILST REDU$IN# OUR ENVIRONMENTAL FOOTPRINT AND IN$REASIN# OUR POSITIVE SO$IAL IMPA$TWe w!ll lead for respons!ble growth, !nsp!r!ng people to take small everyday act!ons that w!ll add up to a b!g d!fference"

We w!ll grow by w!nn!ng shares and bu!ld!ng markets everywhere"

OUR "OMPASS

OUR "OMPASSSTRATE!Y

The volat!l!ty and uncerta!nty fac!ng the world rema!n the ‘new normal’ and are set to last for the med!um term" These ongo!ng pressures – econom!c, soc!al and env!ronmental – frame our approach to our bus!ness strategy and our bus!ness model"We call our bus!ness strategy ‘the $ompass’, s!nce !t sets out a constant path for Un!lever for the long term" The $ompass lays out our amb!t!ous v!s!on and purpose, and def!nes four ‘W!nn!ng w!th’ p!llars w!th!n the bus!ness that w!ll help us ach!eve both%

brands and !nnovat!on' marketplace' cont!nuous !mprovement' and people" Our performance aga!nst these p!llars !s expla!ned !n our Annual Report and Accounts 2012" F!rst developed !n 2009, the $ompass was sharpened !n 2012 but !ts core elements rema!ned the same"In 2012 we added our new purpose – “To make susta!nable l!v!ng commonplace”" Th!s bu!lds on the or!g!nal purpose of our 19th century founder, W!ll!am Lever, “to make cleanl!ness commonplace”"

The $ompass g!ves l!fe to our determ!nat!on to bu!ld a susta!nable bus!ness for the long term and to f!nd new ways to operate that do not &ust take from soc!ety and the env!ronment" Th!s !s captured !n the Un!lever Susta!nable L!v!ng Plan (USLP)"

STRATE!Y

5Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Our Bus#ness Model

PROFITABLE VOLUME GROWTHProf!table volume growth !s the bas!s of the v!rtuous c!rcle of growth" Stronger brands and !nnovat!on are the key dr!vers beh!nd !t" $ons!stently strong volume growth bu!lds brand equ!ty as we reach more consumers, more often"

COST LEVERAGE + EFFICIENCYProf!table volume growth allows us to opt!m!se the ut!l!sat!on of our !nfrastructure and spread f!xed costs over a larger number of un!ts produced, reduc!ng the average cost per un!t" It !mproves our prof!tab!l!ty and allows us to !nvest !n the bus!ness"

INNOVATION + MARKETING INVESTMENTLower costs and !mproved eff!c!ency enable us to strengthen our bus!ness further" New and !mproved products are the result of !nvestment !n R&D and, together w!th effect!ve market!ng, strengthen our brand equ!ty" Th!s results !n prof!table volume growth, self-perpetuat!ng the v!rtuous c!rcle of growth"

A VIRTUOUS "IR"LE OF !ROWTH

OUR BUSINESSMODEL

SUSTAINABLE LIVING

PROFITABLEVOLUMEGROWTH

COSTLEVERAGE +EFFICIENCY

INNOVATION +MARKETING INVESTMENT

OUR BRANDS

OUR OPERAT

ION

SOUR PEOPLE

OUR BRANDSStrong brands and !nnovat!on are central to our amb!t!on to double !n s!ze" We are !nvest!ng !n brand equ!ty, f!nd!ng and strengthen!ng the connect!ons between consumers and the products they buy" Where equ!ty !s strong, we are leverag!ng !t – creat!ng eff!c!enc!es by focus!ng on fewer, b!gger pro&ects that enhance marg!ns" And we are seek!ng super!or products wh!ch consumers w!ll prefer, dr!v!ng prof!table growth"

OUR OPERATIONSOn any g!ven day 2 b!ll!on consumers use our products and we want to reach many more, by develop!ng !nnovat!ve products that address d!fferent consumer needs at d!fferent pr!ce po!nts" To do th!s we use our global scale to help del!ver susta!nable, prof!table growth by seek!ng to add value at every step !n the value cha!n by enhanc!ng product qual!ty and customer serv!ce, and roll!ng out !nnovat!ons faster across all markets"

OUR PEOPLESusta!nable, prof!table growth can only be ach!eved w!th the r!ght people work!ng !n an organ!sat!on that !s f!t to w!n, w!th a culture !n wh!ch performance !s al!gned w!th values" We are !ncreas!ngly an ag!le and d!verse bus!ness w!th people mot!vated by do!ng good wh!le do!ng well" We are bu!ld!ng capab!l!ty and leadersh!p among our people and attract!ng some of the best talent !n the market place"

SUSTAINABLE LIVINGFor us, susta!nable, equ!table growth !s the only acceptable bus!ness model" Bus!ness needs to be a regenerat!ve force !n the system that g!ves !t l!fe" For example, by reduc!ng waste, we create eff!c!enc!es and reduce costs, help!ng to !mprove marg!ns wh!le reduc!ng r!sk" Meanwh!le, look!ng at more susta!nable ways of develop!ng products, sourc!ng and manufactur!ng opens up opportun!t!es for !nnovat!on wh!le !mprov!ng the l!vel!hoods of our suppl!ers"

Our bus!ness model !s des!gned to del!ver susta!nable growth# For us, susta!nab!l!ty !s !ntegral to how we do bus!ness# In a world where temperatures are r!s!ng, water !s scarce, energy !s expens!ve, san!tat!on !s poor !n many areas and food suppl!es are uncerta!n and expens!ve, we have both a duty and an opportun!ty to address these !ssues !n the way we do bus!ness#

The !nputs to the model, l!ke those of all ma&or packaged goods manufacturers, are threefold% brands' people' and operat!ons" These map d!rectly on to our $ompass ‘W!nn!ng w!th’ p!llars – both cont!nuous !mprovement and the market place p!llars support the operat!ons strand of the model" The d!fferent!ator !n our bus!ness model !s our USLP and the goal of susta!nable l!v!ng"

The outputs of the model are threefold% susta!ned growth' lower env!ronmental !mpact' and pos!t!ve soc!al !mpact" These al!gn d!rectly w!th our v!s!on statement"The d!agram below represents our v!rtuous c!rcle of growth" It summar!ses, s!mply, how we der!ve prof!t from the appl!cat!on of our bus!ness model"

EMBEDDIN!SUSTAINABILITY

6 Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Embedd#ng Susta#nab#l#ty

In order to real!se susta!nable growth, we are !ntegrat!ng susta!nab!l!ty !nto our strategy, brands and !nnovat!on# We are work!ng w!th our customers and suppl!ers, engag!ng employees and forg!ng new partnersh!ps#

OUR BUSINESS STRATE!Y W!th 7 b!ll!on people on our planet, the earth’s resources can be stra!ned" Th!s means susta!nable, equ!table growth !s the only acceptable model of growth for our bus!ness" We bel!eve growth and susta!nab!l!ty are not !n confl!ct" In fact, !n our exper!ence, susta!nab!l!ty dr!ves growth"

By focus!ng on susta!nable l!v!ng needs, we can bu!ld brands w!th a s!gn!f!cant purpose" By reduc!ng waste, we create eff!c!enc!es and reduce costs, wh!ch helps to !mprove our marg!ns" By tak!ng

a long-term v!ew, we can reduce r!sk, for example secur!ng raw mater!al supply through susta!nable sourc!ng" And we have found that once we start look!ng at product development, sourc!ng and manufactur!ng through a susta!nab!l!ty lens, !t opens up great opportun!t!es for !nnovat!on" Our product category and funct!onal teams are play!ng a central role !n dr!v!ng susta!nable growth" They rev!ew progress aga!nst the!r targets quarterly" And !n 2012 we asked our bus!nesses !n our largest markets to !dent!fy a small number of pr!or!ty areas where they can harness the Plan to dr!ve growth, such as handwash!ng w!th L!febuoy soap !n Ind!a and the Dove Self-Esteem Pro&ect !n the US" We are l!nk!ng progress to reward w!th susta!nable bus!ness goals !n the remunerat!on of a grow!ng number of managers" Th!s !ncludes the $EO and several members of the Un!lever Leadersh!p Execut!ve" We have susta!nab!l!ty champ!ons cover!ng every key funct!on, category and country"

BRANDS AND INNOVATIONWe are accelerat!ng the !ntegrat!on of susta!nab!l!ty !nto our brands" Brands are develop!ng the!r own USLP amb!t!on – for example Knorr has chosen susta!nable sourc!ng" Our Brand Impr!nt model enables us to take a 360-degree v!ew of the soc!al, env!ronmental and econom!c !mpacts of brands and – among other outputs – tr!ggered L!pton’s dec!s!on to source !ts tea susta!nably" We are now apply!ng the methodology to help brands make a

susta!nable bus!ness contr!but!on !n l!ne w!th the!r pos!t!on!ng" S!m!larly, our F!ve Levers for $hange methodology !s help!ng our brands prompt consumers to adopt new behav!ours (see page 15)" Innovat!on !s cr!t!cal to ach!ev!ng our susta!nable l!v!ng goals" We are comm!tt!ng a s!gn!f!cant proport!on of our R&D budget to f!nd!ng susta!nab!l!ty-led technolog!es" We are also support!ng the commerc!al!sat!on of !nnovat!ve technolog!es through our !nvestment arm, Un!lever Ventures"In 2012 our Open Innovat!on team launched an onl!ne system wh!ch offers outs!de experts the chance to work w!th Un!lever on research pro&ects !n a number of areas that w!ll promote susta!nable l!v!ng, such as cold-water wash laundry products" We have rece!ved 150 subm!ss!ons rang!ng from packag!ng des!gn to energy-eff!c!ent processes" We have updated the tools we use to evaluate the env!ronmental !mpacts of new products and packag!ng, known as Innovat!on Process Management" We use a s!mple traff!c l!ght system to compare the potent!al !mpacts of an !nnovat!on w!th the products we currently market as well as the !mpacts on our category portfol!o"

THE MARKETPLA"EMany reta!lers have susta!nab!l!ty goals" For the last three years we have worked on A Better Future Starts at Home, a &o!nt shopper programme w!th Tesco" It comb!nes adv!ce on susta!nable l!v!ng w!th promot!ons of susta!nable products" N!ne countr!es from the UK to $h!na have run the programme"

INVESTING IN SUSTAINABLE BUSINESSThrough Un!lever Ventures, we are !nvest!ng !n early and m!d-stage compan!es w!th new technolog!es and compell!ng bus!ness models that are of strateg!c relevance to Un!lever" Susta!nable bus!ness !s a key factor !n th!s m!x" Our portfol!o !ncludes a number of !nnovat!ve start-ups from the green tech and low-carbon sectors, such as Recyclebank (see page 37)" In 2013 we are launch!ng a new Susta!nable Bus!ness Venture Fund w!th (50 m!ll!on allocated to !nvestment !n new bus!nesses wh!ch spec!f!cally support our USLP goals"

INNOVATION IN MANUFACTURINGMany employees have susta!nable bus!ness !deas and our Manufactur!ng team has set up a Small Act!ons, B!g D!fference budget to make them happen" Factory employees can apply for !nvestment for the!r !deas wh!ch are evaluated on the bas!s of env!ronmental benef!t and f!nanc!al return" In 2012 over 600 pro&ects were !dent!f!ed and the best 100 w!ll be !mplemented !n 2013" The!r comb!ned benef!ts w!ll del!ver sav!ngs of around 1% of our global energy and water use and ach!eve an average pay back of under two years"

SUSTAINABLE LIVING

INNOVATION +MARKETINGINVESTMENT

SUST

AINABILITY!LED GROWTH

LESS WASTE, LESS RISK

SUSTAINABLE INNOVATION& COLLABORATION

PROFITABLEVOLUMEGROWTH

COSTLEVERAGE +EFFICIENCY

STRATE!Y

7Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Embedd#ng Susta#nab#l#ty

In 2012 we launched a &o!nt programme w!th Walmart, The L!v!ng Pro&ect, that w!ll help 200 m!ll!on shoppers every week make susta!nable cho!ces" So far !t has been !mplemented !n Braz!l, $h!na and the US"

WORKIN! WITH OUR SUPPLIERSIn 2011 Un!lever launched a programme called Partner to W!n, to work more closely w!th !ts key suppl!ers, !nclud!ng on susta!nable pract!ces" In part!cular, we are develop!ng partnersh!ps w!th our agr!cultural raw mater!al suppl!ers to ach!eve our susta!nable sourc!ng goal" For example, we establ!shed the Knorr Susta!nab!l!ty Partnersh!p Fund to support vegetable suppl!ers on complex susta!nable agr!culture pro&ects that they are unable to tackle alone"

PEOPLEOur v!s!on of creat!ng a susta!nable bus!ness !s mot!vat!ng for employees, but !t !s not always clear to them how to apply !t to the!r role" We !ntegrate susta!nab!l!ty !nto ex!st!ng tra!n!ng and have created bespoke tra!n!ng, for example, new brand managers engage !n a week-long susta!nable market!ng challenge dur!ng the!r foundat!on course"

"OLLABORATION WITH PARTNERSHIPS #lobal !ssues such as deforestat!on, water scarc!ty and under-nutr!t!on are too complex for any s!ngle organ!sat!on to tackle alone" We are engag!ng w!th governments to create an env!ronment !n wh!ch the b!g susta!nab!l!ty challenges can be tackled" At the UN $onference on Susta!nable Development !n R!o !n 2012 we urged collaborat!on to agree Susta!nable

Development #oals to succeed the M!llenn!um Development #oals" Our $EO was subsequently !nv!ted to &o!n the UN Secretary #eneral’s H!gh Level Panel to rev!ew the post-2015 Development Agenda" We recogn!se the scale of change that !s needed and we are stepp!ng up our engagement !n mult!-sector and cross-sector stakeholder groups, such as the Trop!cal Forest All!ance 2020, Refr!gerants, Naturally) and the Roundtable on Susta!nable Palm O!l" We take part !n !n!t!at!ves such as the World Econom!c Forum’s New V!s!on for Agr!culture and the UN’s Scal!ng up Nutr!t!on (SUN) and Zero Hunger $hallenge wh!ch tackle the challenge of h!gh levels of under-nutr!t!on and hunger !n the world"

UNILEVER FOUNDATIONEstabl!shed !n 2012, the Un!lever Foundat!on’s m!ss!on !s to !mprove the qual!ty of l!fe for commun!t!es through the prov!s!on of hyg!ene, san!tat!on, access to clean dr!nk!ng water and bas!c nutr!t!on, and by enhanc!ng self-esteem"Work!ng w!th f!ve partners – Oxfam, PSI (Populat!on Serv!ces Internat!onal), Save the $h!ldren, UNI$EF and the World Food Programme (WFP) – the Foundat!on !s develop!ng programmes des!gned to grow the bus!ness and support the USLP’s goal to help more than 1 b!ll!on people take act!on to !mprove the!r health and well-be!ng"

TROPICAL FOREST ALLIANCE 2020Un!lever has led the process of bu!ld!ng the Trop!cal Forest All!ance 2020, a publ!c-pr!vate partnersh!p between the US government and the $onsumer #oods Forum ($#F)" The $#F !s a large !ndustry body made up of almost all the ma&or reta!l and consumer goods compan!es !n the world, w!th revenues amount!ng to more than $3 tr!ll!on" The Trop!cal Forest All!ance 2020 was announced at the R!o+20 summ!t" It a!ms to reduce and eventually el!m!nate the deforestat!on assoc!ated w!th the sourc!ng of commod!ty crops such as soy, palm o!l, beef, pulp and paper" The Dutch and Norweg!an governments have s!gned up and compan!es, N#Os and other governments w!ll be !nv!ted to &o!n" The Indones!an government !s co-host!ng a workshop on the palm and paper value cha!ns !n 2013"

UNILEVER’S #REENHOUSE #AS FOOTPRINT (SEE PA#E 25)

• Spans our ent!re portfol!o of brands and all countr!es !n wh!ch we sell our products" • Has a soc!al and econom!c d!mens!on – our products make a d!fference to health and

well-be!ng, and our extended supply cha!n supports the l!vel!hoods of many people"• When !t comes to the env!ronment, we work across the whole value cha!n – from the

sourc!ng of raw mater!als to the way consumers use our products"

THREE KEY FEATURES OF OUR PLAN

WE WORK A"ROSS THE VALUE "HAIN

+ + + +

25% 4% 2% 1%68%

Raw mater"als Manufacture Transport $onsumer use D"sposal

8

OPERATIONALHI!HLI!HTS

* Further deta!ls of our key f!nanc!al !nd!cators can be found !n our Annual Report and Accounts 2012"† These key non-f!nanc!al !nd!cators form part of the Un!lever Susta!nable L!v!ng Plan" + Measured January-September 2012" In 2012 we moved to full volume-based (tonnes sold) report!ng for th!s target" Th!s number !s not comparable to prev!ously

reported numbers measured by product (stock keep!ng un!t), see page 20"†† NAMET refers to North Afr!ca, M!ddle East and Turkey' AMET refers to Afr!ca, M!ddle East and Turkey' and RUB refers to Russ!a, Ukra!ne and Belarus"

6%9%2011& 6%5%

71 m"ll"on2011& 34%5 m"ll"on

3%85kg2011& 4%96kg

3%4%2011& 1%6%

80%'

2011& See ' below

100%2011& 64%

13%8%2011& 13%5%

99%97kg2011& 118%31kg

48,0002011& 45,000

(4%3 b"ll"on2011& (3%1 b"ll"on

2%23m3

2011& 2%40m3

1%162011& 1%27 per 1m hours worked

per 1m hours worked

UNDERLYIN! SALES !ROWTH

HEALTH AND HY!IENE% People reached w#th L#febuoy handwash#ng programmes

WASTE% Total waste per tonne of product#on

UNDERLYIN! VOLUME !ROWTH

NUTRITION% Portfol#o by volume meet#ng salt levels equ#valent to 5 g per day

SUSTAINABLE SOUR"IN!% Palm o#l purchases from susta#nable sources

"ORE OPERATIN! MAR!IN

!REENHOUSE !ASES% "O2 from energy per tonne of product#on

BETTER LIVELIHOODS% Number of Shakt# entrepreneurs (cumulat#ve s#nce 2010)

FREE "ASH FLOW

WATER% Water per tonne of product#on

PEOPLE% Total recordable acc#dentfrequency rate

KEY FINAN"IAL INDI"ATORS*

KEY NON&FINAN"IAL INDI"ATORS†

In 2012, we cont!nued to make good progress !n the transformat!on of Un!lever to a susta!nable growth company# We exceeded %50 b!ll!on turnover, w!th all reg!ons and categor!es contr!but!ng to growth# Desp!te further cost !ncreases and volat!le commod!ty markets, our gross marg!n rose by 0#1 percentage po!nts and our core operat!ng marg!n by 0#3 percentage po!nts, reflect!ng the d!sc!pl!ned !mplementat!on of our strategy#

• Turnover !s up 10"5% at (51"3 b!ll!on w!th net acqu!s!t!ons contr!but!ng 1"1% and currency changes 2"2%

• Underly!ng sales growth of 6"9% !s well balanced between volume +3"4% and pr!ce +3"3%

• Emerg!ng markets grew underly!ng sales by 11"4%, now represent!ng 55% of turnover

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Operat#onal H#ghl#ghts

STRATE!Y

On any g"ven day

2 b#ll#onconsumers worldw"de use a Un"lever product

Around

173,000employees at the end of 2012

Turnover of

'51 b#ll#onfor 2012

Products sold "n over

190countr"es worldw"de

Asia/AMET/RUB††

• Turnover (20"4 b!ll!on • Underly!ng sales growth 10"6%• Underly!ng volume growth 5"7%

The Americas• Turnover (17"1 b!ll!on • Underly!ng sales growth 7"9%• Underly!ng volume growth 3"1%

Europe• Turnover (13"9 b!ll!on • Underly!ng sales growth 0"8%• Underly!ng volume growth 0"9%

OUR !EO!RAPHI"AL AREAS

9

HOME CAREREFRESHMENT

OUR "ATE!ORIES

• Turnover (18"1 b!ll!on • Underly!ng sales

growth 10"0%• Underly!ng volume

growth 6"5%• Market shares !ncreased

across geograph!es, w!th strong ga!ns !n Lat!n Amer!ca, NAMET & RUB†† and North Amer!ca' dr!ven by ha!r care, deodorants and sk!n cleans!ng



growth 6"2%• Market share ga!ns

were dr!ven by powerful performance !n nearly all our markets' !n laundry !n part!cular !n Europe, $h!na and South Afr!ca



growth (0"9)%• Market shares were down

sl!ghtly, reflect!ng a m!xed performance w!th volume ga!ns !n dress!ngs, offset by decl!nes !n savoury and volume share stab!l!sat!on !n spreads



growth 2"4%• Market shares were

sl!ghtly down overall, reflect!ng pr!ce aggress!ve compet!t!on !n !ce cream !n developed markets

PERSONAL CARE

HOME CARE

FOODS

REFRESHMENT

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Operat#onal H#ghl#ghts

http://WWW.UNILEVER.COM/INVESTORRELATIONS

We w!ll cont!nually work to !mprove the taste and nutr!t!onal qual!ty of all our products" By 2020 we w!ll double the proport!on of our portfol!o that meets the h!ghest nutr!t!onal standards, based on globally recogn!sed d!etary gu!del!nes" Th!s w!ll help hundreds of m!ll!ons of people to ach!eve a health!er d!et"

18% OF OUR PORTFOLIO BY VOLUME MET THE $RITERIA FOR HI&HEST NUTRITIONAL STANDARDS IN 2012

Reduce salt levels

Saturated fat% 92 Reduce saturated fat 92 Increase essent!al fatty ac!ds

Remove trans fat

Reduce sugar

Reduce calor!es

Improve heart health

Prov!de healthy eat!ng !nformat!on

Improve employee health and nutr!t!on

2 NUTRITION1 HEALTH AND HY&IENE

By 2020 we w!ll help more than a b!ll!on people to !mprove the!r hyg!ene hab!ts and we w!ll br!ng safe dr!nk!ng water to 500 m!ll!on people" Th!s w!ll help reduce the !nc!dence of l!fe-threaten!ng d!seases l!ke d!arrhoea"

