Unilever

3.Strategy:

Our business model

Unilever believes profitable growth should also be responsible growth. That approach lies at the
heart of our business model, driven by sustainable living and the USLP. It guides our approach to
how we do business and how we meet the growing consumer demand for brands that act
responsibly in a world of finite resources.

Our business model begins with consumer insight that informs brand innovation, often with partners
in our supply chain, to create products we take to market supported by marketing and advertising
across a range of distribution channels.

 Manufacturing: Unilever has the world’s No.1 supply chain according to Gartner. 306
factories and have invested heavily in efficiency and eco-production.

 Logistics: We are centralising our operations with a network of global UltraLogistik

control towers to improve customer service, cut costs and reduce CO 2emissions. We
increasingly use hybrid vehicles and rail rather than road.

 Marketing: We use multiple platforms to achieve cut-through in a highly fragmented

media. Effective digital marketing is essential and influences shopping at all stages of
the decision-making process and through all channels.

 Sales: We work closely with retailers to win in the market place, making sure our
brands are always available and properly displayed, in all channels from supermarkets
to e-commerce.

 Consumer insight: Societies are dynamic. We not only need insight into trends, but
also the ability to predict them in order to maintain our competitive advantage.

 Collaboration: We work with governments, NGOs and other stakeholders to drive

change that’s good for society and good for business, and we work with partners in
our supply chain, to create innovations in products and packaging.

 Innovation: Our R&D mission is to build brands through benefit-led innovation

unlocked by science and technology.

 Sourcing: We have a €34 billion annual procurement programme including

agricultural raw materials, 51% of which are sustainably sourced.

 Manufacturing: Unilever has the world’s No.1 supply chain according to Gartner. 306
factories and have invested heavily in efficiency and eco-production.

Driven by our purpose & vision

We have a clear purpose – to make sustainable living commonplace – and a vision to grow our
business while decoupling our environmental footprint from our growth and increasing our positive
social impact.

What do we mean by sustainable living?

We want to help create a world where everyone can live well within the natural limits of the planet.
We’re putting sustainable living at the heart of everything we do including through our brands and
products, our standards of behaviour within and beyond Unilever, and our partnerships which are
driving transformational change across our value chain.
However volatile and uncertain the world becomes, Unilever’s purpose and vision will remain
because we believe that managing for the long term is the best way for us to grow.

Our blueprint for sustainable growth

The Unilever Sustainable Living Plan (USLP) provides the detailed blueprint for how we will achieve
sustainable growth, while delivering our purpose and vision. It covers all aspects of our business,
incorporates all our brands and Divisions, and covers every country we work in. It aims to create
change across our value chain – from our operations, to our sourcing and the way consumers use
our products. And it is designed to drive profitable growth and fuel innovation, in the right way, so
that all our stakeholders benefit.

The Plan, launched in 2010, is built around three big goals and nine pillars. Our strategic priorities
were identified through a materiality analysis. To check these are still the right priorities, we conduct
a materiality analysis every two years. For each goal, we have detailed targets and metrics. Find out
more about our performance on the relevant pillars pages.
 Improving health and Reducing environmental impact Enhancing livelihoods
well-being

Goal: By 2020 we will help Goal: By 2030 our goal is to halve Goal: By 2020 we will
more than a billion people the environmental footprint of the enhance the livelihoods of
take action to improve making and use of our products as millions of people as we
their health and well- we grow our business. grow our business.
being. Pillars: Pillars:
Pillars: Greenhouse gases Fairness in the workplace
Health & hygiene Water use Opportunities for women
Improving nutrition Waste & packaging Inclusive business
Sustainable sourcing
We have long known that growth and sustainability are not in conflict – and we now have evidence
to prove this. Our four-point framework shows how the USLP drives value for our business .

Transformational change beyond our business

We are aware that the biggest challenges facing the world cannot be addressed by one company
alone. We are changing ourselves as a business, but we also want to help transform the system in
which business is done. We’ll do this by acting as catalysts for change more broadly – as conveners
to facilitate progressive discussion and bring others together, and as collaborators in partnerships to
deliver positive business, social and environmental impact at scale.

By being part of the solution to challenges, businesses have the opportunity to win the trust of
consumers while helping create societies and economies in which they can grow and succeed.