224 MILLION PEOPLE REA$HED BY END 2012

Reduce d!arrhoeal and resp!ratory d!sease through handwash!ng

Prov!de safe dr!nk!ng water

Improve oral health

Improve self-esteem

Reduce workplace !n&ur!es and acc!dents

3 &REENHOUSE &ASES

Halve the greenhouse gas !mpact of our products across the l!fecycle by 2020"*

OUR &REENHOUSE &AS IMPA$T PER $ONSUMER USE HAS REDU$ED BY AROUND 6% SIN$E 2010*

Reduce #H# from sk!n cleans!ng and ha!r wash!ng

Reduce #H# from wash!ng clothes% $oncentrat!on Reformulat!on $onsumer behav!our

Reduce #H# from manufactur!ng% $O2 from energy Renewable energy New factor!es

Reduce #H# from transport

Reduce #H# from refr!gerat!on

Reduce energy consumpt!on !n our off!ces

Reduce employee travel

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Un#lever Susta#nable L#v#ng Plan #n 201210

UNILEVERSUSTAINABLELIVIN! PLANIN 2012

The Un!lever Susta!nable L!v!ng Plan (USLP) sets out to decouple our growth from our env!ronmental !mpact, wh!le at the same t!me !ncreas!ng our pos!t!ve soc!al !mpact" It has three b!g goals to ach!eve by 2020 – to !mprove health and well-be!ng, reduce env!ronmental !mpact and source 100% of our agr!cultural raw mater!als susta!nably and enhance the l!vel!hoods of people across our value cha!n"Support!ng these goals are seven comm!tments underp!nned by targets spann!ng our soc!al, env!ronmental and econom!c performance across the value cha!n – from the sourc!ng of raw mater!als all the way through to the use of our products !n the home"†

In the second year of our Plan, we made steady progress towards our goals" Our USLP !s amb!t!ous and we have much more to do" We cont!nue to str!ve to del!ver our stretch!ng goals"

† In our 2011 Progress Report we presented our people and workplace targets as a standalone set of targets" In 2012 we !ncorporated these targets !nto the ma!n body of the Plan"

* Throughout th!s document our env!ronmental targets are expressed on a ‘per consumer use’ bas!s" Th!s means a s!ngle use, port!on or serv!ng of a product (see page 53)" We have taken a l!fecycle approach w!th a basel!ne of 2008"

+ In seven water-scarce countr!es represent!ng around half the world’s populat!on (see page 53)"

By 2020 we w!ll help more than a b!ll!on people take act!on to !mprove the!r health and well-be!ng#We est"mate that we helped 224 m"ll"on people take act"on to "mprove the"r health and well-be"ng%

IMPROVIN& HEALTH AND WELL-BEIN&

Key

Ach!eved

On-plan

Off-plan

% of target ach!eved

Note Our most mater!al targets are shaded

STRATE!Y

5 WASTE

Halve the waste assoc!ated w!th the d!sposal of our products by 2020"*

OUR WASTE IMPA$T PER $ONSUMER USE HAS REDU$ED BY AROUND 7% SIN$E 2010*

Reduce packaging

Recycle packag!ng% Increase recycl!ng and recovery rates Increase recycled content

Reuse packag!ng

Tackle sachet waste

Reduce waste from manufactur!ng%

Reduce total waste Zero non-hazardous waste

to landf!ll New factor!es

99 El!m!nate PV$

Reduce off!ce waste% Recycle, reuse, recover Reduce paper consumpt!on El!m!nate paper !n processes

4 WATER

Halve the water assoc!ated w!th the consumer use of our products by 2020"* +

OUR WATER IMPA$T PER $ONSUMER USE HAS REMAINED BROADLY UN$HAN&ED SIN$E 2010*

Reduce water use !n the laundry process% Easy r!nse products Products that use less water

Reduce water use !n sk!n cleans!ng and ha!r wash!ng

Reduce water use !n agr!culture

Reduce water use !n manufactur!ng process% Reduce abstract!on New factor!es

6 SUSTAINABLE SOUR$IN&

By 2020 we w!ll source 100% of our agr!cultural raw mater!als susta!nably"

36% OF A&RI$ULTURAL RAW MATERIALS SUSTAINABLY SOUR$ED BY END 2012

Palm o!l% Susta!nable Traceable

Paper and board

Soy beans and soy o!l

Tea

Fru!t

Vegetables

$ocoa

Sugar

Sunflower o!l

Rapeseed o!l

Da!ry

Fa!rtrade Ben & Jerry’s

$age-free eggs

Increase susta!nable sourc!ng of off!ce mater!als

7 BETTER LIVELIHOODS

By 2020 we w!ll engage w!th at least 500,000 smallholder farmers and 75,000 small-scale d!str!butors !n our supply network"

450,000 SMALLHOLDER FARMERS TRAINED' SMALLHOLDERS’ METRI$ IN DEVELOPMENT' 48,000 SMALL(S$ALE SHAKTI DISTRIBUTORS BY END 2012

Smallholder farmers

Small-scale d!str!butors

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Un#lever Susta#nable L#v#ng Plan #n 2012 11

By 2020 our goal !s to halve the env!ronmental footpr!nt of the mak!ng and use of our products as we grow our bus!ness#*Our greenhouse gas and waste impacts per consumer use have reduced and our water impact per consumer use has remained broadly unchanged.*

REDU$IN& ENVIRONMENTAL IMPA$T

By 2020 we w!ll enhance the l!vel!hoods of hundreds of thousands of people as we grow our bus!ness# We have trained around 450,000 smallholder farmers.

ENHAN$IN& LIVELIHOODS

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Health and Hyg#ene

HEALTH AND HY!IENEIMPROVIN# HY#IENEAND PROMOTIN#WELL,BEIN#

1

12

PRO!RESS ON THE PLAN

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Health and Hyg#ene

By 2020, we w"ll help more than a b"ll"on people to "mprove the"r hyg"ene hab"ts and we w"ll br"ng safe dr"nk"ng water to 500 m"ll"on people% Th"s w"ll help reduce the "nc"dence of l"fe-threaten"ng d"seases l"ke d"arrhoea%

HEALTH AND HYGIENE

THE BIGGEST CHALLENGE WE FACE IS TO SCALE UP PROGRAMMES COST&EFFECTIVELY.

224 m"ll"on people reached by end 2012% 119 m"ll"on people w"th L"febuoy! 45 m"ll"on w"th safe dr"nk"ng water

from Pure"t! 49 m"ll"on w"th our toothpaste brands! and 11 m"ll"on through Dove Self-Esteem programmes%

13

OUR PERSPE"TIVE Poor hyg!ene, lack of safe dr!nk!ng water and poor san!tat!on are the cause of m!ll!ons of preventable deaths" These !ssues are closely !nterconnected" Ev!dence shows that !nd!v!duals w!ll be health!er and commun!t!es more product!ve !f they have access to clean water and better san!tat!on and !f they adopt !mproved hyg!ene pract!ces"Un!lever brands can play an !mportant role here" We make effect!ve, affordable products that !mprove health, hyg!ene and well-be!ng" As one of the world’s lead!ng consumer goods compan!es, we can use our expert!se !n market!ng and del!ver!ng campa!gns to reach large, d!verse populat!ons and ach!eve a last!ng !mpact on everyday behav!ours"

One brand wh!ch demonstrates th!s !s L!febuoy soap" It !s also one of Un!lever’s fastest-grow!ng brands – !t has ach!eved double d!g!t-growth over 2010-12" It !s a good example of how brands that help to address soc!al challenges can bu!ld brand equ!ty and grow the!r bus!ness" We have made good progress towards our goal" L!febuoy and Dove have extended ex!st!ng partnersh!ps and developed new ones" Our oral care brands are set to meet the!r target much earl!er than planned" We have also ga!ned a better understand!ng of the !mpact of our handwash!ng programmes" We have also started to explore how we can develop a more systemat!c approach to water, san!tat!on and hyg!ene !ssues by

p!lot!ng a san!tat!on programme between our Domestos to!let cleaner brand and partners UNI$EF and the World To!let Organ!zat!on" Th!s w!ll help us to take a more &o!ned-up approach to !mprov!ng health through a concerted effort around clean water, san!tat!on and hyg!ene !n future" The b!ggest challenge we face across all our programmes !s to scale up cost-effect!vely" Form!ng the r!ght partnersh!ps w!th governments, N#Os and other experts !s help!ng us" But to reach our amb!t!ous targets, we need to move faster to w!despread !mplementat!on"

TAR!ET SUMMARYAch!eved% 0 On-plan% 5 Off-plan% 0 % of target ach!eved% 0


HEALTH AND HY!IENE1

During 2012 Lifebuoy launched handwashing programmes in seven new countries: Egypt, Ghana, Nigeria, South Sudan, Uganda, Zambia and Zimbabwe. Our behaviour change programmes are now running in 16 countries, reaching eight of the top ten countries most affected by child mortality.

LIFEBUOY TARGETS COUNTRIES WITH HIGH CHILD MORTALITY

OUR TAR!ETS • By 2015, our L!febuoy brand a!ms

to change the hyg!ene behav!our of 1 b!ll!on consumers across As!a, Afr!ca and Lat!n Amer!ca by promot!ng the benef!ts of handwash!ng w!th soap at key t!mes"

OUR PERFORMAN"E 119 m!ll!on people reached s!nce

2010, of whom 71 m!ll!on were reached !n 2012"†

OUR PERSPE"TIVEThe ma&or challenge we face !s scal!ng up our handwash!ng programmes cost- effect!vely" S!nce 2010, we have made strong progress, develop!ng models wh!ch more than halve the cost" We have expanded the programme to 16 countr!es !n 2012 and have reached f!ve t!mes as many people as we d!d !n 2010" Our most s!gn!f!cant expans!on !s !n Afr!ca where programmes are now runn!ng !n n!ne countr!es, reach!ng more than 11 m!ll!on people !n 2012, compared to 400,000 over 2010-11" Th!s has contr!buted to L!febuoy’s cont!nued double-d!g!t bus!ness growth !n 2012"Partnersh!ps w!th N#Os and government are cr!t!cal – by tapp!ng !nto ex!st!ng on-ground networks and expert!se we can reduce costs and reach more people" In Afr!ca, Un!lever Foundat!on partner PSI (Populat!on Serv!ces Internat!onal) and the M!llenn!um V!llages Pro&ect are help!ng us to adapt our programmes for d!fferent contexts" In Ind!a we are work!ng w!th the government and Foundat!on partner UNI$EF to promote handwash!ng !n Madhya Pradesh and !n Afr!ca and South As!a, w!th Water & San!tat!on for the Urban Poor" These partnersh!ps are also bu!ld!ng local capab!l!t!es to susta!n the programmes for the long term" We cont!nue to evaluate !mpact" In Indones!a we conducted a quant!tat!ve study w!th TNS, a market research company, to assess !mpact when the programme

REDU"E DIARRHOEAL AND RESPIRATORY DISEASE THROU!H HANDWASHIN!

14

L!febuoy has amb!t!ous plans to scale up the reach of !ts school hyg!ene promot!on programmes !n Afr!ca" However, !n some countr!es the brand has been launched or re-!ntroduced only recently and !s st!ll a relat!vely small brand" A mult!-brand programme !s more cost-eff!c!ent and !s an opportun!ty to connect people to more of our brands that have a soc!al !mpact" Our $entral Afr!can bus!ness and L!febuoy have p!loted a programme w!th our $lose Up toothpaste and Blue Band margar!ne brands !n N!ger!a and an external partner, D"l!te, wh!ch produces solar lanterns to enable ch!ldren to do homework after dark" The 21-day programme uses mult!ple classroom contacts to help ch!ldren pract!se new behav!ours% handwash!ng w!th soap, brush!ng teeth day and n!ght, and eat!ng well" We have been able to reduce our cost per contact s!gn!f!cantly by shar!ng costs across brands" The programme has huge potent!al for roll-out !n other countr!es !n Afr!ca" Schools, governments and N#Os support th!s approach as, by promot!ng a number of healthy behav!ours together, !t has the potent!al to del!ver s!gn!f!cant health !mpact at lower cost"

Some commun!t!es can be d!ff!cult and costly for L!febuoy to reach by !tself" We are collaborat!ng w!th the M!llenn!um V!llages Pro&ect to promote handwash!ng w!th soap !n rural commun!t!es across Afr!ca"The pro&ect w!ll enable us to adapt our current handwash!ng programme and advocacy to th!s sett!ng, reach!ng 475,000 people across ten countr!es by 2015" Our a!m !s to work together to develop scalable, cost-effect!ve water, san!tat!on and hyg!ene !ntervent!ons wh!ch can then be rolled out at nat!onal level and to new countr!es, !mprov!ng health through better hyg!ene"The f!rst 28 days of l!fe !s the per!od when ch!ldren are most vulnerable to d!sease and !nfant mortal!ty !s h!ghest" Every year an est!mated 3"6 m!ll!on newborn bab!es d!e !n the f!rst month of the!r l!ves" S!mple, low-cost health !ntervent!ons such as handwash!ng w!th soap can reduce th!s f!gure by up to 44%" In Indones!a we have developed a new partnersh!p w!th USAID and the Maternal and $h!ld Health Integrated Program to reach new mothers and b!rth attendants w!th hyg!ene educat!on"

REACHING NEW COMMUNITIES A LOWER&COST MODEL

FOR OUR SCHOOLS’ PROGRAMMES

!s run at scale" We found that handwash!ng w!th soap at key occas!ons !ncreased s!gn!f!cantly after the schools’ hyg!ene promot!on programme" Soap use !ncreased from 53% to 75%" Th!s !ncrease was susta!ned at the same level more than s!x months after the programme ended"

† To be !ndependently assured by Pw$ !n 2013, see page 52"

http://www.youtube.com/watch?v=Jzb4VC9Wyd0%20



Pure!t offers a range of !n-home water pur!f!ers that prov!de water ‘as safe as bo!led’ – w!thout the need for electr!c!ty or a pressur!sed water supply – by remov!ng harmful v!ruses, bacter!a and paras!tes"Pure!t offers env!ronmental benef!ts too% our deta!led l!fecycle analys!s shows that !ts total carbon footpr!nt !s at least 80% lower than bo!led or bottled water"

SAFE DRINKING WATER

15

Encouraging people to adopt new behaviours is essential if we are to achieve our goals. Underpinning our approach is our model of behaviour change, Unilever’s Five Levers for Change – a set of principles which, if applied consistently, increases the likelihood of creating a lasting impact. We first used this model to develop our behaviour change programmes with Lifebuoy soap and our oral care brands. We have learned a great deal through our health and hygiene campaigns and we are now applying the methodology to improve our performance in other areas, for example we are using it to understand how we can motivate consumers to reduce their salt intake.

OUR FIVE LEVERS FOR CHANGE MODEL More than 2,000 children die every day

from diarrhoea, which is linked, among other things, to a lack of clean toilets for over 2 billion people worldwide.In November 2012, Domestos and our partner, the World Toilet Organization, opened the world’s first ‘Domestos toilet academies’ in Vietnam, the first stage in a global programme to train local entrepreneurs to set up hygienic toilet businesses. The academies leverage the ’SaniShop’ business model developed and proven by the World Toilet Organization in Cambodia. Training local entrepreneurs to supply latrines, toilet cleaner and sanitation education is an innovative market-based model which creates demand for improved sanitation within local communities and provides jobs.

DOMESTOS TACKLES SANITATION CRISIS

OUR TAR!ETS • We a!m to make safe dr!nk!ng water

ava!lable and affordable to 500 m!ll!on people through our Pure!t !n-home water pur!f!er by 2020"

OUR PERFORMAN"E 45 m!ll!on people have ga!ned access

to safe dr!nk!ng water from Pure!t s!nce !ts launch !n 2005, of whom 10 m!ll!on were reached !n 2012"†

OUR PERSPE"TIVEThe lack of safe dr!nk!ng water !s a ma&or publ!c health !ssue, part!cularly !n develop!ng countr!es where around 80% of d!seases are water borne" An !ndependent study has shown that Pure!t can reduce the !nc!dence of d!arrhoeal d!sease by up to 50%"*Dur!ng 2012 Pure!t focused on d!str!but!on expans!on !n ex!st!ng markets – Ind!a, Bangladesh, Indones!a, Mex!co and Braz!l – and also launched !n new markets such as Sr! Lanka and N!ger!a" Expans!on !n Ind!a was the b!ggest contr!butor to performance !n 2012, where consumers have been attracted to our w!der product range"The most affordable model costs (20 (1,400 rupees) !n Ind!a" We are work!ng w!th a range of m!crof!nance and N#O partners to !mprove the affordab!l!ty of the pur!f!er for those for whom the pr!ce rema!ns a barr!er to purchase" Our amb!t!on to reach 500 m!ll!on people rema!ns demand!ng" To ach!eve our target we plan to expand !nto more new markets !n Afr!ca, wh!le cont!nu!ng to grow !n ex!st!ng markets"

† To be !ndependently assured by Pw$ !n 2013, see page 52"* Random!sed tr!al by the Nat!onal Inst!tute of Ep!dem!ology,

based on 430 ch!ldren !n $henna!, Ind!a, 2005-06"

PROVIDE SAFE DRINKIN! WATER


Poor oral health !s a w!despread problem !n Indones!a" Th!s leads to tooth decay and, !n some cases, more ser!ous !llnesses" In 2009 Un!lever collaborated w!th PD#I (the Indones!an Dental Assoc!at!on) to !n!t!ate the Brush Day and N!ght campa!gn"The campa!gn’s cons!stent messages across mult!ple channels are help!ng people to change the!r hab!ts" In 2012, Indones!ans used 7% more toothpaste than !n 2011, !nd!cat!ng a gradual !ncrease !n toothbrush!ng" Brand equ!ty has also strengthened" By offer!ng parents effect!ve products and by help!ng them to pass on the hab!t of brush!ng day and n!ght, we have !ncreased the proport!on of people who rate Pepsodent as ‘the most effect!ve toothpaste’"

BUILDING BRANDS

OUR TAR!ETSW!th our Dove brand we are help!ng m!ll!ons of young people to !mprove the!r self-esteem through educat!onal programmes"

• By 2015 we a!m to have helped 15 m!ll!on young people"

OUR PERFORMAN"E Over 11 m!ll!on young people have

rece!ved our help s!nce 2005" Over 2 m!ll!on part!c!pated !n the programme !n 16 countr!es !n 2012"

OUR PERSPE"TIVEDove !s comm!tted to help!ng women look and feel the!r best" It has made good progress !n help!ng to ra!se the self-esteem of m!ll!ons of young people worldw!de and !s on track to meet !ts target" In 2012 Dove redes!gned !ts self-esteem programme to cap!tal!se better on med!a and educat!onal !nnovat!on and reach more g!rls w!th a greater !mpact wh!le reduc!ng the costs for each !ntervent!on"The redes!gned programme – now called the Dove Self-Esteem Pro&ect – !s launch!ng !n early 2013" We have worked w!th experts to make the programme content more r!gorous and engag!ng" Develop!ng global partnersh!ps as well as creat!ng local commun!t!es of advocates among mothers and teachers w!ll help Dove reach more people" It !s d!ff!cult to measure changes !n att!tude" We are partner!ng w!th academ!c thought leaders !n the US and the UK to conduct stud!es to track the longer-term !mpact of our programme"

IMPROVE SELF&ESTEEM

OUR TAR!ETS • We w!ll use our toothpaste and

toothbrush brands and oral health !mprovement programmes to encourage ch!ldren and the!r parents to brush day and n!ght" We a!m to change the behav!our of 50 m!ll!on people by 2020"

OUR PERFORMAN"E 49 m!ll!on people reached s!nce 2010, of whom 4"7 m!ll!on were reached !n 2012"

OUR PERSPE"TIVEOur Brush Day and N!ght campa!gns have proved very effect!ve and we are set to ach!eve our target early" Many add!t!onal countr!es ran the campa!gn after observ!ng the strong l!nk between the campa!gn’s soc!al !mpact and bus!ness growth, help!ng us to reach more people than ant!c!pated" The campa!gns, wh!ch focus on brush!ng tw!ce a day w!th fluor!de toothpaste, were extended to new countr!es such as $ôte d’Ivo!re !n 2012" $ountr!es w!th ex!st!ng programmes such as Indones!a and France saw an !mprovement !n brush!ng frequency and an !ncrease !n market share and sales growth follow!ng the campa!gn" In France the oral care market has grown by nearly 5% over 2009-12 and sales of our S!gnal brand !ncreased by nearly 7% over 2009-12, and by 4% !n 2012 alone"We cont!nue to work !n a global partnersh!p w!th the FDI World Dental Federat!on" In 2012, 28 local oral health promot!on pro&ects w!th nat!onal dental assoc!at!ons focused on commun!cat!ng the !mportance of tw!ce-da!ly brush!ng w!th fluor!de toothpaste through dental pract!ces, schools, hosp!tals and commun!t!es across 25 countr!es" We are evaluat!ng the !mpact on over 28,000 people !nvolved !n these programmes around the world" A new campa!gn !n 2013 !s des!gned to address parents as the pr!mary target to encourage behav!our change"

IMPROVE ORAL HEALTH

16

Our lead!ng fam!ly health toothpaste brands, S!gnal and Pepsodent, are grow!ng strongly thanks to our Brush Day and N!ght oral health campa!gns" Over 2008-12, S!gnal grew by 22% worldw!de" In Indones!a, one of our b!ggest markets, sales of Pepsodent rose by nearly 16% !n 2012 compared to the prev!ous year"

BRUSH DAY AND NIGHT PROMOTES GROWTH

HEALTH AND HY!IENE1



Part of the success of our Dove Self-Esteem Pro&ect has been an !ncreased w!ll!ngness among consumers to spread the brand’s aff!rmat!ve message and to purchase Dove’s products"Research by M!llward Brown, a research company, shows that among women !n the US who are aware of the Dove Self-Esteem Pro&ect, 62% would recommend the Dove brand to others – 16% more than among those who are not aware of the pro&ect"Among women !n $anada who are aware of the pro&ect, 82% would be more l!kely to purchase Dove" These results mot!vate us to cont!nue to !nvest !n the Pro&ect"

DOVE BOOSTS SELF&ESTEEM AND BUSINESS SUCCESS

OUR TAR!ETS • We a!m for zero workplace !n&ur!es"

By 2020 we w!ll reduce the Total Recordable Frequency Rate (TRFR) for acc!dents !n our factor!es and off!ces by 50% versus 2008"

OUR PERFORMAN"E 45% reduct!on !n TRFR at end 2012

compared to 2008, down from 2"1 to 1"16† acc!dents per 1 m!ll!on hours worked"

OUR PERSPE"TIVEWe are among the leaders !n our !ndustry on safety" Therefore the target to halve our !n&ury rate !s a stretch!ng one and becomes progress!vely harder as we get closer to our a!m" We measure our progress us!ng an acc!dent rate (TRFR) wh!ch counts all workplace !n&ur!es except those requ!r!ng only s!mple f!rst a!d treatment" W!th the except!on of 2001, we have ach!eved cont!nuous !mprovement !n our health and safety record s!nce 1996" In 2012 we cont!nued th!s progress, reduc!ng TRFR by 9% compared to 2011, from 1"27 to 1"16† per 1 m!ll!on hours worked"However, reduc!ng road traff!c acc!dents rema!ns a pr!or!ty for protect!ng our people" Much of our bus!ness growth comes from develop!ng markets where our sales people are at !ncreased r!sk because the local road !nfrastructure can be poor" We have been work!ng w!th $ranf!eld Un!vers!ty !n the UK and other partners to develop a hol!st!c approach that tackles !nternal r!sks as well as collaborat!ng w!th others to address external r!sks, such as local road safety blackspots"

REDU"E WORKPLA"E INJURIES AND A""IDENTS FUTURE CHALLENGES

Ach!ev!ng our targets to reach such s!gn!f!cant numbers of people w!th hyg!ene messages and safe dr!nk!ng water was always go!ng to be challeng!ng" Wh!le we have made progress, we recogn!se there !s a cons!derable gap to f!ll to ach!eve our goal" Th!s !s part!cularly true for L!febuoy where we need to reach a further 881 m!ll!on by 2015" We rema!n conf!dent of our plans to scale up handwash!ng programmes at a faster rate over the next few years" L!febuoy !s focus!ng on the follow!ng pr!or!ty areas to meet !ts target%• !ncreas!ng the !mpact of rural outreach

through partnersh!ps and mult!-brand programmes

• creat!ng larger partnersh!ps w!th a p!oneer!ng approach to co-!nvestment

• roll!ng out a cost-effect!ve and scalable programme to new countr!es

• learn!ng from evaluat!on stud!es to !dent!fy and roll out best pract!ce

• cont!nu!ng to ra!se the prof!le of hyg!ene !ssues w!th governments, key op!n!on formers and w!der commun!t!es"

To help more than a b!ll!on people !mprove the!r hyg!ene hab!ts, we also recogn!se the need to develop a more hol!st!c approach to the !nter-related !ssues of water, san!tat!on and hyg!ene" We are look!ng at how we can promote affordable to!let prov!s!on and good to!let hyg!ene for m!ll!ons wh!le grow!ng bus!ness for our Domestos brand" We are work!ng w!th partners such as UNI$EF and the World To!let Organ!zat!on to develop appropr!ate models to create and fulf!l demand for to!lets"

17


Dove !s our largest Personal $are brand, ava!lable !n over 70 countr!es and w!th an annual turnover of over (3 b!ll!on" It cont!nues to grow strongly, exper!enc!ng !ts th!rd consecut!ve year of double-d!g!t growth !n 2012"

DOVE: OUR LEADING PERSONAL CARE BRAND

http://www.unilever.com/sustainable-living/healthandhygiene

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Nutr#t#on

NUTRITIONHELPIN# PEOPLEMAKE HEALTHY$HOI$ES

2

18


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Nutr#t#on

We w"ll cont"nually work to "mprove the taste and nutr"t"onal qual"ty of all our products% By 2020, we w"ll double the proport"on of our portfol"o that meets the h"ghest nutr"t"onal standards, based on globally recogn"sed d"etary gu"del"nes% Th"s w"ll help hundreds of m"ll"ons of people to ach"eve a health"er d"et%

NUTRITION

In 2012 the ma#or"ty of our products met, or were better than, benchmarks based on nat"onal nutr"t"onal recommendat"ons% Our comm"tment goes further& 18% of our portfol"o by volume met the h"ghest nutr"t"onal standards, based on globally recogn"sed d"etary gu"del"nes%

19

INDUSTRY NEEDS TO COLLABORATE WITH GOVERNMENT AND PUBLIC HEALTH ORGANISATIONS.

OUR PERSPE"TIVE Our a!m !s to make great-tast!ng food wh!ch makes a pos!t!ve contr!but!on to a healthy d!et"Our Nutr!t!on Enhancement Programme, launched !n response to the World Health Organ!zat!on’s call for act!on, has substant!ally reduced salt, saturated and trans fat and sugar !n our products" In 2010 we ra!sed our standards further by benchmark!ng our progress aga!nst the h!ghest nutr!t!onal standards, based on globally recogn!sed d!etary gu!del!nes"Th!s has !nsp!red us to create health!er products wh!ch people want to eat" We relaunched our European salad dress!ngs to reduce salt wh!le del!ver!ng great taste

and our new Spec!ally for K!ds logo on !ce creams enables parents to make more !nformed cho!ces"In 2012 we moved from report!ng by product (or ‘stock keep!ng un!t’) to report!ng by volume (!e tonnes sold)" Report!ng by volume better reflects the relat!ve !mpact of our foods and beverages on people’s d!ets" We have also moved to a more automated report!ng system, enabl!ng us to !ncrease s!gn!f!cantly the scope of our analys!s"Together, these changes prov!de a more extens!ve and robust analys!s of our Foods and Refreshment portfol!o"

In 2012, 18% of our portfol!o met the cr!ter!a for h!ghest nutr!t!onal standards, based on globally recogn!sed d!etary gu!del!nes" Th!s f!gure !s not comparable w!th the 25% we reported for 2011 due to the s!gn!f!cant changes to our scope" Th!s new scope !s prompt!ng us to cons!der our future act!ons"Look!ng ahead, we are cont!nu!ng to !mprove the nutr!t!onal prof!le of our portfol!o, wh!le recogn!s!ng that th!s !s somet!mes d!ff!cult" $ollaborat!on between !ndustry, government and publ!c health organ!sat!ons !s needed to address complex d!et and l!festyle !ssues"

Note" Progress on targets for h!ghest nutr!t!onal standards' salt' saturated fats' trans fat' and k!localor!es !s measured January-September 2012" Progress on sugar target !s measured January 2011-September 2012" In 2012 we moved to full volume-based (tonnes sold) report!ng for h!ghest nutr!t!onal standards and salt"


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Nutr#t#on

OUR TAR!ETS Pr!or to 2010 we had already s!gn!f!cantly reduced salt levels !n our products" Our goal !s to reduce the level further to help consumers meet the recommended level of 5 g of salt per day based on globally recogn!sed d!etary gu!del!nes"

• Our f!rst m!lestone was to reduce salt levels to an !nter!m target of 6 g per day by the end of 2010" Th!s requ!red reduct!ons of up to 25%" Our amb!t!on !s to reduce by a further 15-20% on average to meet the target of 5 g of salt per day between 2015 and 2020"

OUR PERFORMAN"E 80% of our Foods and Refreshment

portfol!o by volume met salt levels equ!valent to 5 g per day by end September 2012' for our Foods portfol!o alone, more than 50% reached 5 g per day"*

OUR PERSPE"TIVESalt consumpt!on !n many countr!es rema!ns much h!gher than the recommended da!ly amount" Ach!ev!ng our target w!ll requ!re a s!gn!f!cant sh!ft !n consumer behav!our and d!fferent stakeholders to play the!r part" We are us!ng the Un!lever F!ve Levers for $hange model to help us !dent!fy where to act" We bel!eve we have most !mpact through creat!ng great-tast!ng products" Typ!cally, to reduce the level of salt, we completely redes!gn the rec!pe so !t tastes better as well as be!ng health!er"Our nutr!t!on measurements cover our Foods and Refreshment products to g!ve a rounded p!cture of our portfol!o" However, the products !n our Refreshment category of !ce cream and beverages make very small contr!but!ons to salt !ntakes" We !dent!fy the proport!on of our Foods portfol!o that reached 5 g per day because th!s !s the most relevant area for salt reduct!on"

20

In 2012 we reformulated our extens!ve range of salad dress!ngs !n Europe – Knorr, Hellmann’s, $alvé, Amora and L!geresa – to salt levels that meet our str!ngent 5 g per day target" Up to 35% reduct!on !n salt has been ach!eved wh!le del!ver!ng great taste" These products w!ll be on the market from early 2013"

SALAD DRESSINGS WITH LESS SALT

Foods that need salt for preservat!on or preparat!on can contr!bute s!gn!f!cantly to salt !ntakes" But mot!vat!ng people to choose products w!th less salt !s d!ff!cult" Un!lever !n!t!ated consumer surveys on salt reduct!on among 6,000 consumers !n seven countr!es" The results !nformed a ser!es of &o!nt workshops w!th the Internat!onal Un!on of Nutr!t!onal Sc!ences, br!ng!ng together sc!ent!sts, pol!cy-makers, food !ndustr!es and consumer groups to generate compell!ng commun!cat!on on salt reduct!on for consumers" Our surveys revealed that 80% of people do not see the need to reduce salt !ntake" Results from the workshops conf!rmed that we need to put taste at the heart of our approach to salt reduct!on as people are worr!ed that lower-salt foods w!ll not taste as good"

UNLOCKING THE REAL TASTE WITH REDUCED&SALT PRODUCTS

REDU"E SALT LEVELS

OUR TAR!ETSWe are comm!tted to !mprov!ng the fat compos!t!on of our products by reduc!ng saturated fat as much as poss!ble and !ncreas!ng levels of essent!al fats"

• By 2012 our lead!ng spreads w!ll conta!n less than 33% saturated fat as a proport!on of total fat"

• A da!ly port!on w!ll prov!de at least 15% of the essent!al fatty ac!ds recommended by !nternat!onal d!etary gu!del!nes"

OUR PERFORMAN"E 92 92% of our lead!ng spreads by volume

conta!ned less than 33% saturated fat as a proport!on of total fat by end September 2012"

92 92% of our lead!ng spreads by volume prov!ded at least 15% of the essent!al fatty ac!ds recommended by !nternat!onal gu!del!nes by end September 2012"

OUR PERSPE"TIVEThe b!ggest contr!but!on we can make to reduc!ng saturated fat !ntake !s to encourage people to sw!tch from butter to margar!ne" We have been able to reduce saturated fat levels !n the vast ma&or!ty of our lead!ng spreads – to levels of about half the saturated fat present !n butter" Our lead!ng spreads are those we sell !n tubs under brands such as Flora, Becel, Rama and Blue Band, compr!s!ng around two-th!rds of our soft margar!ne by volume"The small proport!on of our lead!ng brands that do not meet our target are sold !n trop!cal countr!es" A h!gher saturated fat level !s requ!red to make the product stable at amb!ent temperatures" We are !nvest!gat!ng cost-effect!ve technolog!es that w!ll allow us to reduce saturated fat by approx!mately a th!rd !n these countr!es – tak!ng the saturated fat level to 38% – wh!le st!ll keep!ng products affordable"

REDU"E SATURATED FAT

* Th!s number !s not comparable to the 61% reported for 2011 measured by product (stock keep!ng un!t)"

NUTRITION2


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Nutr#t#on

OUR TAR!ETS • By 2012 we w!ll have removed from all

our products any trans fat or!g!nat!ng from part!ally hydrogenated vegetable o!l"

OUR PERFORMAN"E By September 2012, 100% of our portfol!o

by volume d!d not conta!n trans fats or!g!nat!ng from part!ally hydrogenated vegetable o!l"

OUR PERSPE"TIVETo ensure we ma!nta!n our performance aga!nst th!s target, we have made the absence of trans fats from part!ally hydrogenated vegetable o!l a standard report!ng requ!rement for all our suppl!ers"

REMOVE TRANS FAT

21

Stev!a, a sweetener der!ved from natural sources, !s meet!ng consumer demand for !ngred!ents from natural sources wh!le also del!ver!ng a reduct!on !n sugar" Wh!le reduc!ng sugar, we also !mproved the taste of many of our L!pton ready-to-dr!nk teas"

SWEETNESS WITHOUT CALORIES

* N!lsson K et al" Internat!onal Journal of L!fe $ycle Assessment 2010'15%916-26"

OUR TAR!ETS • Pr!or to 2010 we had already reduced

sugar levels !n our ready-to-dr!nk teas" By 2020 we w!ll remove an add!t!onal 25%"

OUR PERFORMAN"E 4% reduct!on !n sugar by end

September 2012"

OUR PERSPE"TIVEIn 2012 we !ntroduced several L!pton ready-to-dr!nk tea products w!th reduced sugar levels, part!cularly !n Europe and North Amer!ca" Most of these use Stev!a (stev!ol glycos!des) – a sweetener from natural sources that prov!des sweetness w!thout calor!es" Add!t!onally, Stev!a has a lower carbon footpr!nt than sugar"

REDU"E SU!AR

After the launch !n 2011, we are cont!nu!ng to roll out our new rec!pe Flora/Becel margar!nes, wh!ch are now ava!lable !n more than ten countr!es" As well as be!ng lower !n calor!es, research has shown consumers f!nd them tast!er" Us!ng technolog!cal !nnovat!on, the b!ggest of !ts k!nd for 60 years, we have been able to reduce saturated fats by around 25% and calor!es by 20%" It has up to 80% less saturated fat than butter" Margar!ne already has a quarter of the carbon footpr!nt of butter and uses around half the land"* Our new rec!pes w!ll reduce these env!ronmental !mpacts even further"

UP TO 80% LESS SATURATED FAT THAN BUTTER

We cont!nue to !mprove the fat compos!t!on of our products by !ncreas!ng the level of essent!al fats" For pract!cal reasons, we generally !ncrease essent!al fats at the same t!me as we reduce saturated fat levels, so the two targets are closely !nterl!nked"

Un!lever !s the world’s largest !ce cream company, w!th brands on sale !n over 40 countr!es" Our popular Max and Paddle Pop !ce creams cont!nue to do well, ach!ev!ng underly!ng sales growth of nearly 20% !n 2012, and w!ll be us!ng our new Spec!ally for K!ds logo"By the end of 2012, 81% of our ch!ldren’s !ce creams conta!ned 110 k!localor!es or fewer per port!on"

STRONG GROWTHNUTRITION2

OUR TAR!ETS • By 2014 100% of our ch!ldren’s !ce

creams w!ll conta!n 110 k!localor!es or fewer per port!on" 60% w!ll meet th!s level by 2012"

OUR PERFORMAN"E 81% of our ch!ldren’s !ce creams

conta!ned 110 k!localor!es or fewer per port!on by end September 2012, up from 73% at end 2011"

OUR PERSPE"TIVEWe cont!nue to !nvest s!gn!f!cantly !n th!s area and are on track to meet our 2014 target" In part!cular, we are work!ng on new technolog!es that w!ll allow us to reduce calor!es by lower!ng fat and sugar" As part of our Partner to W!n strateg!c suppl!er !n!t!at!ve, we have a long-term partnersh!p w!th Barry $allebaut, our suppl!er of cocoa and chocolate products, to develop cocoa based coat!ngs w!th reduced saturated fat"

In 2013 we started to !ntroduce a Spec!ally for K!ds logo on !ce creams that meet our str!ct nutr!t!on cr!ter!a and st!ll appeal to ch!ldren as fun treats through a comb!nat!on of taste, texture, shapes and colours" The logo helps parents to !dent!fy !ce creams that ch!ldren can en&oy as part of a balanced d!et and act!ve l!festyle" To promote act!ve l!festyles we have partnered w!th a lead!ng ch!ld development psycholog!st to create an ‘adventurous play’ gu!de w!th !mag!nat!ve and act!ve games"

REDU"E "ALORIES

Calories834

42%

Calories626

31%

OUR TAR!ETS • By 2020 we a!m to mot!vate 100 m!ll!on

people to take the Heart Age test" (Target rev!sed 2013")

Our goal !s to mot!vate people to adopt health!er d!ets and l!festyles, as th!s can reduce elevated heart age"

OUR PERFORMAN"E In 2012 we &o!ned forces w!th M!crosoft

to launch Heart Age as an app"

OUR PERSPE"TIVEIn 2009 Un!lever and the World Heart Federat!on launched Heart Age, a s!mple onl!ne tool to ra!se awareness of card!ovascular d!sease" The tool proved an excellent mechan!sm for mak!ng heart health personally relevant" Unt!l 2011 our Flora/Becel spread brands prov!ded the foundat!on for ra!s!ng awareness of Heart Age but recogn!sed that, by themselves, they could not dr!ve enough people to the tool" In our 2011 Progress Report we stated that these brands would no longer be the sole sponsors of the Heart Age tool, and that Un!lever would look to work w!th a broader set of external partners w!th a common heart health goal to max!m!se the tool’s potent!al"Dur!ng 2012, Un!lever &o!ned forces w!th M!crosoft to launch the Heart Age appl!cat!on on the new W!ndows 8 platform" Th!s g!ves us the potent!al to reach a s!gn!f!cant number of people as the platform grows, to co-promote the tool and to explore opportun!t!es through M!crosoft’s emerg!ng health platform"Follow!ng the launch !n December, we are further expand!ng the reach of Heart Age v!a a w!de consort!um of partners !nterested !n heart health, !n add!t!on to cont!nued support from our Flora/Becel pro•act!v brands and M!crosoft"

IMPROVE HEART HEALTH

More at% www(un#leverfoodsolut#ons(us People en&oy healthy eat!ng at home" Our research shows they would l!ke health!er opt!ons when they eat out too" Our profess!onal cater!ng bus!ness, Un!lever Food Solut!ons, !s work!ng w!th restaurant operators around the world to make the!r menus more nutr!t!ous w!th the help of our products" Work!ng w!th food experts and !ndustry-spec!f!c bod!es, our Seduct!ve Nutr!t!on programme prov!des rec!pe !deas and adv!ce for creat!ng nutr!t!ous and del!c!ous meals, espec!ally for top-sell!ng d!shes" Under the programme !n the US, over 5,000 operators pledged to remove more than 450 m!ll!on calor!es from the!r menus !n 2012"The campa!gn !s already act!ve !n 17 countr!es worldw!de" It w!ll enable restaurateurs to tap !nto consumer demand and !ncrease revenues, wh!le also contr!but!ng to publ!c health"

SEDUCTIVE NUTRITION

See for yourself how exchang!ng one or two !ngred!ents for health!er food select!ons, or ad&ust!ng port!on s!zes, can reduce total calor!es !n one of your top d!shesUse the $alor"e $alculator as Insp"rat"on to Reduce $alor"es

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Nutr#t#on22

$alor!e $alculator


FUTURE CHALLENGESReduc!ng salt cont!nues to be one of the b!ggest nutr!t!onal challenges fac!ng our !ndustry" People tend to prefer the taste of trad!t!onally salted products" If the food !s perce!ved as not salty enough, people w!ll often compensate by add!ng salt at the table"We are pursu!ng three approaches%• explor!ng technolog!es that prov!de

an alternat!ve to sod!um salts • reformulat!ng rec!pes w!th other !ngred!ents to reta!n flavour wh!le reduc!ng salt

• chang!ng consumer preference for salt by gradually reduc!ng salt levels over t!me"

However, the salt challenge cannot be solved by one company act!ng alone" Ult!mately, !t requ!res collaborat!on between !ndustry, governments, publ!c health organ!sat!ons and the sc!ent!f!c commun!ty" In develop!ng and emerg!ng countr!es m!ll!ons of people have d!ets lack!ng !n essent!al m!cronutr!ents" Our challenge rema!ns reach!ng more people worldw!de w!th fort!f!ed products that are affordable and commerc!ally v!able"Our approach !s to !ntegrate fort!f!cat!on !nto our core product portfol!o" About a th!rd of Un!lever sales volume (exclud!ng our ready-to-dr!nk tea bus!ness) conta!ns at least 15% of the recommended da!ly amount (RDA) of an essent!al v!tam!n or m!neral" For example, our spreads are fort!f!ed w!th v!tam!ns A and D, and also conta!n v!tam!n E naturally present !n the vegetable o!ls"

We have !ncreas!ng ev!dence that our Lampl!ghter health programme !s a sound !nvestment for our employees and for our bus!ness" Independent analys!s shows a return on !nvestment of (4"82 for every (1 !nvested !n the programme !n Braz!l, based on comb!ned healthcare and product!v!ty sav!ngs over 2008-11" In S!ngapore the return on !nvestment was (3%1 over 2009-12 and there has been a reduct!on !n the health r!sk factors assoc!ated w!th h!gher healthcare costs, such as poor d!et and f!tness"

INVESTING IN EMPLOYEE HEALTH

OUR TAR!ETS Our Lampl!ghter employee programme a!ms to !mprove the nutr!t!on, f!tness and mental res!l!ence of employees" By 2010 !t had already been !mplemented !n 30 countr!es, reach!ng 35,000 people"

• In 2011 we a!med to extend the reach of Lampl!ghter to a further e!ght countr!es" We w!ll !mplement Lampl!ghter !n an add!t!onal 30 countr!es between 2012 and 2015" Our longer-term goal !s to extend !t to all the countr!es where we operate"

OUR PERFORMAN"E Lampl!ghter has reached over 50,000

employees across more than 50 countr!es" In 2012 !t was rolled out to 12 countr!es"

OUR PERSPE"TIVELampl!ghter !s key to address!ng the top three health r!sks we have !dent!f!ed across our bus!ness% mental well-be!ng' l!festyle factors (eg exerc!se, nutr!t!on, smok!ng and obes!ty wh!ch can lead to cond!t!ons such as hypertens!on, d!abetes and heart d!sease)' and ergonom!c factors (eg repet!t!ve stra!n !n&ury)" In 2012 we !mplemented a global No Smok!ng Standard for employees wh!le at work" By the end of the year, compl!ance w!th the new standard reached 72%' we a!m to reach 100% !n 2013"Lampl!ghter helps us to analyse our employees’ health r!sks and to put !n place steps to control them" For example, !n Ind!a the programme has reduced the number of employees categor!sed as ‘h!gh r!sk’ (due to obes!ty or hypertens!on for example) from 8% to under 4% over 2007-12" It !s prov!ng a valuable tool for safeguard!ng employees’ health, !mprov!ng product!v!ty and reduc!ng costs"

IMPROVE EMPLOYEE HEALTH AND NUTRITION

OUR TAR!ETSOur a!m !s to prov!de clear, s!mple labell!ng on our products to help consumers make cho!ces for a nutr!t!onally balanced d!et" All our products !n Europe and North Amer!ca prov!de full nutr!t!onal !nformat!on" • By 2015 th!s w!ll be extended to cover

all our products globally" We w!ll !nclude energy per port!on on the front of pack plus e!ght key nutr!ents and % #u!del!ne Da!ly Amounts (#DA) for f!ve nutr!ents on the back of pack"*

OUR PERFORMAN"E We have ach!eved full nutr!t!onal labell!ng

!n Europe, North Amer!ca, Lat!n Amer!ca, Austral!a and New Zealand' !n 2012 we made progress !n Afr!ca, the M!ddle East and As!a"

OUR PERSPE"TIVETo help us meet our target, at the end of 2012 we put !n place a new system to !mprove our mon!tor!ng and track!ng of th!s !nformat!on" Our standards !n th!s area often go beyond country regulat!ons, prov!d!ng more nutr!t!onal !nformat!on on labels than !s requ!red locally" Examples !nclude Kenya, the Ph!l!pp!nes, Turkey, Russ!a and some countr!es !n North Afr!ca and the M!ddle East"

PROVIDE HEALTHY EATIN!INFORMATION

* Where appl!cable and legally allowed and !n accordance w!th local or reg!onal !ndustry agreements"

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Nutr#t#on 23

http://www.unilever.com/sustainable-living/nutrition-health

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012!reenhouse !ases

!REENHOUSE !ASESHELPIN# TO TA$KLE$LIMATE $HAN#E

3

24


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 !reenhouse !ases

Halve the greenhouse gas "mpact of our products across the l"fecycle by 2020%*

GREENHOUSE GASES

Source for footpr!nt and p!e chart" Un!lever 2011-12 footpr!nt study across 14 countr!es" % of total !n tonnes"* Our env!ronmental targets are expressed aga!nst a basel!ne of 2008 and on a ‘per consumer use’ bas!s" Th!s means a s!ngle

use, port!on or serv!ng of a product" As of Apr!l 2013, our new automated system only allows us to compare our footpr!nt to 2010 rather than to our or!g!nal 2008 basel!ne"

Our greenhouse gas "mpact per consumer use has reduced by around 6% s"nce 2010%*

25

WE ARE SEEKING INNOVATIONS TO HELP PEOPLE REDUCE THEIR GREENHOUSE GAS IMPACTS.