We aim to use our scale and influence to help bring about transformational change in four areas
where we can make the biggest difference and which represent the biggest market opportunities for
us:
 Climate change and forests
 Improving livelihoods and creating more opportunities for women
 Improving health and well-being
 Championing sustainable agriculture, focused on land use and food security
Our multi-stakeholder approach enables us to understand the challenges preventing society and our
ecosystems from thriving, and helps us find ways to begin addressing them. We engage
shareholders, governments, NGOs and civil society organisations, and shape the business landscape
through advocacy. By leveraging partnerships, blended (public/private) finance, digital and new
business models, we believe transformational change is possible.

Our plan & the sustainable development goal

One way in which we are using partnerships to deliver change at scale is through the Sustainable
Development Goals (SDGs). They are fundamental to future economic and business growth. The
Business & Sustainable Development Commission, co-founded by Unilever, concluded that
successful delivery of the SDGs will create market opportunities of at least $12 trillion a year.

We are working across many of the SDGs through the USLP. In doing so, we are unlocking new
markets and investing in brands with purpose and innovation. The interdependence and mutuality of
the goals ensures that progress against one, leads to progress against others. Find out about
our approach to SDGsand how we are taking action on the them, throughout our Sustainable Living
Report.

We’re still learning

We’ve had some great results from our Sustainable Living Plan. We know it contributes to business
growth as we see consumers choosing our brands with purpose – such as Hellmann’s, Ben & Jerry’s,
Dove and Omo.

We’ve also learnt a lot about what does and doesn’t work, and we’ll keep making changes to get
things right. One of our biggest challenges is our ability to influence change outside our business,
where we don’t have direct control.

For example, we’ve made good progress on reducing greenhouse gas emissions (GHG) from our
factories and reached our 2020 target by 2017. However, the GHG impact of our products per
consumer use has increased by 9% since 2010. We’ve updated our GHG strategy to reflect what
we’ve learnt. Similarly, although we have reduced water use by 2% through innovations such as low
rinse laundry products, this has been offset by the growth of products in our portfolio with higher
water use.

We are continually looking for new ideas and ways to influence our wider value chain. We know that
collaboration with others holds the key to tackling many sustainability challenges and we will be
focusing even more on this in the years ahead. Our transformational change initiatives will help to
bring about the systems change needed to address some of the most complex social and
environmental problems.

Purpose-driven people
To achieve real change, we need to create a movement for sustainable growth within Unilever. We
are always finding new ways to engage our people on sustainability and to harness their passion to
achieve our goals. One particular area of focus is helping our employees find their own our purpose
so that they can fulfil their potential.

‘Bringing Sustainability to Life’ is one of the six key business skills addressed in our learning
programmes with our employees. We integrate sustainability into existing training and create
bespoke courses to develop employees’ capabilities and understanding of how sustainability applies
to their role.

Our employee sustainability champions in key functions, Divisions and countries, help engage
employees on sustainability, support our leadership teams to identify local priorities and review
progress quarterly against our targets. During 2017, we ran a ‘Have Your Say’ survey – the biggest
consultation of employees on the future of the business that Unilever has ever conducted.

Purpose-driven leadership
“Leadership will be critical in the delivery of Unilever’s purpose and in our performance over the
coming years. Our leadership programmes will nurture the purpose-driven and values-led leaders
that Unilever, and our world, need today.”

-Tim Munden, Chief Learning Officer

As a values-led and purpose-driven organisation, we have been using our Unilever Leadership
Development Programme (ULDP) as the vehicle to help our executives to discover their purpose, and
to use this to guide them in their decisions and careers.

Our recently refreshed General Manager (GM) programme helps equip our GMs with the mindset to
develop innovative, sustainable and inclusive business models to achieve responsible growth. GMs
play a key role in creating the right conditions for delivering the USLP as they have oversight of our
markets and commercial operations.

In addition, we now link progress on sustainability to remuneration for a growing number of

management employees, up to and including our CEO and Unilever Leadership Executive.

References:

https://www.unilever.com/sustainable-living/our-strategy/about-our-strategy/

https://www.unilever.com/about/who-we-are/our-strategy/