OUR PERSPE"TIVE $l!mate change !s accelerat!ng and the effects are be!ng felt across the world" It has a s!gn!f!cant !mpact on our bus!ness" The sourc!ng of our agr!cultural raw mater!als w!ll be affected by changes !n weather patterns' our bus!ness and our consumers w!ll be affected by !ncreases !n energy and food pr!ces and extreme weather events w!ll d!splace commun!t!es"Be!ng proact!ve on cl!mate change !s essent!al to ensur!ng we rema!n a v!able bus!ness !n the future" We also reap the benef!ts through !nnovat!on, new product development and cost eff!c!enc!es"

For example, our new dry shampoos do not need hot water when used and !n 2012 grew by over 19% !n sales" And we have avo!ded (99 m!ll!on !n costs s!nce 2008 by !mprov!ng energy use !n our factor!es"We are mak!ng progress towards our comm!tment" The greenhouse gas footpr!nt of the mak!ng and use of our products has reduced by around 6% per consumer use s!nce 2010"*We have made part!cularly good progress !n reduc!ng greenhouse gas em!ss!ons from transport and manufactur!ng by !ncreas!ng eff!c!ency and us!ng more renewable energy"

Our b!ggest challenge however, rema!ns reduc!ng the hot water used w!th our soaps, shower gels and shampoos" To ach!eve our goal we need to prov!de consumers w!th more products and tools wh!ch mot!vate them to use less water" But mater!al change w!ll requ!re w!de-scale decarbon!s!ng of energy gr!ds, effect!ve carbon pr!c!ng and courageous government pol!c!es"

OUR FOOTPRINT

+ + + +

25% 4% 2% 1%68%

Raw mater"als Manufacture Transport $onsumer use D"sposal


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012!reenhouse !ases

!REENHOUSE !ASES3

OUR TAR!ETS • By 2015 we a!m to reach 200 m!ll!on

consumers w!th products and tools that w!ll help them to reduce the!r greenhouse gas em!ss!ons wh!le wash!ng and shower!ng" Our plan !s to reach 400 m!ll!on people by 2020"

OUR PERFORMAN"E Wh!le we have made some l!m!ted

progress, overall th!s target rema!ns challeng!ng"

OUR PERSPE"TIVEThe greatest greenhouse gas !mpact of our shampoos, shower gels and soaps occurs when they are used by consumers w!th heated water" Dur!ng 2012 we cont!nued to explore a range of approaches to help us understand consumer behav!our to !nfluence the!r shower!ng and bath!ng hab!ts" These !ncluded% the roll-out of dry shampoo under many brands such as Dove, Suave and TRESemmé' a promot!onal offer of a free aerator w!th Radox shower gel !n South Afr!ca' and crowd sourc!ng fresh !deas on how to encourage consumers to reduce heated water !n the shower"We est!mate that compared to wash!ng ha!r w!th heated water, us!ng a dry shampoo reduces $O2 by around 90%" The dry shampoo market !s st!ll qu!te new and the number of users !s relat!vely low' however quant!tat!ve consumer panel data from the US shows that for those who bought a dry shampoo, !t replaced a wet wash !n 60% of uses" Th!s suggests dry shampoo !s a potent!al way to reduce heated water !n the shower by offer!ng a mot!vat!ng beauty benef!t wh!ch leads to a susta!nable behav!our"

REDU"E !REENHOUSE !AS EMISSIONS FROM SKIN "LEANSIN! AND HAIR WASHIN!

OUR FOOTPRINT The product categor!es wh!ch make the largest contr!but!on to our greenhouse gas footpr!nt are those where the consumer requ!res heated water" Soap, shower gel and shampoo and cond!t!oner products alone account for more than half our total footpr!nt"

OUR !REENHOUSE !AS FOOTPRINT (% $ONTRIBUTION BY $ATE#ORY 2011,12)

26

OUR TAR!ETS Reduce the greenhouse gas !mpact of the laundry process by%

• $oncentrat!ng our l!qu!ds and compact!ng our powders"

• Reformulat!ng our products to reduce greenhouse gas em!ss!ons by 15% by 2012"

• Encourag!ng our consumers to wash at lower temperatures and at the correct dosage !n 70% of mach!ne washes by 2020"

OUR PERFORMAN"E 14% of our portfol!o !n our top 14

countr!es was made up of concentrated and compacted products at end 2012,† compared to our basel!ne of 4% !n 2008"

Over 95% (by volume) of our laundry powders !n our top 14 countr!es have been reformulated, ach!ev!ng a reduct!on of 15% !n greenhouse gas em!ss!ons"

We commun!cate the benef!ts of low-temperature wash!ng on our packs and onl!ne and are encourag!ng our consumers to use the r!ght dosage"

OUR PERSPE"TIVEL!qu!d laundry detergents are popular w!th consumers and !n 2012 we were the market leader !n emerg!ng markets, w!th market share of over 25%" The ma&or!ty of our l!qu!d detergents are now sold !n concentrated form" $oncentrat!ng our laundry products helps to reduce greenhouse gas em!ss!ons, and !s good for our bus!ness – great performance comb!ned w!th lower mater!al and transport costs" However, !t can take t!me for consumers to sw!tch to concentrated or compacted products and use the r!ght dosage" Some consumers cont!nue to use larger doses than needed, wh!le others under-dose"

REDU"E !REENHOUSE !AS EMISSIONS FROM WASHIN! "LOTHES

Our dry shampoos allow women to refresh ha!r between washes, sav!ng t!me and extend!ng the!r style" They may also encourage people to wash the!r ha!r w!th hot water less often"We have now rolled out our dry shampoos to ten countr!es under n!ne brands, !nclud!ng TRESemmé, Suave, T!#! and VO5" Sales grew by over 19% !n 2012" We are the market leader !n the US w!th 75% share and !n 2012 launched the product under the Dove brand"

DRY SHAMPOO SALES GROW 19%

Soap and shower gel Laundry detergents and fabr!c cond!t!oners Shampoo and cond!t!oners Soups, sauces and stock cubes Tea and beverages Household cleaners Ice cream Margar!ne and spreads Mayonna!se, mustards and dress!ngs Deodorants Toothpaste Sk!n care

48

11

11

6

6

5

43 2 2 1 1


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 !reenhouse !ases

OUR TAR!ETS • By 2020 $O2 em!ss!ons from energy

from our factor!es w!ll be at or below 2008 levels desp!te s!gn!f!cantly h!gher volumes"

Th!s represents a reduct!on of around 40% per tonne of product!on"

Versus a 1995 basel!ne, th!s represents a 63% reduct!on per tonne of product!on and a 43% absolute reduct!on"

• We w!ll more than double our use of renewable energy to 40% of our total energy requ!rement by 2020" We recogn!se that th!s !s only a f!rst step towards a long-term goal of 100% renewable energy"

• All newly bu!lt factor!es w!ll a!m to have less than half the !mpact of those !n our 2008 basel!ne"

OUR PERFORMAN"E 838,000 fewer tonnes of $O2 from

energy produced !n 2012 than !n 2008 (a reduct!on of 31"5% per tonne of product!on)"†

$ompared to 1995, th!s represents a 60% reduct!on !n absolute terms"

At end 2012 renewable energy contr!buted 26"3%† of our total energy use compared to 15"8% !n 2008"

Seven new factor!es were spec!f!ed !n 2012 for open!ng !n 2013" The!r eco-eff!c!ent des!gn a!ms for em!ss!ons to be 50% less than our 2008 basel!ne"

OUR PERSPE"TIVEWe cont!nued to make progress !n reduc!ng $O2 !n 2012, add!ng to sav!ngs s!nce our 2008 basel!ne, wh!ch are now equ!valent to tak!ng around 200,000 cars off the road" We have also made good progress !n !ncreas!ng the energy from renewable sources at our manufactur!ng s!tes" All our s!tes !n the US now purchase electr!c!ty from cert!f!ed renewable sources, as well as those !n Europe and $anada"

However, !n some cases the cost of renewable energy !s h!gh compared to energy from non-renewable fuels" We cont!nue to evaluate cost-effect!ve and scalable renewable technolog!es that w!ll contr!bute to our global target" Our new factor!es now have susta!nab!l!ty bu!lt !nto the!r core des!gns" In add!t!on to eco-eff!c!ent des!gn of product!on processes, we are us!ng cert!f!cat!on systems such as LEED and BREEAM env!ronmental assessment methods and rat!ng systems for bu!ld!ngs" Our seven new factor!es !n 2013 w!ll ach!eve a rat!ng of LEED S!lver or above"

REDU"E !REENHOUSE !AS EMISSIONS FROM OUR MANUFA"TURIN!

27

By des!gn!ng our products d!fferently, we can cut out these var!at!ons" One example !s concentrated laundry capsules, wh!ch we are promot!ng !n Europe as they ensure consumers use an accurate dose"

We have worked hard to reformulate our products by replac!ng !ngred!ents that have a h!gh greenhouse gas !mpact w!th those w!th lower !mpacts" These can reduce greenhouse gas !mpact by up to a th!rd" We have had some success w!th help!ng people to adopt d!fferent hab!ts" We are work!ng w!th the Internat!onal Assoc!at!on for Soaps, Detergents and Ma!ntenance Products (AISE) to encourage people to wash at lower temperatures"

In 2012 we comm!ss!oned a new b!omass bo!ler at our Pouso Alegre s!te !n Braz!l wh!ch produces our AdeS and Knorr products" Th!s burns recycled wood rather than o!l and w!ll reduce em!ss!ons by around 80%" We are now us!ng b!o-energy at 30 of our 252 manufactur!ng s!tes, prov!d!ng around 7% of the energy we use" Th!s reduces our annual em!ss!ons from foss!l fuels by over 150,000 tonnes of $O2" We are plann!ng to !nstall add!t!onal bo!lers at s!tes !n Lat!n Amer!ca, Afr!ca and As!a"

REDUCING GHG THROUGH BIOMASS

OVER )300 MILLION COST AVOIDEDS!nce 2008, our manufactur!ng eco-eff!c!ency programme has used a number of cost-effect!ve !nvestments to reduce our energy, water and waste" In!t!at!ves range from encourag!ng people to adopt small act!ons that make a b!g d!fference cumulat!vely, such as ensur!ng l!ghts are turned off, to larger !nvestments such as b!omass bo!lers" We have reduced our env!ronmental footpr!nt wh!le avo!d!ng cumulat!ve supply cha!n costs of over (300 m!ll!on%

• Water (17 m!ll!on • Energy (99 m!ll!on• Waste d!sposal (10 m!ll!on • Mater!als (186 m!ll!on

† To be !ndependently assured by Pw$ !n 2013, see page 52"† To be !ndependently assured by Pw$ !n 2013, see page 52"

OUR TAR!ETS As the world’s largest producer of !ce cream, we w!ll accelerate our roll-out of freezer cab!nets that use cl!mate-fr!endly (hydrocarbon) refr!gerants" When we launched our Plan !n November 2010 we had already purchased 450,000 un!ts w!th the new refr!gerant"

• We w!ll purchase a further 850,000 un!ts by 2015"

OUR PERFORMAN"E Around 332,000 cl!mate-fr!endly

freezers purchased !n 2012, tak!ng us to over 800,000 of our target of 850,000"

OUR PERSPE"TIVEOur cl!mate-fr!endly hydrocarbon (H$) freezers have a negl!g!ble global warm!ng potent!al compared to those that conta!n hydrofluorocarbons (HF$s)" They are also around 10% more energy eff!c!ent"In add!t!on to buy!ng freezers w!th cl!mate-fr!endly refr!gerants, we have been p!oneer!ng new models us!ng state-of- the-art components to !ncrease the!r energy eff!c!ency" Over 2010-12 we purchased around 290,000 of these more energy-eff!c!ent freezers" We est!mate that the energy eff!c!ency of the freezers we bought !n 2012 avo!ded around 40,000 tonnes of $O2 em!ss!ons compared to 2008 models"We are work!ng w!th !ndustry to promote the move to more env!ronmentally fr!endly freezers" We are dr!v!ng an !ndustry comm!tment to phase out HF$s by 2015 through our part!c!pat!on !n the $onsumer #oods Forum and as the cha!r of Refr!gerants, Naturally)

REDU"E !REENHOUSE !AS EMISSIONS FROM REFRI!ERATION

As part of our UltraLog!st!k transport network, we are creat!ng reg!onal d!str!but!on hubs" These w!ll !mprove operat!onal eff!c!ency s!gn!f!cantly and reduce total d!stance travelled by 175 m!ll!on km !n Europe alone from 2013 to 2015 (compared to 2010)" These hubs are part-funded by the EU’s programme for log!st!cs operators who are comm!tted to the susta!nable transport of goods across Europe" We w!ll have 12 hubs !n Europe by 2014" Each !s respons!ble for ensur!ng that trucks are more fully loaded as they travel across Europe, wh!ch w!ll reduce $O2 em!ss!ons by nearly 16,000 tonnes over 2010-14" Mak!ng our log!st!cs more eff!c!ent del!vers real bus!ness benef!ts !nclud!ng reduced costs, better bus!ness plann!ng and !mproved serv!ce"

TRANSPORT NETWORK SAVES CARBON AND ROAD MILES

OUR TAR!ETS • By 2020 $O2 em!ss!ons from our global

log!st!cs network w!ll be at or below 2010 levels desp!te s!gn!f!cantly h!gher volumes" Th!s w!ll represent a 40% !mprovement !n $O2 eff!c!ency"

We w!ll ach!eve th!s by reduc!ng truck m!leage' us!ng lower em!ss!on veh!cles' employ!ng alternat!ve transport such as ra!l or sh!p' and !mprov!ng the energy eff!c!ency of our warehouses"

OUR PERFORMAN"E 10% !mprovement !n $O2 eff!c!ency s!nce

2010" 7% !mprovement !n $O2 eff!c!ency and a 7% reduct!on !n absolute terms !n 2012 compared to 2011"*

OUR PERSPE"TIVETo get our products from our factor!es to the market, we transport our goods over 1"5 b!ll!on km each year – the equ!valent of travell!ng to the moon and back more than 2,000 t!mes"We are leverag!ng th!s scale by creat!ng reg!onal d!str!but!on hubs wh!ch w!ll !mprove operat!onal eff!c!ency s!gn!f!cantly (see r!ght)" To reach our 2020 target we need to collaborate w!th external partners as we do not own the trucks, tra!ns and sh!ps that we use" We are mak!ng susta!nab!l!ty part of our work!ng agreements w!th !nfrastructure prov!ders and operators"

REDU"E !REENHOUSE !AS EMISSIONS FROM TRANSPORT

Our UltraLog!st!k control tower organ!sat!on enables us to co-ord!nate our transport act!v!t!es eff!c!ently" We establ!shed a tower !n Poland !n 2007 wh!ch has saved more than (50 m!ll!on !n costs over 2008-12" We now have towers !n other reg!ons and w!ll cont!nue w!th more !n 2013"

ULTRALOGISTIK SAVES )50 MILLION

!REENHOUSE !ASES3

!reenhouse !ases28 Un#lever Susta!nable L!v!ng Plan% Progress Report 2012

* $umulat!ve !mprovement s!nce 2010 !s measured across our top 14 countr!es' annual !mprovement !s measured !n more than 50 countr!es"


FUTURE CHALLENGESOur greatest greenhouse gas !mpact comes from the heated water people need when they take a shower w!th our soaps, shower gels and shampoos – espec!ally !n the US" F!nd!ng ways to reduce th!s !s cruc!al !f we are to meet our goal to halve the greenhouse gas em!ss!ons of our products across the l!fecycle"We are f!nd!ng th!s very d!ff!cult and have only made l!m!ted headway" We have made a start by understand!ng people’s shower!ng hab!ts" In 2011 we reported on shower!ng research !n the UK" We have followed up w!th a s!m!lar study !n Austral!a (see page 32)"#!ven the barr!ers to change, we are exper!ment!ng w!th products l!ke dry shampoo, w!th offers such as free shower aerators from Radox shower gel – wh!ch can save consumers up to (450 a year – and w!th compet!t!ons to open source !nnovat!ve !deas" A b!g part of our footpr!nt today !s !n the US" But as people !n the fast-grow!ng markets of As!a and Afr!ca start to acqu!re wash!ng mach!nes and showers the task becomes even more d!ff!cult" Our challenge w!ll be to ensure that people cont!nue to wash the!r clothes at low temperatures when they get a wash!ng mach!ne"We do not yet have v!able solut!ons and we w!ll cont!nue to seek !nnovat!ons wh!ch w!ll help people reduce the!r !mpacts" But large-scale change w!ll only come about !f carbon has an econom!c pr!ce and !f governments put the r!ght frameworks !n place" So we cont!nue to advocate amb!t!ous publ!c pol!cy to address cl!mate change and to !ncent!v!se the trans!t!on to a low-carbon economy"

OUR TAR!ETS • By 2020 we w!ll halve the energy (kWh)

purchased per occupant for the off!ces !n our top 21 countr!es versus 2010"

OUR PERFORMAN"E 11% reduct!on !n energy (kWh)

purchased per occupant s!nce 2010"

OUR PERSPE"TIVEIn 2012 we cont!nued to focus on mak!ng !mprovements to our IT systems to reduce energy use !n our off!ces" S!nce 2011, all new personal computers are s!lver or gold Energy Star rated and all servers !n our data centres are gold Energy Star rated" In our data centres, we are consol!dat!ng the number of servers !n the US, As!a, Afr!ca, the M!ddle East and Turkey' we have decomm!ss!oned over 3,000 servers s!nce 2008" We have started to roll out a P$ power management platform wh!ch !s expected to reduce P$ power consumpt!on by a m!n!mum of 20%" In 2013, we w!ll !ntroduce a personal consumpt!on mon!tor to show employees the!r energy sav!ngs and paper use" We are us!ng our bu!ld!ngs more eff!c!ently by !ncreas!ng the average occupancy dens!ty and opt!m!s!ng l!ght!ng, heat!ng and cool!ng systems" We have developed a toolk!t wh!ch helps s!tes take small act!ons to reduce the energy they use"

REDU"E ENER!Y "ONSUMPTION IN OUR OFFI"ES

OUR TAR!ETS • We are !nvest!ng !n advanced v!deo

conferenc!ng fac!l!t!es to make commun!cat!on eas!er wh!le reduc!ng travel for our employees" By 2011 th!s network w!ll cover more than 30 countr!es"

OUR PERFORMAN"E 54 countr!es were covered by end 2011"

OUR PERSPE"TIVEWe exceeded our 2011 target" Through the use of telepresence !n 26 count!es we el!m!nated the need for around 14,500 short-haul fl!ghts and over 23,500 long-haul fl!ghts" Th!s del!vered clear bus!ness benef!ts w!th an est!mated sav!ng of almost (40 m!ll!on !n costs and 113,500 tonnes !n $O2 em!ss!ons" We cont!nue to promote more flex!ble ‘ag!le work!ng’ to lessen the burden of travel for our employees and reduce greenhouse gas em!ss!ons"

REDU"E EMPLOYEE TRAVEL

In Denmark our greener freezers have helped us w!n new bus!ness" We agreed new partnersh!ps w!th Fakta d!scount stores !n 2009 and OK Plus petrol cha!n !n 2011, wh!ch are part of the reta!ler $OOP" Pr!or to th!s Un!lever had very l!ttle bus!ness w!th e!ther company" A key factor was our ab!l!ty to demonstrate that our cl!mate-fr!endly freezers generate lower $O2 em!ss!ons and use less energy, del!ver!ng better energy eff!c!ency for our customers" We have ach!eved excellent growth w!th both each year s!nce then"

CLIMATE&FRIENDLY FREEZERS GROW SALES AND CUT COSTS

!reenhouse !ases 29Un#lever Susta!nable L!v!ng Plan% Progress Report 2012

http://www.unilever.com/sustainable-living/greenhousegases

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Water

WATERREDU$IN# OURWATER USE WHEREIT MATTERS MOST

4

30

PRO!RESS ON THE PLAN !OVERNAN"EPRO!RESS ON THE PLANSTRATE!Y

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Water

Halve the water assoc"ated w"th the consumer use of our products by 2020%*

WATER

WE HAVE A LONG WAY TO GO TO MEET OUR GOAL. WE MUST WORK IN PARTNERSHIP WITH OTHERS TO DRIVE SYSTEMIC CHANGE.

Our water "mpact per consumer use has rema"ned broadly unchanged s"nce 2010%*

31

OUR PERSPE"TIVE Water shortages are already affect!ng many parts of the world" By 2025, 1"8 b!ll!on people w!ll be l!v!ng !n countr!es or reg!ons w!th absolute water scarc!ty and two-th!rds !n water-stressed cond!t!ons" Wh!le around 70% of ava!lable fresh water !s used for agr!culture, when !t comes to personal and domest!c use, the UN est!mates that each person needs about 50-100 l!tres per day for dr!nk!ng, cook!ng and wash!ng" Yet !n the poorest countr!es people l!ve on as l!ttle as 10 l!tres a day" The collect!on of water, typ!cally undertaken by women, !s also an !ssue" Accord!ng to the UN, sub-saharan Afr!ca alone loses 40 b!ll!on hours per year collect!ng water" Our approach !s to work across our value cha!n from raw mater!al sourc!ng to the des!gn of our products" S!nce 2010 we have worked w!th the Water Footpr!nt Network to

measure our agr!cultural water !mpact" We have learnt that our pr!or!ty water-!ntens!ve crops are tomatoes and sugar cane and that overall our footpr!nt !s lower than we had prev!ously est!mated" We have been work!ng w!th our tomato suppl!ers for many years and we w!ll cont!nue to !ntroduce dr!p !rr!gat!on to our suppl!ers for th!s and other crops"We have made part!cular progress !n reduc!ng water abstracted by our manufactur!ng s!tes" S!nce 2008 we have saved the equ!valent of around 1"5 l!tres of water for every person on the planet" The water used by our consumers !n wash!ng and clean!ng !s more than seven t!mes greater than the water embedded !n the agr!cultural raw mater!als we buy" In emerg!ng countr!es, wash!ng clothes can take up one-th!rd of a household’s water supply"

We are mak!ng some progress !n des!gn!ng and roll!ng out products wh!ch requ!re less water" Our $omfort One R!nse fabr!c cond!t!oner !s now ava!lable !n more water-scarce countr!es" L!febuoy has launched a foam handwash wh!ch cuts water use and we have rolled out dry shampoo to ten countr!es" We have a long way to go to meet our goal" As we go forward, we w!ll be better prepared for sourc!ng essent!al raw mater!als from farmers w!th l!m!ted water suppl!es and we w!ll open up new markets by prov!d!ng products wh!ch meet the needs of people w!th restr!cted access to water" But !n the end transformat!onal change w!ll only come about when water !s pr!ced and there !s a f!nanc!al !ncent!ve to encourage new behav!ours"

OUR FOOTPRINT

+

15%

Water used "n the agr"cultural raw mater"als we source, measured "n all water-scarce countr"es "n the world

+

<1% 85%

Water we add to the product

Water used by consumers "n water-scarce countr"es, measured "n seven water-scarce countr"es represent"ng around half the world’s populat"on


Source for footpr!nt and p!e chart" Un!lever 2011-12 footpr!nt study across 7 water-scarce countr!es" % of total !n l!tres" Our basel!ne for water !ncludes the water used by consumers w!th our products and the water !n the formulat!on" We have calculated the water used !n agr!culture !n a separate study wh!ch covers all water-scarce countr!es !n the world, see www"un!lever"com/susta!nable-l!v!ng/water/footpr!nt/

* Our env!ronmental targets are expressed aga!nst a basel!ne of 2008 and on a ‘per consumer use’ bas!s" Th!s means a s!ngle use, port!on or serv!ng of a product" As of Apr!l 2013, our new automated system only allows us to compare our footpr!nt to 2010 rather than to our or!g!nal 2008 basel!ne"

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Water

WATER

OUR TAR!ETS We w!ll reduce the water requ!red !n the laundry process by%

• Mak!ng eas!er r!ns!ng products more w!dely ava!lable"

• Prov!d!ng 50 m!ll!on households !n water-scarce countr!es w!th laundry products that del!ver excellent results but use less water by 2020"

OUR PERFORMAN"E In 2012 we launched $omfort One R!nse,

our fabr!c cond!t!oner, !n Ind!a and $ambod!a and expanded the $omfort One R!nse range !n Tha!land, V!etnam, Indones!a and the Ph!l!pp!nes"

In 2012 One R!nse products were used !n 1"4 b!ll!on washes !n 28"7 m!ll!on households worldw!de, a 66% !ncrease on 2010"†

OUR PERSPE"TIVEWe assessed both these targets as off track !n our last Report" $ompared to 2011, we have more pro&ects agreed !n our !nnovat!on p!pel!ne that g!ve us conf!dence we w!ll make greater progress !n the com!ng years" We have also s!gn!f!cantly expanded One R!nse products and sales are grow!ng, so we have assessed our progress as back on track to reach our 2020 target" In water-scarce countr!es, around 38% of domest!c water !s used to clean clothes" In many of these areas, people wash garments by hand" Our One R!nse fabr!c cond!t!oner reduces the amount of water needed to remove detergent res!dues to one bucket rather than three" Th!s can save up to half the water per wash, around 30 l!tres, !f used correctly" In 2012 we cont!nued to !ntroduce th!s product to new countr!es and !t !s now ava!lable !n Ind!a and $ambod!a" It has a lead!ng pos!t!on !n some markets, account!ng for 38% of the fabr!c cond!t!oner market !n V!etnam and has r!sen to a quarter of the market !n Indones!a"

REDU"E WATER USE IN THE LAUNDRY PRO"ESS

OUR FOOTPRINT Our water footpr!nt !s calculated !n seven countr!es wh!ch we have def!ned as water-scarce, account!ng for around half the world’s populat!on (see page 53)"Our analys!s shows that around 38% of our water footpr!nt comes from the laundry process – a s!gn!f!cant proport!on of th!s !s wash!ng laundry by hand !n the develop!ng world" A further 39% of our footpr!nt comes from shower!ng, bath!ng and wash!ng ha!r w!th our products"

OUR WATER FOOTPRINT (% $ONTRIBUTION BY $ATE#ORY 2011,12)

The chart above shows the water assoc!ated w!th the consumer use of our products"

38

31

13

10

8

OUR TAR!ETS • By 2015 we !ntend to reach 200 m!ll!on

consumers w!th products and tools that w!ll help them to use less water wh!le wash!ng and shower!ng" Our goal !s to reach 400 m!ll!on by 2020"

OUR PERFORMAN"E In 2012 we have !mproved our

understand!ng of th!s area but progress rema!ns slow"

OUR PERSPE"TIVEAround 39% of our domest!c water footpr!nt occurs when people use our soaps, shower gels and shampoos and they can be slow or reluctant to change the!r hab!ts" We have undertaken several stud!es !n d!fferent countr!es to !mprove our understand!ng of people’s shower!ng behav!our and how !t can be !nfluenced" For example, our shower study of 100 households !n Austral!a gathered data on shower hab!ts and the relat!onsh!p between consumer behav!our and product use" We !nstalled sensors to measure the durat!on, water use and frequency of showers" We found the average shower lasts about 9 m!nutes, longer than the average UK shower of 8 m!nutes" We have !ntroduced two !nnovat!ons that prov!de consumer benef!ts and encourage less water use% dry shampoo, wh!ch refreshes the ha!r w!thout water, and L!febuoy foam handwash wh!ch can cut water use by 18%"

REDU"E WATER USE IN SKIN "LEANSIN! AND HAIR WASHIN!

4

32

We are exper!ment!ng w!th ways to help consumers reduce water use" Our Radox brand of shower gels !n South Afr!ca gave consumers a free aerator when they purchased two products" These can be f!tted to shower heads to reduce water and they can save people up to (450 a year"

RADOX SAVES CONSUMERS MONEY


Laundry detergents and fabr!c cond!t!oners Soap and shower gel Household cleaners Toothpaste Shampoo and cond!t!oners


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Water

OUR TAR!ETS • By 2020, water abstract!on by our

global factory network w!ll be at or below 2008 levels, desp!te s!gn!f!cantly h!gher volumes"


Versus a 1995 basel!ne, th!s represents a 78% reduct!on per tonne of product!on and a 65% absolute reduct!on" We w!ll focus !n part!cular on factor!es !n water-scarce locat!ons"

• All newly bu!lt factor!es w!ll a!m to abstract less than half the water of those !n our 2008 basel!ne"

OUR PERFORMAN"E 13 m!ll!on fewer m3 of water abstracted

!n 2012 than !n 2008 (a reduct!on of 25% per tonne of product!on)"†

$ompared to 1995, th!s represents a 73% reduct!on !n absolute terms"

Seven new factor!es were spec!f!ed !n 2012 for open!ng !n 2013" The!r eco-eff!c!ent des!gn a!ms to abstract 50% less water per tonne of product!on than the 2008 basel!ne"

OUR PERSPE"TIVEWe have made good progress !n reduc!ng water abstracted by our manufactur!ng s!tes% s!nce 2008 we have saved the equ!valent of around 1"5 l!tres of water for every person on the planet" Water use per tonne of product!on decreased by 7% !n 2012 compared to 2011" In 2012 we !nvested !n four effluent recycl!ng pro&ects at s!tes !n South As!a to reduce abstract!on by over 60,000 m3 per year" Our Ind!an manufactur!ng s!tes prov!de many good examples of how ra!nwater !s used for factory ut!l!t!es such as cool!ng towers, bo!lers, manufactur!ng processes (follow!ng treatment) and to!let flush!ng"However, the relat!vely low cost of water makes &ust!fy!ng the costs of some water reduct!on pro&ects d!ff!cult" We w!ll therefore focus on reduc!ng water use !n s!tes we have !dent!f!ed as pr!or!ty water-scarce locat!ons"

REDU"E WATER USE IN OUR MANUFA"TURIN! PRO"ESS

OUR TAR!ETS • We w!ll develop comprehens!ve plans

w!th our suppl!ers and partners to reduce the water used to grow our crops !n water-scarce countr!es"

OUR PERFORMAN"E In 2012 we ref!ned our understand!ng

of our !rr!gat!on water footpr!nt and !dent!f!ed pr!or!ty crops and locat!ons for further work"

OUR PERSPE"TIVEIn 2012, us!ng data from the Water Footpr!nt Network, we completed a ground-break!ng assessment of the amount of !rr!gat!on water used to produce our key agr!cultural raw mater!als !n all the water-scarce countr!es we source from" Th!s !ncluded a deta!led assessment of our key agr!cultural mater!als (around two-th!rds of our volumes) and cons!derat!on of a further 30 mater!als"Our assessment !s much more prec!se than our prev!ous analys!s wh!ch we used to draw up our 2008 water footpr!nt d!agram" Th!s !s largely due to better water footpr!nt est!mates and more spec!f!c !nformat!on on the areas !n wh!ch our key crops are grown" Our footpr!nt !s lower than we had prev!ously est!mated" We thought that the total water used to produce our agr!cultural !ngred!ents was about 50% of our value cha!n footpr!nt" We now know that !t !s about 15%, and that about 85% relates to water used by our consumers (see updated footpr!nt, page 31)"The assessment !dent!f!ed tomatoes and sugar cane as pr!or!ty crops from a water perspect!ve" We have already worked for many years on promot!ng dr!p !rr!gat!on w!th our tomato suppl!ers" We w!ll now step up our act!v!ty and cont!nue to work w!th suppl!ers to collect data for self-ver!f!ed crops grown accord!ng to the Un!lever Susta!nable Agr!culture $ode"

REDU"E WATER USE IN A!RI"ULTURE FUTURE CHALLENGES

The largest part of our footpr!nt !s assoc!ated w!th shower!ng, bath!ng and wash!ng clothes, &ust as our greenhouse gas footpr!nt !s assoc!ated w!th heat!ng that water for showers and wash!ng mach!nes" In those parts of the develop!ng world where water !s scarce, women often have to walk long d!stances to collect water, or they have to become ‘water managers’ !n the home – stor!ng and rat!on!ng scarce water carefully" If we can develop more !nnovat!ons l!ke $omfort One R!nse, wh!ch reduce the water needed for do!ng the laundry, these w!ll save people t!me as well as be!ng more conven!ent"Long-term lack of !nvestment !n water !nfrastructure w!ll exacerbate the problem of water scarc!ty !n many countr!es"We need to work !n partnersh!p w!th governments, N#Os and consumers to address and manage water use effect!vely" Water pr!c!ng and water meter!ng, alongs!de consumer educat!on, w!ll ult!mately be necessary to dr!ve system!c change"

33

Investment !n cost-effect!ve technolog!es !n our factor!es – along w!th the treatment of process effluents to enable water reuse and !ncreased mon!tor!ng – has avo!ded over (17 m!ll!on !n cumulat!ve cost s!nce 2008"

ECO&EFFICIENCY AVOIDS )17 MILLION IN COSTS


http://www.unilever.com/sustainable-living/water

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Waste

WASTEREDU$E, REUSE,RE$Y$LE

5

34


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Waste

Halve the waste assoc"ated w"th the d"sposal of our products by 2020*

WASTE

OVER HALF OUR FACTORIES ACHIEVED ZERO NON&HAZARDOUS WASTE TO LANDFILL IN 2012.

Our waste "mpact per consumer use has reduced by around 7% s"nce 2010%*

35

We set our basel!ne by calculat!ng the waste from over 1,600 representat!ve products" We d!d th!s at an absolute level as well as on a per consumer use bas!s !n 14 countr!es" The calculat!on covers 70% of our volumes" As of Apr!l 2013, our new automated system only allows us to compare our footpr!nt to 2010 rather than to our or!g!nal 2008 basel!ne"

Source for footpr!nt and p!e charts" Un!lever 2011-12 footpr!nt study across 14 countr!es" % of total !n tonnes"

* Our env!ronmental targets are expressed aga!nst a basel!ne of 2008 and on a ‘per consumer use’ bas!s" Th!s means a s!ngle use, port!on or serv!ng of a product"

OUR PERSPE"TIVE Packag!ng plays a key role !n protect!ng our products" But !t can also end up as waste !n landf!ll, dump!ng grounds or as l!tter" Increas!ng resource scarc!ty means !t !s more urgent than ever to be eff!c!ent w!th packag!ng and f!nd solut!ons to deal w!th ‘post consumer waste’ – packag!ng and product thrown away after use by our consumers" Th!s !s part!cularly !mportant !n develop!ng markets where !nfrastructure to manage packag!ng waste has not kept pace w!th the rap!d r!se !n consumpt!on"Our approach !s to reduce, reuse and recycle" There !s a clear bus!ness case" By reduc!ng packag!ng we can ga!n cost benef!ts !n mater!als, energy and transport"

More of our packag!ng !s now recyclable or conta!ns recycled mater!al, but we are f!nd!ng that tackl!ng post-consumer waste !s more challeng!ng" We are cont!nu!ng to work w!th others – from !nfluenc!ng government pol!cy to learn!ng from suppl!ers and waste serv!ce prov!ders, as well as collaborat!ng w!th other !ndustry players on non-compet!t!ve pr!or!t!es, such as develop!ng new mater!als that can be eas!ly recycled" We have !n!t!ated a number of p!lots on mater!als wh!ch are usually cons!dered more d!ff!cult to recycle at scale" We w!ll collaborate w!th others across our value cha!n to develop new end-to-end solut!ons"

We have made good progress !n reduc!ng our waste" In manufactur!ng, over half our s!tes ach!eved zero non-hazardous waste to landf!ll !n 2012 and we are sett!ng a new target for all our s!tes to ach!eve th!s by 2015"Progress has also been made !n l!ghtwe!ght!ng our packag!ng" Th!s often !nvolves select!ng new mater!als wh!ch enable less mater!al use" Our ded!cated global team of experts, called the Mater!als $apab!l!ty #roup, develops long-term !nnovat!ve solut!ons to reduce packag!ng" They work w!th spec!al!st suppl!ers to draw on the latest technolog!es wh!ch are then appl!ed across our product categor!es"

OUR FOOTPRINT

+ + –

58% 19% [X%]23%

Pr"mary packag"ng Transport packag"ng Product leftoversNat"onal "ndex of mater"als

recycled and recovered / est"mates


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Waste

WASTE

OUR TAR!ETS • By 2020 we w!ll reduce the we!ght

of packag!ng that we use by a th!rd through%

- l!ghtwe!ght!ng mater!als - opt!m!s!ng structural and

mater!al des!gn - develop!ng concentrated vers!ons

of our products - el!m!nat!ng unnecessary packag!ng"

OUR PERFORMAN"E An est!mated 9"5% reduct!on !n we!ght

per consumer use over 2011-12 compared to 2010, ach!eved through a comb!nat!on of l!ghtwe!ght!ng and mater!al des!gn opt!m!sat!on"

OUR PERSPE"TIVEWe are mak!ng good progress to reduce our packag!ng" We have trad!t!onally focused on reduc!ng packag!ng mater!al s!mply as a route to cutt!ng costs" But our focus has changed" We are now focus!ng on develop!ng !nnovat!on !n l!ghter, stronger and better mater!als that have a lower env!ronmental !mpact" To help us do th!s we have establ!shed a Mater!als $apab!l!ty #roup who work together w!th suppl!ers to develop new technolog!es"New technolog!es are cr!t!cal to ensure we have a cont!nuous programme for packag!ng reduct!ons" For example, we have reduced the number of layers and the th!ckness of the sachet mater!als used for our ha!r products !n South East As!a, and we w!ll now roll th!s out across Ind!a, Pak!stan and Bangladesh" Once the roll-out !s complete, we w!ll save around 2,500 tonnes of mater!al"

OUR FOOTPRINT Our analys!s has h!ghl!ghted that our food packag!ng !s one of the b!ggest contr!butors to our waste footpr!nt" But to ach!eve our goal we w!ll need to reduce waste across all product categor!es by reduc!ng the we!ght of packag!ng and by help!ng to !ncrease recycl!ng" Tea bags form a s!gn!f!cant proport!on of product leftovers"

5

36

Dur!ng 2011 we launched a new bottle des!gn !n Indones!a and Tha!land for our $!tra sk!n care brand" Th!s resulted !n a we!ght reduct!on of 365 tonnes of mater!al" In 2012, we !ntroduced a new technology – b!-modal res!n – and we saved a further 70 tonnes of mater!al" The same technology !s now be!ng rolled out across many more of our sk!n care and ha!r care brands and w!ll br!ng further sav!ngs !n mater!al and cost"

NEW TECHNOLOGY SAVES MONEY

The mater!al we use to wrap our !ce cream brands, Tw!ster, Paddle Pop and Fruttare !s made of layers" Our R&D experts, work!ng w!th academ!cs and suppl!ers, have developed new mater!als wh!ch reduce both the number of layers and the!r th!ckness"The results speak for themselves" These brands have reduced the!r use of flow wrap from 19 spec!f!cat!ons to &ust three worldw!de" Th!s change reduces the amount of packag!ng we use and has !mmed!ate bus!ness benef!ts" We started roll!ng out these mater!als !n 2012" When our roll-out !s complete, we ant!c!pate a sav!ng of around (1"3 m!ll!on, complemented by a mater!al reduct!on of around 530 tonnes"

CUTTING PACKAGING COSTS

REDU"E PA"KA!IN!

Measured by mater!al type, paper and board, flex!ble lam!nates and glass make up the ma&or!ty of our waste footpr!nt"

17

11

11

109

8

8

7

5

55

4

33

1716

13

11

43 3

Paper and board Flex!ble lam!nates #lass PP

PE Other PET Metals

OUR WASTE FOOTPRINT (% $ONTRIBUTION BY $ATE#ORY 2011,12)

OUR WASTE FOOTPRINT (% $ONTRIBUTION BY MATERIAL TYPE 2011,12)

Soups, sauces and stock cubes Soap and shower gel Tea and beverages Laundry detergents and fabr!c cond!t!oners Deodorants Shampoo and cond!t!oners Ice cream Mayonna!se, mustards and dress!ngs Household cleaners Margar!ne and spreads Sk!n care Toothpaste


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Waste

OUR TAR!ETS • We w!ll prov!de consumers w!th

ref!lls !n our home and personal care portfol!o to make !t poss!ble to reuse the pr!mary pack"

OUR PERFORMAN"E We !ntroduced ref!lls !n several

markets dur!ng 2012, !nclud!ng $h!na, Ind!a, South Afr!ca and the UK"

OUR PERSPE"TIVEWe are hav!ng some success !n develop!ng markets" We sell ref!ll pouches !n $h!na and South Afr!ca for some of our shampoo brands" In developed markets th!s area rema!ns challeng!ng as consumers somet!mes see ref!lls as unappeal!ng" However, we cont!nue to exper!ment and are expand!ng our range" An example !s T!mote! shampoo’s 500 ml ref!ll, launched !n the UK !n 2012"

REUSE PA"KA!IN!

37

Our deta!led analys!s shows that nat!onal recycl!ng rates for part!cular mater!als often lack clar!ty" For example, a 90% recycl!ng rate for alum!n!um packag!ng may be based largely on recycl!ng of alum!n!um dr!nks cans, and !t !s therefore !nappropr!ate to apply the same rate when calculat!ng waste to landf!ll for our alum!n!um aerosol packag!ng" Th!s analys!s helps focus our efforts to !ncrease recycl!ng for spec!f!c packag!ng formats" For example we have !ncreased aerosol deodorant recycl!ng through strateg!c partnersh!ps w!th !ndustry assoc!at!ons and some of our customers !n the UK, Braz!l and Mex!co"

DEEPER INSIGHTS DRIVE ACTION

We are bu!ld!ng our knowledge of recycl!ng !n several ways"In the US, our Dove and Suave brands are work!ng w!th Recyclebank to !ncent!v!se consumers to recycle more bathroom products" Un!lever Ventures has !nvested !nd!rectly !n Recyclebank as !t w!ll help us !ncrease our understand!ng of how to encourage people to recycle more" In Europe, we have comm!ss!oned stud!es !n several countr!es a!med at understand!ng the recycl!ng !nfrastructure for polypropylene (PP) pots, trays and tubs" These are w!dely used by our margar!ne brands, Wall’s !ce creams and Vasel!ne &ars" The stud!es have shown that th!s type of packag!ng !s hardly recycled and, at best, !s burnt for energy" We are currently engaged !n d!scuss!ons w!th players from each stage of the recycl!ng process" We !ntend to p!lot a pro&ect !n 2013 focused on creat!ng a v!able bus!ness model wh!ch st!mulates greater demand for PP pots, trays and tubs to be collected, sorted and recycled"

ENCOURAGING MORE RECYCLING

OUR TAR!ETS • Work!ng !n partnersh!p w!th !ndustry,

governments and N#Os, we a!m to !ncrease recycl!ng and recovery rates on average by 5% by 2015 and by 15% by 2020 !n our top 14 countr!es" For some th!s means doubl!ng or even tr!pl!ng ex!st!ng recycl!ng rates"

We w!ll make !t eas!er for consumers to recycle our packag!ng by us!ng mater!als that best f!t the end-of-l!fe treatment fac!l!t!es ava!lable !n the!r countr!es"

• By 2020 we w!ll !ncrease the recycled mater!al content !n our packag!ng to max!mum poss!ble levels" Th!s w!ll act as a catalyst to !ncrease recycl!ng rates"

OUR PERFORMAN"E 3"5% !ncrease !n recycl!ng and

recovery rates, over the 2010 average Recycl!ng and Recovery Index (RRI), averaged across our top 14 countr!es" Some of th!s !ncrease resulted from !mproved data"

3,126 tonnes of post-consumer recycled mater!als !ncorporated !nto our r!g!d plast!c packag!ng"

OUR PERSPE"TIVEWe have made modest progress aga!nst our targets" Th!s area !s complex, as we ant!c!pated" In some countr!es there !s almost no !nfrastructure ava!lable to collect waste and some mater!als cannot read!ly be recycled as technolog!es do not yet ex!st" In other countr!es w!th more developed !nfrastructure, certa!n packag!ng formats, although manufactured from popular mater!als such as PET, are st!ll not collected and recycled !n s!gn!f!cant volumes" We are us!ng the knowledge ga!ned from !nfrastructure stud!es and p!lot !n!t!at!ves to develop the most su!table solut!ons, whether th!s !nvolves develop!ng a new recycl!ng waste stream or rev!ew!ng the mater!als used !n our products"

RE"Y"LE PA"KA!IN!

Waste

OUR TAR!ETS • By 2020 total waste sent for d!sposal

w!ll be at or below 2008 levels desp!te s!gn!f!cantly h!gher volumes"


Versus a 1995 basel!ne, th!s represents an 80% reduct!on per tonne of product!on and a 70% absolute reduct!on"

• By 2015 all manufactur!ng s!tes w!ll ach!eve zero non-hazardous waste to landf!ll" (New Target 2012")

• All newly bu!lt factor!es w!ll a!m to generate less than half the waste of those !n our 2008 basel!ne"

OUR PERFORMAN"E 76,000 fewer tonnes of total waste !n

2012 than !n 2008" Th!s represents a 51% reduct!on per tonne of product!on"†

$ompared to 1995, th!s represents an 85% reduct!on !n absolute terms"

53% (133) of our manufactur!ng s!tes ach!eved zero non-hazardous waste to landf!ll by end 2012"

Seven new factor!es were spec!f!ed !n 2012 for open!ng !n 2013" The!r eco-eff!c!ent des!gn a!ms for waste to be 50% less than the 2008 basel!ne and zero non-hazardous waste to be sent to landf!ll"

OUR PERSPE"TIVEIn 2012 we halved our waste d!sposed from manufactur!ng s!tes compared to our 2008 basel!ne !n both absolute terms and per tonne of product!on, wh!lst grow!ng our bus!ness" Th!s s!gn!f!cant m!lestone – wh!ch has far exceeded our !n!t!al target – was ach!eved through waste el!m!nat!on and reduct!on act!v!t!es and by d!vert!ng waste away from d!sposal routes such as landf!ll" Th!s equates to a cost sav!ng of almost (10 m!ll!on s!nce 2008, ach!eved w!thout the need for cap!tal expend!ture" In add!t!on, reduct!on !n waste !n manufactur!ng s!nce 2008 has avo!ded costs of (186 m!ll!on"

In 2012 about 76,000 fewer tonnes of s!te waste were sent to landf!ll compared to our 2008 basel!ne" Th!s !s the equ!valent of more than one m!ll!on household b!ns of waste"By the end of 2012, 133 manufactur!ng s!tes ach!eved zero non-hazardous waste to landf!ll" Th!s !s over half our 252 s!tes, up from 74 at the start of the year" In the UK for example, we reduced the number of waste prov!ders from 65 to one, max!m!s!ng opportun!t!es to !dent!fy recycl!ng and benef!c!al recovery routes and ach!ev!ng cost sav!ngs"Bu!ld!ng on our good progress, !n 2012 we set a stretch!ng new target for 100% of our manufactur!ng s!tes to ach!eve zero non-hazardous waste to landf!ll by the end of 2015"

REDU"E WASTE FROM OUR MANUFA"TURIN!

38

We est!mate that between 2008 and 2012 our focused manufactur!ng programme of waste el!m!nat!on, reuse, recycl!ng and recovery has avo!ded costs of over (186 m!ll!on !n raw and packag!ng mater!als and has dr!ven down waste d!sposal costs by more than (10 m!ll!on"

RETHINKING WASTE AVOIDS OVER )196 MILLION IN COSTS

OUR TAR!ETS • Our goal !s to develop and !mplement a

susta!nable bus!ness model for handl!ng our sachet waste streams by 2015"

OUR PERFORMAN"E We are !nvest!gat!ng the potent!al of

a new technology to f!nd uses for sachet waste" We bel!eve th!s w!ll generate h!gher value returns for sachet waste, thereby help!ng us to bu!ld a stronger bus!ness case, wh!ch for the moment rema!ns a challenge"

OUR PERSPE"TIVEEmpty sachets are generally cons!dered not worth collect!ng because they are small and l!ghtwe!ght so they lack value" Our amb!t!on !s to develop a v!able bus!ness model for sachet waste wh!ch cont!nues to prov!de the pr!ce and conven!ence benef!ts of sachets to low-!ncome consumers wh!lst tackl!ng the env!ronmental !ssues assoc!ated w!th the!r use, such as l!tter and lack of recyclab!l!ty" In our 2011 Progress Report we shared the results of our tr!als us!ng pyrolys!s – the recovery of energy from sachet waste" We proved that the result!ng fuel was of h!gh enough qual!ty for our H!ndustan Un!lever factory" To make the o!l useable and prof!table we have been work!ng w!th our suppl!er !n Ind!a to set up a d!st!llat!on column" But scale-up !s prov!ng a challenge" In 2012 we !dent!f!ed a new technology wh!ch we bel!eve !s the next generat!on to pyrolys!s" Small-scale tr!als have shown a h!gh y!eld and super!or qual!ty end product" We are currently !n negot!at!ons w!th the developer and other value-cha!n partners w!th the a!m of comm!ss!on!ng the f!rst commerc!al plant !n Indones!a dur!ng 2013" One of the b!ggest barr!ers to turn!ng pyrolys!s or next generat!on technology !nto a bus!ness opportun!ty for reprocessors !s tak!ng collect!on of sachet waste to scale" We have engaged N#Os !n Ind!a to ass!st us and we plan to test d!fferent approaches !n 2013"

TA"KLE SA"HET WASTE

WASTE5

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012


In manufactur!ng, apart from el!m!nat!ng waste, we also employ three other means of cutt!ng our waste – reuse, recycl!ng and recovery" Examples !nclude% the !ntroduct!on of reusable trans!t packag!ng !n our Hefe! factory !n $h!na' waste mayonna!se converted to b!ofuel' and effluent plant sludges !n Turkey and the Ph!l!pp!nes g!ven a second l!fe as alternat!ve raw mater!als !n construct!on products"

FINDING NEW USES FOR WASTE

http://www.youtube.com/watch?v=yiDe4z_2u4g


Waste

OUR TAR!ETS • We w!ll el!m!nate PV$ (polyv!nyl chlor!de)

from all packag!ng by 2012 (where techn!cal solut!ons ex!st)"

OUR PERFORMAN"E 99 99% of PV$ removed from our portfol!o

by end 2012"

OUR PERSPE"TIVEWe comm!tted to el!m!nate PV$ from our packag!ng !n 2009" V!rtually all our packag!ng !s now free of PV$" To get there our R&D teams around the world have developed and tr!alled new mater!als and our supply cha!n has !nvested !n new equ!pment" However, we have yet to el!m!nate PV$ completely" Some of our foods use PV$ !n packag!ng for safety or hyg!ene reasons, for example as a sealant !n metal food l!ds" For such uses, commerc!ally v!able techn!cal solut!ons do not yet ex!st" We are seek!ng out new mater!als that prov!de the same funct!onal propert!es as PV$ at a v!able cost" Demand for such alternat!ve mater!als !s currently small, so we have been at the forefront of catalys!ng !nnovat!on !n the marketplace" Once these new opt!ons become ava!lable, many !ndustr!es w!ll benef!t from them" S!nce we launched the Un!lever Susta!nable L!v!ng Plan, we have made several acqu!s!t!ons wh!ch have brought more PV$ !nto our bus!ness" PV$ from these acqu!s!t!ons !s not !ncluded !n our 99% above" We are tak!ng act!on to el!m!nate !t"

ELIMINATE PV"

OUR TAR!ETS • In our top 21 countr!es, at least 90% of

our off!ce waste w!ll be reused, recycled or recovered by 2015 and we w!ll send zero waste to landf!ll by 2017"

• By 2015 we w!ll reduce paper consumpt!on by 30% per head !n our top 21 countr!es"

• We w!ll el!m!nate paper !n our !nvo!c!ng, goods rece!pt, purchase order processes, f!nanc!al report!ng and employee expense process!ng by 2015, where legally allowable and techn!cally poss!ble"

OUR PERFORMAN"E 88% of our off!ce waste was reused,

recycled or recovered by end 2012"

24% reduct!on !n paper consumpt!on per head !n our top 21 countr!es by end 2012"

14% of our !ncom!ng !nvo!ces were processed electron!cally !n 2012, up from 10% !n 2011"

OUR PERSPE"TIVEWe have made good progress !n reus!ng, recycl!ng and recover!ng our off!ce waste" In 2012, employee engagement campa!gns and recycl!ng stat!ons helped us to !mprove waste awareness, reduce paper use and d!vert waste from landf!ll" Th!s, comb!ned w!th agreements w!th waste management contractors, has enabled us to ach!eve zero waste to landf!ll at 45% of target s!tes !n our top 21 countr!es"In 2012 we launched a global pr!nt standard" Double-s!ded pr!nt!ng rose to 37% from 28% !n 2010 !n our top 21 countr!es"

REDU"E OFFI"E WASTE FUTURE CHALLENGESWh!le we are mak!ng good progress !n reduc!ng packag!ng, we cannot ach!eve our target to halve our waste unless recycl!ng rates !ncrease s!gn!f!cantly" We are !nvolved !n several !ntervent!ons assoc!ated w!th recycl!ng and recovery, such as the Metal Matters campa!gn !n the UK" However th!s !s an area where we have l!ttle control over the value cha!n and are rel!ant on work!ng w!th others"That !s why we rev!ewed our !nternal pos!t!on on packag!ng recycl!ng and extended producer respons!b!l!ty" We are work!ng w!th our ma&or markets to !ncrease our capac!ty to engage w!th governments and other stakeholders to f!nd the best pol!cy solut!ons to dr!ve up recycl!ng rates, wh!ch may vary from country to country"Although th!s !s clearly a challenge, !t !s also an opportun!ty to !nsp!re end-to-end solut!ons through collaborat!on on non-compet!t!ve pr!or!t!es, not only w!th!n the supply cha!n, but also w!th our customers and our peer compan!es"

39

Over half our 252 factor!es across the world, from $osta R!ca to Japan, now send no non-hazardous waste to landf!ll"We have set a stretch!ng new target – none of our factor!es across the world w!ll send any non-hazardous waste to landf!ll by the end of 2015"

ZERO WASTE TO LANDFILL IN HALF OUR FACTORIES


http://www.unilever.com/sustainable-living/wasteandpackaging

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Susta#nable Sourc#ng

SUSTAINABLE SOUR"IN!#ROWIN# FORTHE FUTURE

6

40


By 2020 we w"ll source 100% of our agr"cultural raw mater"als susta"nably& 10% by 2010! 30% by 2012! 50% by 2015! 100% by 2020%

SUSTAINABLE SOURCING

MORE THAN A THIRD OF OUR AGRICULTURAL RAW MATERIALS ARE NOW SOURCED SUSTAINABLY.

36% of our agr"cultural raw mater"als were susta"nably sourced by the end of 2012% Th"s exceeded our "nter"m m"lestone of 30%, and marks a s"gn"f"cant r"se from 24% "n 2011%

OUR PERSPE"TIVE Half of our raw mater!als come from farms and forests and the dec!s!ons that we make on who we source from, and how we work w!th them, can have profound !mpl!cat!ons on global resources, cl!mate change and farmer l!vel!hoods"There !s a clear bus!ness case for Un!lever to source !ts raw mater!als susta!nably" By tak!ng a long-term v!ew we can ensure secur!ty of supply, reduce costs and protect scarce resources" Th!s long-term approach can also create a w!n-w!n for farmers"

For example, ensur!ng the traceab!l!ty of palm o!l back to !ts source can help Un!lever secure suppl!es susta!nably wh!le also ensur!ng deforestat!on, land use and soc!al and commun!ty !ssues are managed respons!bly" By shar!ng !nformat!on about where products come from, we are also meet!ng emerg!ng consumer needs" L!pton tea and Magnum !ce cream’s Ra!nforest All!ance cert!f!cat!on and the new Knorr soup labell!ng on susta!nably grown tomatoes are lead!ng the way"

Our progress on sourc!ng has been strong" We are concentrat!ng f!rst on our top ten agr!cultural raw mater!al groups, wh!ch account for around two-th!rds of our volumes% palm o!l' paper and board' soy' sugar' tea' fru!t and vegetables' sunflower o!l' rapeseed o!l' da!ry !ngred!ents' and cocoa" We are on track for all these mater!als" But the task rema!ns !mmense, part!cularly where our volumes are small"


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Susta#nable Sourc#ng 41

OUR TAR!ETS • We w!ll purchase all palm o!l from

cert!f!ed susta!nable sources by 2015"

• We w!ll purchase all palm o!l susta!nably from cert!f!ed, traceable sources by 2020" (New target 2012")

OUR PERFORMAN"E 100% of palm o!l from susta!nable

sources by end 2012% 97% v!a #reenPalm cert!f!cates'† and

3% of palm o!l purchased from cert!f!ed, traceable sources (through a segregated supply) by end 2012"

OUR PERSPE"TIVEIn Apr!l 2012, we announced that we would reach our 2015 target three years ahead of schedule" Th!s has been ach!eved pr!mar!ly through the purchase of #reenPalm cert!f!cates" We recogn!se that these make a s!gn!f!cant contr!but!on to a more susta!nable palm o!l !ndustry, but they are only a f!rst step" To source susta!nably we need to be able to trace our palm o!l back to the plantat!on on wh!ch !t !s grown, and trace !ts route through cert!f!ed m!lls, transport and use" Our new target !s to source all our palm o!l from cert!f!ed, traceable sources by 2020" We began sourc!ng traceable palm o!l for our European markets !n 2011, from suppl!ers cert!f!ed by the Roundtable on Susta!nable Palm O!l" We are !nvest!ng (69 m!ll!on !n a palm kernel o!l process!ng plant !n Indones!a and cons!der!ng s!m!lar &o!nt venture !nvestments !n process!ng crude palm o!l der!vat!ves elsewhere to help us ach!eve traceable suppl!es"We are comm!tted to work!ng w!th suppl!ers, peers, compet!tors and governments to transform the !ndustry" Th!s w!ll prov!de assurances to consumers and help to break the l!nks between palm o!l, deforestat!on and land confl!ct"

OUR TAR!ETS • We w!ll source 75% of the paper and

board for our packag!ng from cert!f!ed susta!nably managed forests or from recycled mater!al by 2015" We w!ll reach 100% by 2020"

OUR PERFORMAN"E 63% of our paper and board came

from cert!f!ed susta!nably managed forests or from recycled mater!al by end 2012"

OUR PERSPE"TIVEOf the 63%, 87% compr!sed recycled f!bre and 13% cert!f!ed v!rg!n f!bre" In our 2011 Progress Report we est!mated that 60% of our paper and board came from susta!nable sources" S!nce then, we have made s!gn!f!cant !mprovements to our data collect!on and report!ng processes so that we now have more deta!led, aud!table data that does not rely on est!mates"In 2012 we rolled out susta!nable paper packag!ng cert!f!ed by the Forest Stewardsh!p $ounc!l for our Knorr wet soups !n Europe, and for our AdeS soy dr!nks !n Braz!l"

OUR TAR!ETS • We w!ll source susta!nably all soy beans

by 2014 and all soy o!ls by 2020"

OUR PERFORMAN"E 10% of soy o!l susta!nably sourced !n the

form of RTRS cert!f!cates by end 2012"

For soy beans, !n 2012 we made steady progress towards cert!f!ed suppl!es !n 2013"

OUR PERSPE"TIVEWe use soy o!l !n our spreads, mayonna!se and dress!ngs" We have supported the Round Table on Respons!ble Soy (RTRS) s!nce !t f!rst !ssued cert!f!cates and !n 2012 we were one of the largest s!ngle purchasers of cert!f!cates"We buy most of our soy o!l !n the US, where there !s currently no RTRS cert!f!ed soy" Over 2011-12 we explored the potent!al for an RTRS Nat!onal Interpretat!on for the US soy !ndustry w!th the Un!ted Soybean Board (USB) and WWF US, but were unsuccessful" However, we have &o!ned F!eld to Market% The Keystone All!ance for Susta!nable Agr!culture" Th!s br!ngs together US producers, agr!bus!nesses, food compan!es and conservat!on organ!sat!ons to create susta!nable outcomes for agr!culture" Its F!eldpr!nt $alculator enables growers to analyse how the!r management cho!ces !mpact natural resources and operat!onal eff!c!ency" Mak!ng use of th!s tool, we cont!nue to work w!th the USB as !t ref!nes !ts Soy Pledge’s assurance protocol for susta!nable soy" In 2012, we d!d not purchase as much susta!nable soy o!l as we hoped' however, !n 2013 we w!ll beg!n a p!lot w!th US soy farmers to track and ver!fy performance !mprovements to ach!eve equ!valence to our Susta!nable Agr!culture $ode" Soy beans make up about 10% of our soy purchases, for use !n our AdeS soy dr!nks" We expect to make the f!rst purchases of susta!nable beans !n 2013" We are determ!ned to make progress and have a roadmap !n place to meet our 2014 target"

SUSTAINABLE SOY

Around 14% of palm o!l !s now cert!f!ed as susta!nable by the RSPO, but only half the ava!lable cert!f!ed susta!nable palm o!l !s be!ng taken up !n the market" In 2012 Un!lever &o!ned key players !n !ndustry and government for the $h!na Susta!nable Palm O!l Supply $ha!n Forum, for talks on promot!ng faster uptake !n $h!na, the world’s second-largest consumer of palm o!l"

PROMOTING THE UPTAKE OF SUSTAINABLE PALM OIL IN CHINA

SUSTAINABLE PALM OIL

SUSTAINABLE PAPER AND BOARD

SUSTAINABLE SOUR"IN!6


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Susta#nable Sourc#ng42


OUR TAR!ETS • By 2015 we a!m to have the tea !n all

L!pton tea bags sourced from Ra!nforest All!ance $ert!f!ed™ estates" By 2020, 100% of Un!lever’s tea, !nclud!ng loose tea, w!ll be susta!nably sourced"

OUR PERFORMAN"E 75% of our L!pton tea bag blends

conta!ned a proport!on of Ra!nforest All!ance $ert!f!ed™ tea by end 2012"

Overall, 39% of the tea purchased for all our brands was sourced from Ra!nforest All!ance $ert!f!ed™ farms"

OUR PERSPE"TIVEIn 2007 we were the f!rst ma&or tea company to comm!t to susta!nable sourc!ng of tea on a large scale" We are on track to ach!eve our 2015 m!lestone and 2020 target"Over the last f!ve years Un!lever and our suppl!ers have !nvested heav!ly !n !mprov!ng farm!ng pract!ces among tea farmers, bu!ld!ng capac!ty to more than 170,000 tonnes of Ra!nforest All!ance cert!f!ed tea" For example, all the tea we source from Argent!na !s now Ra!nforest All!ance cert!f!ed, and th!s effort has contr!buted s!gn!f!cantly to the development of the tea !ndustry !n the M!s!ones Prov!nce" Between 2007 and the end of 2012, a total of around 450,000 farmers had been tra!ned to the Ra!nforest All!ance standard, !n partnersh!p w!th Un!lever, !n preparat!on for cert!f!cat!on"Dur!ng 2012 we cont!nued to partner w!th the Netherlands-based Susta!nable Trade In!t!at!ve (IDH) and the Kenya Tea Development Agency (KTDA) to co-fund farmer f!eld schools wh!ch promote susta!nable agr!culture through group learn!ng and f!eld observat!on techn!ques" Un!lever and IDH have &o!ntly agreed to !nvest a further (4 m!ll!on over the next two years to help take our susta!nab!l!ty !n!t!at!ves to scale !n Afr!ca, V!etnam and Ind!a" Th!s tra!n!ng w!ll not only benef!t Un!lever but also the tea !ndustry as a whole"

OUR TAR!ETS • We w!ll purchase 100% of our fru!t

from susta!nable sources by 2015"

• We w!ll purchase 50% of our top 13 vegetables and herbs from susta!nable sources by 2012 and 100% by 2015" Th!s accounts for over 80% of our global vegetable and herb volume"

OUR PERFORMAN"E 7% of fru!t purchased susta!nably by

end 2012"

59% of our top 13 vegetables and herbs purchased from susta!nable sources by end 2012"

OUR PERSPE"TIVEWe bought our f!rst susta!nable fru!t !n 2012" In 2013 we w!ll focus our efforts on work!ng w!th our suppl!ers and look!ng for further partnersh!p opportun!t!es as we are a small player !n th!s market" We have not made as much progress as we would have l!ked" Th!s makes our 2015 target challeng!ng, but we have a plan !n place wh!ch makes us conf!dent we w!ll reach !t" We exceeded our !nter!m target for our top 13 vegetables and herbs' more than half our suppl!ers had self-ver!f!ed the!r pract!ces accord!ng to the Un!lever Susta!nable Agr!culture $ode by the end of 2012" We now have 24 ‘Landmark Farms’ supply!ng vegetables for our Knorr brand and act!ng as agr!cultural role models for other suppl!ers" To meet our target, we have been work!ng w!th suppl!ers and the!r farmers around the world to !dent!fy areas for !mprovement and assess the!r progress us!ng the Un!lever Susta!nable Agr!culture $ode" We work w!th suppl!ers of on!ons, garl!c and tomatoes !n $al!forn!a, US and suppl!ers of gherk!ns and fru!t !n Ind!a" In Ind!a we a!m to boost y!elds to at least the global average"

SUSTAINABLE TEA SUSTAINABLE FRUIT AND VE!ETABLES

Knorr’s new Tomato and Mascarpone soup was launched !n France !n 2012 carry!ng the label ‘Made w!th susta!nably grown tomatoes’" Th!s !s the f!rst t!me we have promoted an !ngred!ent as susta!nably sourced w!th farmers ver!fy!ng the!r progress !n accordance w!th Un!lever’s Susta!nable Agr!culture $ode"We have been work!ng w!th tomato suppl!ers for the last 15 years to reach th!s po!nt" Bu!ld!ng traceab!l!ty has been key – to ensure that the tomatoes that reach our packs are susta!nably grown and traceable r!ght through the supply cha!n and manufactur!ng process"

KNORR’S FIRST PRODUCT WITH SUSTAINABLY SOURCED LABEL

OUR TAR!ETS • We w!ll source cocoa susta!nably

for our Magnum !ce cream by 2015" All other cocoa w!ll be sourced susta!nably by 2020"

OUR PERFORMAN"E 64% of cocoa for Magnum susta!nably

sourced through Ra!nforest All!ance cert!f!cat!on by end 2012" Overall, 43% of all cocoa sourced susta!nably"

OUR PERSPE"TIVEOn pack and onl!ne, Magnum shares w!th !ts consumers why !t has teamed up w!th Ra!nforest All!ance% to source h!gh-qual!ty cocoa beans, to !ncrease the !ncome of farmers and del!ver soc!al benef!ts such as !mproved health and safety pract!ces" To ach!eve cert!f!cat!on, we are work!ng w!th 20,000 small farmers across West Afr!ca" Our strateg!c supply partner, Barry $allebaut, runs farmer tra!n!ng schools" The schools work w!th groups of local farmers to bu!ld the!r sk!lls and knowledge around susta!nable cult!vat!on pract!ces" Those farmers then act as tra!ners, spread!ng good pract!ce amongst the!r commun!ty and encourag!ng more farmers to follow the programme"

SUSTAINABLE "O"OA

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Susta#nable Sourc#ng 43

http://www.youtube.com/watch?v=-eSJKNXsvwI%20

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Susta#nable Sourc#ng

OUR TAR!ETS • We w!ll source all sugar susta!nably

by 2020"

OUR PERFORMAN"E 8% of sugar susta!nably sourced by

end 2012"

OUR PERSPE"TIVEUn!lever has &o!ned the Bonsucro roundtable, a not-for-prof!t !n!t!at!ve that !s ded!cated to reduc!ng the env!ronmental and soc!al !mpacts of sugar cane product!on"In December 2012, we purchased the f!rst-ever Bonsucro susta!nable sugar cred!ts !n Braz!l" Although we are not a ma&or buyer of sugar, we were the f!rst Bonsucro member to buy cred!ts as we are comm!tted to the susta!nable product!on of sugar" In 2012, we also sourced our f!rst sugar from beet farmers !n France, #ermany and the Netherlands" Th!s was ver!f!ed accord!ng to our Susta!nable Agr!culture $ode"

OUR TAR!ETS • We w!ll source all da!ry produce

susta!nably by 2020"

OUR PERFORMAN"E 31% of da!ry produce susta!nably

sourced by end 2012"

OUR PERSPE"TIVEWe made s!gn!f!cant progress !n 2012, !ncreas!ng the proport!on of susta!nably sourced da!ry !ngred!ents from 10% !n 2011 to 31% !n 2012"Follow!ng a successful p!lot !n 2011, we have scaled up our work w!th one of the largest da!ry co-operat!ves !n the world, Fr!esland$amp!na" The company has !ts own susta!nab!l!ty comm!tments, such as the treatment of cows, graz!ng cond!t!ons, local b!od!vers!ty and waste !mpacts" These are al!gned w!th the standards of our Susta!nable Agr!culture $ode"

SUSTAINABLE SU!AR SUSTAINABLE DAIRY

OUR TAR!ETS • We w!ll source all rapeseed o!l


OUR PERFORMAN"E 16% of rapeseed o!l susta!nably sourced

by end 2012"

OUR PERSPE"TIVEDur!ng 2012, we worked w!th one of our ma&or suppl!ers, $arg!ll, to ver!fy #erman o!lseed rape product!on aga!nst the Un!lever Susta!nable Agr!culture $ode" Th!s bu!lds on a p!lot pro&ect we began !n 2009, wh!ch has helped us to agree annual !mprovement plans that go beyond European good agr!cultural pract!ce, !nclud!ng b!od!vers!ty act!on plans to enhance hab!tats" We now have a model that can be appl!ed to other o!lseed crops"

In the UK, we have worked closely w!th the susta!nable agr!culture N#O, LEAF (L!nk!ng Env!ronment And Farm!ng), and our suppl!er ADM to source cert!f!ed rapeseed o!l at scale for the f!rst t!me"

SUSTAINABLE RAPESEED OIL

OUR TAR!ETS • We w!ll source all sunflower o!l


OUR PERFORMAN"E 14% of sunflower o!l susta!nably sourced

by end 2012"

OUR PERSPE"TIVEIn 2011 we scoped p!lot pro&ects for susta!nable sunflower o!l !n several reg!ons, but these took longer than expected to come to fru!t!on" However, !n 2012, we were able to source our f!rst susta!nable sunflower o!l and are back on track to ach!eve our target" Our suppl!es were self-ver!f!ed accord!ng to our Susta!nable Agr!culture $ode and sourced from Hungary v!a $arg!ll and from South Afr!ca (see above)"

SUSTAINABLE SUNFLOWER OIL

44

In South Afr!ca we have been work!ng w!th our suppl!er $eoco to !mprove traceab!l!ty !n the supply cha!n" We !dent!f!ed a farm!ng commun!ty !n L!mpopo w!th good pract!ces that we could bu!ld on, then worked w!th the farmers by prov!d!ng f!nanc!al !ncent!ves to develop hybr!d seeds w!th h!gher y!elds" We can trace the o!ls r!ght back to the !nd!v!dual farms where the seeds were grown" Our next step w!ll be to scale up the pro&ect and roll !t out to d!fferent prov!nces and more farmers"

INVESTING IN TRACEABILITY FOR SUNFLOWER OIL

SUSTAINABLE SOUR"IN!6


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Susta#nable Sourc#ng

OUR TAR!ETS • We a!m to move to 100% cage-free eggs

for all our products,* !nclud!ng Ben & Jerry’s !ce cream and Hellmann’s, Amora and $alvé mayonna!ses

OUR PERFORMAN"E Our roll-out of products us!ng cage-free

eggs cont!nued, w!th around one-th!rd of our mayonna!se portfol!o !n North Amer!ca becom!ng cage-free by end 2012"

OUR PERSPE"TIVEIn Western Europe our Hellmann’s, Amora and $alvé brands have been 100% cage-free s!nce 2009 and by the end of 2011, 99% of all eggs used !n Ben & Jerry’s !ce cream m!x worldw!de were cage-free"We have made good progress !n North Amer!ca !n 2012, and are conf!dent that we w!ll ach!eve 100% cage-free eggs !n our mayonna!se portfol!o !n th!s reg!on over the com!ng years" Our progress has been helped by the fact that we have bu!lt long-term contracts to g!ve suppl!ers the conf!dence to !nvest !n cage-free product!on"

"A!E&FREE E!!S

OUR TAR!ETS • By 2013 we w!ll source all paper-based

off!ce mater!als for our top 21 countr!es from e!ther cert!f!ed susta!nable forests or recycled sources"

OUR PERFORMAN"E More than 95% of paper-based mater!als

from cert!f!ed susta!nable forests or recycled sources by September 2012"

OUR PERSPE"TIVEWe are mak!ng good progress towards our 2013 target and w!ll cont!nue to work closely w!th our suppl!ers to ensure the robustness of our report!ng process"

IN"REASE SUSTAINABLE SOUR"IN! OF OFFI"E MATERIALS

OUR TAR!ETS • All flavours of Ben & Jerry’s !ce cream

w!ll be Fa!rtrade cert!f!ed by 2013" (Target rev!sed 2012")

OUR PERFORMAN"E In 2012 we made steady progress

towards ach!ev!ng Fa!rtrade cert!f!cat!on on all our !ce cream flavours"

OUR PERSPE"TIVEIn Europe, our f!ve key commod!t!es (sugar, cocoa, coffee, van!lla and bananas) were converted to Fa!rtrade (FT) by the end of 2011" $onvert!ng the rest of our !ce creams !s a ma&or undertak!ng, !nvolv!ng around 200 !ngred!ents for nearly 90 flavours" In 2011 we reported setbacks !n the US wh!ch meant that we could not source all the FT-cert!f!ed !ngred!ents we needed for our US bus!ness" We have found that FT !ngred!ents are s!mply not ava!lable or do not meet our spec!f!cat!ons for a range of the !ngred!ents we use (such as some nuts and sp!ces)" So we have had to rev!se our target from our prev!ous ‘all !ngred!ents’ to ‘all flavours’" In 2012 we worked w!th Fa!rtrade Internat!onal to ad&ust our US convers!on plan and !dent!f!ed that by us!ng FT !ngred!ents for the f!ve ma&or commod!t!es !n all our base m!xes and for our chunks and sw!rls, all our !ce cream flavours w!ll qual!fy for FT cert!f!cat!on by 2013" The vast ma&or!ty of our !ce creams w!ll be ava!lable !n stores by the end of the year, w!th the rema!nder becom!ng ava!lable early !n 2014"

FAIRTRADE BEN & JERRY’S FUTURE CHALLENGESSusta!nable sourc!ng of all our raw mater!als rema!ns an amb!t!ous target, espec!ally where our market !nfluence !s lower because of our smaller volumes" We started w!th our top 10 agr!cultural mater!als and are now cons!der!ng the next 30" These account for around 20% of our volume, so progress !n these areas w!ll mark a s!gn!f!cant m!lestone" In 2012 we made cons!derable progress w!th !ngred!ents such as van!lla and meat" We recogn!se that ver!f!cat!on and cert!f!cat!on are not end goals" The real challenge !s to show the pos!t!ve !mpacts that susta!nab!l!ty can have on the l!ves of farmers, the env!ronment and the commun!t!es !n wh!ch they l!ve and work"These !ssues are complex to tackle" Work!ng w!th others !s a cr!t!cal success factor% by transform!ng global supply cha!ns together, we can move faster and also !ncrease awareness among consumers of the benef!ts of susta!nably sourced products" Our non-agr!cultural (and therefore non-renewable) raw mater!als have also been a focus !n 2012" We have been mapp!ng the landscape for m!neral m!n!ng to !dent!fy susta!nab!l!ty !mprovements and we now have v!s!b!l!ty on the or!g!ns and extract!on s!tes for about half our portfol!o" We have also looked !nto ex!st!ng !n!t!at!ves and programmes to reduce the env!ronmental, health and safety !mpacts of the raw mater!als we use (‘product stewardsh!p programmes’)"

45

The Un!lever Susta!nable Agr!culture $ode was launched !n 2010, after 15 years’ work" Our susta!nable sourc!ng programme rel!es on compl!ance w!th the $ode, through self-assessment or through external cert!f!cat!on standards"2012 was our f!rst year of gett!ng to scale and gave us deeper !ns!ghts about suppl!ers’ challenges" We have now susta!nably sourced tomatoes, da!ry, rapeseed, sunflower seed, sugar beet and potatoes, demonstrat!ng the $ode’s flex!b!l!ty across crops and countr!es" $h!nese tomato farmers have s!gn!f!cantly reduced fert!l!zer use wh!le !ncreas!ng y!elds, and we are track!ng pest !nfestat!on us!ng traps and smartphones, lead!ng to lower pest!c!de use and better qual!ty crops for Med!terranean tomato farmers"

OUR SUSTAINABLE AGRICULTURE CODE

*Where allowed by local leg!slat!on"

http://www.unilever.com/sustainable-living/sustainablesourcing


BETTER LIVELIHOODSSUPPORTIN# E$ONOMI$DEVELOPMENT

7

Better L#vel#hoods46


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Better L#vel#hoods

By 2020 we w"ll engage w"th at least 500,000 smallholder farmers and 75,000 small-scale d"str"butors "n our supply network%

BETTER LIVELIHOODS

WE WILL WORK WITH OTHERS INCLUDING INDUSTRY, NGOS AND TRADE UNIONS TO MAINSTREAM HUMAN AND LABOUR RIGHTS INTO OUR BUSINESS.

We have "ncreased the number of tea farmers tra"ned "n susta"nable pract"ces to around 450,000% The next step "s to develop a methodology to assess "mprovement "n smallholder l"vel"hoods% We have consol"dated our small-scale d"str"butors programme, reach"ng 48,000 entrepreneurs%

47

OUR PERSPE"TIVE Our bus!ness contr!butes to the econom!c well-be!ng of many commun!t!es across our value cha!n, whether through employment, upsk!ll!ng or l!nkage !nto our extended supply cha!n" In develop!ng and emerg!ng markets we have an even greater !mpact on l!vel!hoods" Th!s !s because our suppl!er and d!str!but!on networks !nvolve m!ll!ons of small-scale farmers, d!str!butors and reta!lers" Most smallholder farmers grow the!r crops on less than 2 hectares of land" They are often held back from !mprov!ng the!r !ncomes because of the!r lack of knowledge of up-to-date farm!ng pract!ces" If smallholders have access to tra!n!ng, better qual!ty seeds and fert!l!ser they can s!gn!f!cantly !ncrease the!r y!elds" Th!s benef!ts Un!lever" As we grow our bus!ness !n develop!ng and emerg!ng markets, we w!ll be sourc!ng more

agr!cultural mater!als grown by smallholders" If they prosper and the!r !ncomes !mprove, they w!ll be able to !nvest and we w!ll have greater certa!nty of supply and, often, better qual!ty raw mater!als for our food products" We have expanded the number of smallholders we reach w!th tra!n!ng and !ncreased our !nvestment" But we st!ll have much to do to demonstrate the !mpact of our work on the!r l!vel!hoods, and how we are engag!ng w!th women farmers" Smallholders and the!r pract!ces are d!verse wh!ch makes the task of measur!ng the benef!ts of our !ntervent!ons more d!ff!cult" Nevertheless we want to co-develop a s!mple, cost-effect!ve method to show that our !ntervent!ons do !mprove smallholders’ l!vel!hoods" As the world’s largest purchaser of black tea we led the way w!th Ra!nforest All!ance to cert!fy our tea supply" We are now

purchas!ng cocoa cert!f!ed by Ra!nforest All!ance and we are part of the Roundtable on Susta!nable Palm O!l’s (RSPO) Smallholders Task Force where we are collect!vely work!ng on how best to ach!eve susta!nable cert!f!cat!on for palm o!l smallholders" Un!lever !s comm!tted to respect!ng and promot!ng human r!ghts and good labour pract!ces" The adopt!on of the Un!ted Nat!ons #u!d!ng Pr!nc!ples on Bus!ness and Human R!ghts has led us to re-th!nk how we should !ntegrate human and labour r!ghts strateg!es across our bus!ness and value cha!n" To tackle th!s, !n early 2013 we created a new role of #lobal V!ce Pres!dent for Soc!al Impact" We recogn!se that we have more work to do !n th!s area"


Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Better L#vel#hoods

BETTER LIVELIHOODS

OUR TAR!ETS • Our goal !s to engage w!th at least

500,000 smallholder farmers !n our supply network" We w!ll help them !mprove the!r agr!cultural pract!ces and thus enable them to become more compet!t!ve" By do!ng so we w!ll !mprove the qual!ty of the!r l!vel!hoods"

OUR PERFORMAN"E We cont!nue to engage w!th partners

to develop an effect!ve methodology to assess !mprovement !n l!vel!hoods !n our supply cha!n network"

OUR PERSPE"TIVEThrough our supply partnersh!ps we have helped to tra!n 450,000 tea farmers !n susta!nable pract!ces, around 150,000 more than !n 2011" Over 300,000 of them have ach!eved Ra!nforest All!ance cert!f!cat!on, the ma&or!ty of whom are smallholders !n Kenya" Elsewhere we have supported cocoa farmers to ga!n Ra!nforest All!ance cert!f!cat!on !n West Afr!ca" We are focus!ng our effort on !ntervent!ons wh!ch !mprove agr!cultural pract!ces" We want to demonstrate that these enhance l!vel!hoods" Hav!ng exam!ned ex!st!ng assessment methodolog!es, we dec!ded to consult N#O and supply cha!n partners on how to develop a l!vel!hood assessment methodology wh!ch !s s!mple, qu!ck and affordable" Our goal !s to develop and test th!s methodology !n 2013" Although we st!ll have much to do to demonstrate the !mpact of our work, our procurement standards and our ab!l!ty to share best pract!ce mean we can have an !mportant !nfluence on the w!der sector" In our Sunr!se partnersh!p w!th Oxfam #B, we have moved from a s!ngle programme to learn!ng by engag!ng w!th a number of smallholder farmer programmes run by our suppl!ers" The a!m !s to develop clear bluepr!nts for !nclus!ve bus!ness models, wh!ch del!ver both commerc!al success and help !mprove soc!al, env!ronmental and econom!c cond!t!ons"

OUR TAR!ETS Shakt!, our door-to-door sell!ng operat!on !n Ind!a, prov!des work for large numbers of people !n poor rural commun!t!es" • We w!ll !ncrease the number of Shakt!

entrepreneurs that we recru!t, tra!n and employ from 45,000 !n 2010 to 75,000 !n 2015"

We operate s!m!lar schemes !n Bangladesh, Sr! Lanka and V!etnam wh!ch we are also comm!tted to expand!ng"

OUR PERFORMAN"E 48,000 entrepreneurs (‘Shakt! ammas’)†

were sell!ng products to over 3"3 m!ll!on households !n over 135,000 Ind!an v!llages !n 2012"

OUR PERSPE"TIVERecru!t!ng and tra!n!ng female entrepreneurs (Shakt! ammas) !s a resource-!ntens!ve process" Dur!ng 2012 we worked w!th our ex!st!ng entrepreneurs to help them grow and develop the!r bus!nesses" Th!s has helped to consol!date and strengthen our network" We are plann!ng to expand our rural d!str!but!on over 2013-15 to reach more small, remote v!llages" Engag!ng more Shakt! ammas !s an !mportant part of th!s plan"Shakt! sales people have proved successful !n !ncreas!ng our presence !n rural areas and bu!ld!ng strong local relat!onsh!ps w!th consumers, wh!ch encourages brand loyalty" The model we use !mproves the l!ves of our sales people and the!r fam!l!es, usually doubl!ng the !ncome of the household"The programme was extended !n 2010 to !nclude ‘Shakt!maans’ who are typ!cally the husbands or brothers of the Shakt! ammas" They sell our products by b!cycle to surround!ng v!llages, cover!ng a larger area than Shakt! ammas can do on foot" There are over 30,000 Shakt!maans across Ind!a and we have plans to enlarge the programme !n 2013" These 30,000 Shakt!maans complement our 48,000 Shakt! ammas"

SUPPORTIN! SMALL&S"ALEDISTRIBUTORS

7

In 2012 we comm!ss!oned an !ndependent assessment to evaluate l!vel!hoods, focus!ng espec!ally on the !mpact Ra!nforest All!ance (RA) cert!f!cat!on has had on smallholders and the!r farm workers !n our tea supply cha!n !n Kenya" The study conf!rmed that RA-cert!f!ed farmers and the!r workers exper!ence greater !mprovements than non-RA-cert!f!ed farmers !n several areas of soc!al, econom!c and env!ronmental well-be!ng" However th!s !s not un!form, as !n some areas, non-cert!f!ed farmers reported s!m!lar pos!t!ve !mpacts" Th!s !s a complex area, and we are assess!ng the results and undertak!ng other stud!es w!th N#Os and other partners to understand the best way to ach!eve the r!ght outcomes"

ASSESSING OUR IMPACT

48

In 2012 we !mproved our Shakt! rural sell!ng operat!on by part-fund!ng mob!le phones for a number of our sales women, equ!pp!ng them w!th a s!mple appl!cat!on to dr!ve sales" Th!s low-cost but very effect!ve mob!le technology helps them sell the r!ght products, sav!ng t!me dur!ng sales calls wh!le !ncreas!ng sales and earn!ngs"

TECHNOLOGY INCREASES SHAKTI SALES AND EARNINGS

HELPIN! SMALLHOLDERFARMERS



Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 Better L#vel#hoods

BETTER LIVELIHOODSSUSTAINABLE, PROFITABLE !ROWTH DEPENDS ON OUR PEOPLE We expect all our employees to observe h!gh standards of behav!our !n the!r everyday work, reflect!ng our values of !ntegr!ty, respect, respons!b!l!ty and demonstrat!ng a p!oneer!ng sp!r!t" Susta!nable, prof!table growth can only be ach!eved !f we have the r!ght people work!ng for an organ!sat!on that !s f!t to w!n, underp!nned by a culture !n wh!ch performance !s always al!gned to our values"

HUMAN AND LABOUR RI!HTSOur $ode of Bus!ness Pr!nc!ples and Suppl!er $ode set out our comm!tment to human and labour r!ghts and spec!f!cally to treat our employees and bus!ness partners w!th d!gn!ty, !ntegr!ty and fa!rness" The Board of Un!lever !s respons!ble for ensur!ng adherence to these comm!tments and our sen!or management has respons!b!l!ty for oversee!ng the!r !mplementat!on and ensur!ng that any breaches of our $odes are !nvest!gated" We expect and encourage employees to br!ng any breach of our $odes to our attent!on" L!ke many other compan!es, we have been undertak!ng a comprehens!ve assessment of how best to operat!onal!se and !mplement the UN #u!d!ng Pr!nc!ples on Bus!ness and Human R!ghts, !nclud!ng rev!ew!ng our $ode Pol!c!es and ensur!ng al!gnment w!th our Susta!nable L!v!ng Plan" In early 2013 we appo!nted a #lobal V!ce Pres!dent for Soc!al Impact to lead th!s !ntegrat!on"Th!s assessment was also !nformed by a two-year research pro&ect by Oxfam, Labour R!ghts !n Un!lever’s Supply $ha!n, publ!shed !n early 2013" Oxfam used our V!etnamese operat!ons as !ts ma!n case study and made s!x recommendat!ons for our bus!ness" These are based around support!ng workers’ l!vel!hoods, prov!d!ng human r!ghts tra!n!ng w!th!n the organ!sat!on, !mplement!ng more ways !n wh!ch workers can ra!se areas of concern and work!ng closely w!th suppl!ers and partners to ensure standards are met"

We are rev!ew!ng our V!etnamese supply cha!n !n l!ght of the recommendat!ons" The report also has !mpl!cat!ons for our bus!ness globally and we are study!ng how we can promote susta!nable l!vel!hoods for all our workers and those !n our value cha!ns and w!ll rev!ew our use of temporary workers" We w!ll look at our suppl!ers’ understand!ng of our Suppl!er $ode and ensure that our own operat!ons meet the same standards as we expect of our suppl!ers" We w!ll also develop key performance !nd!cators on labour and human r!ghts" Recogn!s!ng that progress can best be made by work!ng together, we w!ll work w!th others !nclud!ng !ndustry, N#Os, trade un!ons and bus!ness partners to ma!nstream the !ntegrat!on of human and labour r!ghts !nto our bus!ness"

DIVERSITY We celebrate the d!vers!ty of people, bel!eve !n !nclus!on and respect people for who they are and what they br!ng" Women make up more than 75% of our consumer base" Our workforce must take account of th!s" The proport!on of women !n management pos!t!ons !ncreased from 39% !n 2011 to 41% !n 2012" After a decade of steady !mprovement, ach!ev!ng an !ncrease of more than 1% shows progress – but we recogn!se there !s st!ll a long way to go" We have three women Non-Execut!ve D!rectors on the Board (25%) and propose to appo!nt two more !n 2013" In 2012 we appo!nted a second woman to the Un!lever Leadersh!p Execut!ve"

FUTURE CHALLENGESFor smallholder farmers, our challenge !s to develop an effect!ve yet affordable methodology for !mpact assessment" In some p!lot stud!es, evaluat!on costs more than the !ntervent!on !t !s assess!ng" Even then the ev!dence can be uncerta!n due to lack of basel!ne data" We w!ll cont!nue to work w!th partners such as Oxfam, #rameen and the B!ll and Mel!nda #ates Foundat!on to ref!ne our understand!ng of what !s pract!cal"We are work!ng to !ntegrate respect for human and labour r!ghts throughout our value cha!n, !nclud!ng !ssues around land r!ghts, women and commun!ty d!alogue"

49

BOOSTING WOMEN’S INCOMESThe !mpact of econom!cally empower!ng women has a magn!f!er effect on l!ft!ng fam!l!es out of poverty" For example, !n Ind!a, as a result of a partnersh!p between the Maharashtra government and H!ndustan Un!lever, a woman entrepreneur was able to !nvest !n a tomato process!ng plant, contract!ng suppl!es from 600 smallholder farmers" We tra!ned the farmers !n susta!nable agr!cultural pract!ces wh!ch contr!buted to h!gh-qual!ty tomatoes for our K!ssan Ketchup brand" In our Shakt! rural sales operat!on, earn!ngs usually double household !ncomes" For many, these new earn!ngs mean they can real!se the!r amb!t!on to prov!de a good educat!on for the!r ch!ldren"

www.unilever.com/sustainable-living/betterlivelihoods

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012!overnance and External "ommentary

!OVERNAN"E AND EXTERNAL"OMMENTARY

50

!OVERNAN"E Strong governance structures enable us to del!ver our Plan, real!se the benef!ts for the bus!ness and draw on relevant expert !nput# Implementat!on and del!very of the Plan are mon!tored by the Un!lever Leadersh!p Execut!ve – the leaders of our categor!es, reg!ons and funct!ons headed by our $EO"The Un!lever Susta!nable L!v!ng Plan Steer!ng Team supports the Execut!ve" The Team !ncludes our $ategory Pres!dents and the leaders of key bus!ness funct!ons"The Board’s $orporate Respons!b!l!ty $omm!ttee compr!ses three !ndependent Non-Execut!ve D!rectors" The!r role !s to oversee Un!lever’s conduct as a respons!ble bus!ness, !nclud!ng mon!tor!ng the progress – and potent!al r!sk – of the Plan and ensur!ng th!s !s fed back to the Board"Further !ndependent op!n!on on our strategy comes from our external adv!sers - the Un!lever Susta!nable Development #roup and spec!al!st groups such as our Susta!nable Sourc!ng Adv!sory Board" We !nv!ted some members of these groups to comment on progress !n the second year of our Plan"

UNILEVER SUSTAINABLE DEVELOPMENT !ROUPThe #roup’s expert!se covers a broad range of env!ronmental, soc!al and econom!c !ssues !n developed and develop!ng countr!es" It meets tw!ce a year w!th our sen!or leaders to cr!t!que our strategy and share !ns!ghts on susta!nab!l!ty !ssues and trends" The!r perspect!ves feed !nto our leadersh!p teams and our Board’s $orporate Respons!b!l!ty $omm!ttee"

JONATHON PORRITT FOUNDER DIRE$TOR

OF FORUM FOR THE FUTURE, UK

Un!lever has been ‘do!ng susta!nab!l!ty’ !n one way or another for a very long t!me – some would argue from the f!rst moment back !n the late 19th century when the founder of the company f!rst comm!tted to produc!ng affordable soap to help tackle the hyg!ene cond!t!ons of V!ctor!an Br!ta!n"But !t’s only !n the last few years that susta!nab!l!ty has worked !ts way through to the heart of the bus!ness – and !n Un!lever, that means the brands" Wh!lst there have always been a handful of brands that had a great susta!nab!l!ty story to tell (Dove, L!pton, L!febuoy and so on), all the ma&or brands are now be!ng asked to ‘own’ the!r share of the targets outl!ned !n the Un!lever Susta!nable L!v!ng Plan, and to share that w!th consumers, creat!vely and compell!ngly, !n order to ‘make susta!nable l!v!ng commonplace’"That’s where the real energy needs to come from now, reflected d!fferently !n all the d!fferent countr!es where Un!lever operates"By any reckon!ng, th!s !s one of the most amb!t!ous ‘change management’ programmes go!ng on !n any b!g company today" As th!s Report shows, progress !s good, and some !nd!v!dual pro&ects are hugely !nsp!r!ng" But there !s st!ll a long way to go before the USLP !s l!ved and breathed by every s!ngle part of the bus!ness" For !nstance, !t’s only !n the last couple of years that F!nance has ser!ously addressed the challenge of al!gn!ng all those processes focused on ‘the numbers’ of the USLP" ‘Doubl!ng the s!ze of the company’ and ‘halv!ng the footpr!nt’ have to become one and the same amb!t!on – not separate dr!vers" ‘Ma!nstream!ng susta!nab!l!ty’ sounds l!ke such an easy th!ng to do" But !t really !sn’t)

Jonathon Porr#tt Founder D!rector of Forum for the Future, UKMal#n# Mehra Founder and $EO of the $entre for Soc!al Markets, Ind!a Ma Jun Founder D!rector of the Inst!tute of Publ!c and Env!ronmental Affa!rs (IPEA), $h!naHel#o Mattar Pres!dent of the Akatu Inst!tute for $onsc!ous $onsumpt!on, Braz!l

http://www.unilever.com/sustainable-living/ourapproach/Governance

http://www.unilever.com/sustainable-living/ourapproach/Governance

!OVERNAN"E

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012 !overnance and External "ommentary 51

1

7

sourc!ng of raw mater!als and engag!ng smallholders – and the var!ous areas that !mpact susta!nab!l!ty !n our value cha!n, such as b!od!vers!ty, the use of chem!cals, labour cond!t!ons and poverty allev!at!on"

SUSTAINABLE SOUR"IN! ADVISORY BOARD

The Board compr!ses experts from d!verse backgrounds such as N#Os, research !nst!tutes, compan!es and academ!a" Its members adv!se our procurement funct!on on key aspects of our Plan – the susta!nable

Janet Barber Independent, UKDav#d Br#ght Oxfam #B, UKTom BurkeIndependent, UK"ol#n "hartres Independent, Sr! Lanka

Ken !#llerUn!vers!ty of Wagen!ngen, NetherlandsAlan Kn#ght Independent, UK"hr#stophe L#ebon Intertek, Hong KongR#chard Perk#ns WWF-UK, UK

"am#lla Toulm#nInternat!onal Inst!tute for Env!ronment and Development, UKAnne Wall#n Dow $hem!cal, Sw!tzerlandTens#e WhelanRa!nforest All!ance, US

DAVID BRI!HT OXFAM )B, UK

I would note two areas of progress around the USLP" The f!rst !s !ts target to del!ver pos!t!ve soc!al !mpact by engag!ng 500,000 smallholders to !mprove the!r l!vel!hoods" To del!ver on th!s target Un!lever has both begun to !dent!fy !ts own act!ons and al!gn act!ons w!th mult!ple suppl!ers" Th!s requ!res clar!ty on wh!ch men and women smallholders are targeted and on how r!sk and benef!ts can be more fa!rly shared through supply cha!ns to !mprove smallholder l!vel!hoods" #!ven the extended nature of global supply cha!ns, the work to !dent!fy smallholders and the ongo!ng effort to mon!tor th!s change at farm level should not be under-est!mated"Secondly, Un!lever works hard to br!ng together other compan!es, academ!a and c!v!l soc!ety to try to both lead and learn on del!ver!ng susta!nab!l!ty as a sector, for example !n putt!ng land grabs and b!ofuels on the agenda of the B20 Task Force on Food Secur!ty !n 2012"

RI"HARD PERKINS WWF*UK, UK

WWF strongly advocates that compan!es make the!r sourc!ng more susta!nable by buy!ng to !ndependent standards (th!rd-party ver!f!ed, w!th mult!-stakeholder governance and ISEAL compl!ant, eg Forest Stewardsh!p $ounc!l)" WWF does not accept self-ver!f!cat!on as equ!valent to such !ndependent standards"There are a huge number of products for wh!ch there !s no appl!cable !ndependent standard" In these cases, Un!lever’s 100% susta!nable sourc!ng strategy has to cons!der other ways of mak!ng product!on more susta!nable" Self-ver!f!cat!on !s one approach that WWF supports Un!lever us!ng !n these cases" Self-ver!f!cat!on should not be used !n cases where a relevant !ndependent standard ex!sts" I have suggested !n my adv!ce to Un!lever that self-ver!f!cat!on m!ght be buttressed by stat!st!cal sampl!ng of those subm!tt!ng self-ver!f!cat!on to add conf!dence"It !s great to see Un!lever employ!ng self-ver!f!cat!on to make progress on susta!nab!l!ty w!th suppl!ers where !ndependent standards do not ex!st"

MALINI MEHRA FOUNDER AND $EO OF THE $ENTRE FOR SO$IAL MARKETS, INDIA

Th!s year’s Progress Report cont!nues the ‘warts and all’ trad!t!on Un!lever adopted w!th !ts f!rst report"In a world of fakery and green-wash, Un!lever stands tall for be!ng d!fferent" Th!s !s not a report that shouts ‘we got !t all r!ght’ but dares to say, when !t needs to, ‘we’re not on target – yet’ and ‘we f!nd th!s very d!ff!cult’"Th!s modesty !s ent!rely appropr!ate for the t!mes" Today’s readers don’t want tough challenges h!dden from v!ew" They want to know what they are and how the company !ntends to address them" For example, how to del!ver on the soc!al d!mens!ons of susta!nab!l!ty – someth!ng that requ!res more complex soc!o-cultural !ntervent!ons" Or how to reduce grow!ng !nequal!t!es and wealth gaps – wh!ch w!ll as profoundly affect the context Un!lever works !n globally as much as resource secur!ty" Un!lever has made huge str!des !n !ts efforts to support vulnerable groups !n !ts supply cha!n – from smallholder farmers to rural women entrepreneurs" It now needs to bu!ld on that base to more act!vely address the grow!ng soc!o-econom!c d!v!des that w!ll bedev!l del!very of the Plan" The good news- Un!lever knows th!s !s a problem area and has appo!nted a #lobal V!ce Pres!dent for Soc!al Impact to address !t" In a post-MD# world, th!s !s one area where Un!lever’s stra!ght-talk!ng leadersh!p w!ll be needed more than ever"

Un#lever Susta!nable L!v!ng Plan% Progress Report 2012Ver#f#cat#on and Metr#cs52

VERIFI"ATIONAND METRI"S

MATERIALITYWe address the mater!al susta!nab!l!ty !ssues for our company through the Un!lever Susta!nable L!v!ng Plan and !n our approach to runn!ng a respons!ble bus!ness" We def!ne mater!al!ty as% (1) the degree to wh!ch an !ssue !s al!gned w!th our v!s!on and purpose, brand portfol!o and geography' (2) the potent!al !mpact on our own operat!ons, or on our sourc!ng and consumers' (3) the extent of Un!lever’s !nfluence on the !ssue' (4) the !mportance of an !ssue to our key stakeholders"Our Plan w!ll evolve as we ref!ne our understand!ng and !dent!fy further mater!al !ssues" For example, we are study!ng how we could take a more hol!st!c approach to !mprov!ng hyg!ene by address!ng san!tat!on wh!le del!ver!ng susta!nable growth for our bus!ness (see page 13)"We run a programme of stakeholder engagement to help us understand external v!ews on the !ssues relevant to our bus!ness, and to !dent!fy people and partners we can learn from" Dur!ng 2012, we ran events to gather feedback on the Plan !n 25 countr!es" We also launched the Susta!nable L!v!ng Lab, a 24-hour onl!ne d!alogue between Un!lever managers and external experts wh!ch attracted part!c!pants from 77 countr!es and generated valuable !ns!ghts"

ASSURAN"E 2011External assurance of susta!nab!l!ty performance !nd!cators !s !mportant to us and the env!ronmental report!ng of our manufactur!ng operat!ons has been !ndependently assured s!nce 1996"In 2012 we appo!nted Pr!cewaterhouse-$oopers LLP (Pw$) to prov!de !ndependent assurance of the Un!lever Susta!nable L!v!ng Plan" Pw$’s scope of work was to prov!de l!m!ted assurance of a number of performance measures selected on the bas!s of the!r mater!al!ty to the Plan"The work !ncluded !nterv!ews w!th the Un!lever Susta!nable L!v!ng Plan Steer!ng Team and w!th the managers respons!ble for the data underp!nn!ng the e!ght measures selected for assurance" These measures covered% L!febuoy' Pure!t' salt' concentrated/compacted laundry products' !ce cream freezer cab!nets' One R!nse fabr!c cond!t!oners' palm o!l' and Shakt! entrepreneurs"Pw$’s conclus!on, together w!th Un!lever’s Bas!s of Preparat!on for the report!ng per!od 1 January - 31 December 2011, !s publ!shed on our webs!te, alongs!de l!m!ted assurance carr!ed out by Delo!tte on e!ght env!ronmental and two occupat!onal safety performance !nd!cators for the per!od 1 January - 31 December 2011"Pw$’s conclus!ons have been shared w!th the Un!lever Leadersh!p Execut!ve, the Un!lever Susta!nable L!v!ng Plan Steer!ng Team and those respons!ble for the !nd!cators" We are act!ng upon Pw$’s recommendat!ons and the lessons learned are help!ng to !nform our future work"The .nd!ngs from the .rst year of assurance of the Plan’s metr!cs have prov!ded valuable !ns!ghts, for example on !dent!fy!ng appropr!ate r!sk assessment processes for data preparat!on and report!ng, and !mprov!ng the documentat!on and repl!cab!l!ty of calculat!ons" The .nd!ngs also prompted us to rev!ew and strengthen our governance"

ASSURAN"E TO 2020 For the future assurance of the USLP, start!ng w!th the per!od 2012, we have developed a phased approach to 2020 that w!ll enable us to obta!n assurance over the seven comm!tments wh!ch are central to our Plan" In the trans!t!on to assur!ng the seven comm!tments, underly!ng metr!cs support!ng each comm!tment w!ll be selected on the bas!s of cr!t!cal!ty, follow!ng a deta!led !nternal assessment" Our def!n!t!on of cr!t!cal!ty !ncludes the follow!ng factors%• mater!al!ty – the !mportance of the

metr!c’s contr!but!on to the comm!tment• matur!ty – the metr!c’s stage of

development • prox!m!ty to target complet!on"Although our env!ronmental !nd!cators for manufactur!ng and our occupat!onal health and safety !nd!cators do not d!rectly contr!bute to the ach!evement of our seven comm!tments, we cons!der them cruc!al for our bus!ness and they w!ll always be assured"In add!t!on, we recogn!se that the need may somet!mes ar!se for external assurance of spec!f!c metr!cs, such as those w!th a h!gher reputat!onal r!sk" Unl!ke f!nanc!al account!ng standards or carbon report!ng, there are currently no !ndustry norms or globally recogn!sed pract!ces for evaluat!ng many of the targets !n the Un!lever Susta!nable L!v!ng Plan" It !s groundbreak!ng work that w!ll evolve over the com!ng years"

http://www.unilever.com/sustainable-living/assurancedataandcommentary

http://www.unilever.com/sustainable-living/assurancedataandcommentary

http://www.unilever.com/sustainable-living/ourapproach/reportingourprogress/

!OVERNAN"E

OUR METRI"S Our Plan has three b!g goals to !mprove health and well-be!ng, reduce env!ronmental !mpact and enhance l!vel!hoods" Support!ng these goals are seven comm!tments underp!nned by targets spann!ng our soc!al, env!ronmental and econom!c performance across the value cha!n"In our 2011 Progress Report we presented our people and workplace targets as a standalone set of targets" In 2012 we !ncorporated these targets !nto the ma!n body of the plan"L!sted !n the box are the key metr!cs we use to measure progress on our comm!tments"

OUR ENVIRONMENTAL FOOTPRINT PER "ONSUMER USE To measure our b!g goal to halve the env!ronmental footpr!nt of the mak!ng and use of our products ‘per consumer use’* for #H#, water and waste !s a complex process" It requ!res a deta!led analys!s of the water, waste and greenhouse gas !mpacts of thousands of products spread across 14 countr!es" The calculat!on accounts for 70% of our volumes" For each product, we analyse sourc!ng and !ngred!ent !nformat!on, manufactur!ng !mpacts and data on consumer hab!ts (wh!ch often vary by country)" In 2012 we !nvested !n an automated system to !mprove the speed and accuracy of our footpr!nt calculat!ons, wh!ch we measure on a roll!ng-year bas!s from 1 July to 30 June" $urrently, th!s system only allows us to compare our footpr!nt to 2010 rather than our or!g!nal 2008 basel!ne"

HEALTH AND HY!IENE (PA!E 12)The number of people reached on a cumulat!ve bas!s by an !ntervent!on wh!ch, based on past stud!es, can be expected to result !n susta!ned, pos!t!ve behav!our change"

NUTRITION (PA!E 18)The percentage of products wh!ch meet the h!ghest nutr!t!onal standards, based on globally recogn!sed d!etary gu!del!nes for all four pr!or!ty nutr!ents% salt, saturated and trans fat and sugar" From 2012, these are measured by volume rather than by product"

!REENHOUSE !ASES (PA!E 24)#reenhouse gases per consumer use% $O2 equ!valents across the product l!fecycle (grams)"*Our metr!c measures the greenhouse gas em!ss!ons assoc!ated w!th the l!fecycle of a product from raw mater!als, to manufactur!ng to consumer use and d!sposal"

WATER (PA!E 30)Water per consumer use !n water-scarce countr!es% water added to the product plus the water used by consumers !n water-scarce countr!es (l!tres)"*+

Our metr!c excludes water used !n agr!culture, and water used !n our manufactur!ng operat!ons wh!ch we measure as part of our eco-eff!c!ency programme (see Reduce water use !n our manufactur!ng process, page 33)"

WASTE (PA!E 34)Waste per consumer use% packag!ng and product leftovers that have not been reused, recycled or recovered (grams)"*We def!ne waste as the amount of product left !n the pack, and the amount of packag!ng that ends up e!ther !n landf!ll or as l!tter, !e the amount of packag!ng that !s not recycled, reused or recovered for energy recapture" Our metr!c requ!res the use of publ!shed nat!onal !nd!ces for recycl!ng and recovery, or our own est!mates where these are not ava!lable"The metr!c excludes the waste generated by our manufactur!ng operat!ons wh!ch we measure as part of our eco-eff!c!ency programme (see Reduce waste from our manufactur!ng, page 38)"

SUSTAINABLE SOUR"IN! (PA!E 40)Raw or packag!ng mater!al sourced from ver!f!able susta!nable renewable sources or made from recycled mater!als (% by we!ght)"

BETTER LIVELIHOODS (PA!E 46)We recogn!se that !t !s d!ff!cult to prov!de ev!dence of !mprovements !n l!vel!hoods" We are develop!ng an appropr!ate methodology to do th!s"

* The metr!cs for our comm!tments for greenhouse gases (#H#), water and waste are expressed aga!nst a basel!ne of 2008 and on a ‘per consumer use’ bas!s" Th!s means a s!ngle use, port!on or serv!ng of a product, eg the #H# !mpact of dr!nk!ng a s!ngle cup of tea' the water needed for one ha!r wash w!th shampoo' or the waste assoc!ated w!th one serv!ng of soup"

+ Water-scarce countr!es% $h!na, Ind!a, Indones!a, Mex!co, South Afr!ca, Turkey and USA, represent!ng around half the world’s populat!on"

OUR METRI"S

53

PRODU"ED BY Un!lever Susta!nable Bus!ness Team ADVI"E ON REPORTIN! $orporate $!t!zensh!pDESI!N Red Letter Des!gnPRINTIN! $harterhouse (ISO 9000 & 14001)PAPER Amadeus 100% Recycled S!lk – 100% recycled content, 100% de-!nked post-consumer waste

FEATURE PHOTO!RAPHY K!eran Doherty, Igor Emmer!ch, Ph!l!p #atward, #etty Images, $hr!s Moyse, Mart!n Wanyo!ke"

If you have f!n!shed w!th th!s report and no longer w!sh to reta!n !t, please pass !t on to other !nterested readers or d!spose of !t !n your recycled paper waste" Thank you"

UNILEVER N(V(Weena 455, PO Box 7603000 DK RotterdamThe NetherlandsT +31 (0)10 217 4000F +31 (0)10 217 4798

$ommerc!al Reg!ster RotterdamNumber% 24051830

UNILEVER PL"Un!lever House100 V!ctor!a EmbankmentLondon E$4Y 0DYUn!ted K!ngdomT +44 (0)20 7822 5252F +44 (0)20 7822 5951

UNILEVER PL" RE!ISTERED OFFI"EUn!lever PL$Port Sunl!ghtW!rralMerseys!de $H62 4ZDUn!ted K!ngdom

Reg!stered !n England and Wales$ompany Number% 41424

For further !nformat!on on our soc!al, econom!c and env!ronmental performance, please v!s!t our webs!te

http://www.unilever.com/SUSTAINABLE-LIVING

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