Strategy and goals

Our net zero target is a long-term value chain target and applies to our Scope 1, 2 and 3 emissions (‘our GHG emissions’). In line with the SBTi’s approach, the GHG emissions included in the scope of our net zero target exclude the indirect consumer use emissions associated with our products. We intend to submit our net zero target to SBTi for validation ahead of the publication of our updated Climate Transition Action Plan in 2024.

In 2022, our GHG emissions in the scope of our net zero target increased by 2%, versus 2021. The progress we have made in reducing GHG emissions from our operations, packaging, logistics, and our retail emissions, was offset by an increase in emissions from raw materials and ingredients and an increase in direct consumer use emissions.

The complex nature of our business, operating across many categories, product formats and geographies, means that our pathway to net zero will consist of a significant number of initiatives which tackle our biggest emissions sources. The work we have undertaken in 2022 has helped us to clarify and prioritise these initiatives within each of our five Business Groups and across our value chain. Going forward, our focus will be on scaling these initiatives over the short to medium term to deliver annual absolute GHG emission reductions.

Raw materials and ingredients represent the largest proportion of our GHG emissions at 59%. As these emissions are outside our direct control, we are collaborating closely with our suppliers. In 2021, we launched the Unilever Supplier Climate Programme which aims to accelerate the decarbonisation of our shared supply chains across raw materials and ingredients and packaging materials.

We are targeting 300 priority suppliers for this programme and during 2022, we ran a pilot with 35 raw material suppliers of varying sizes and climate maturities, covering a range of industries and geographies. Suppliers participating in the pilot were able to build their climate knowledge and develop expert capabilities to calculate and share their GHG emissions data. The feedback from this pilot is informing the roll-out and scale-up of this important programme in 2023.

Read more about partnering with suppliers to deliver net zero

Our target to halve the greenhouse gas (GHG) impact of our products across their full lifecycle is an intensity target (GHG emissions per consumer use), not an absolute reduction target. It includes emissions which are out of scope of our net zero target – notably indirect GHG emissions from the use of our products by consumers, such as energy used by washing machines and hot water for showers. It guides our brands’ innovation and helps us to monitor performance of the Scope 3 emissions we cannot control as consumers make their own choices on how long they shower, which energy provider they use, and how efficient their home appliances are. We are therefore reliant on the decarbonisation of the energy grid to reduce these emissions.

We have reduced the GHG impact of our products across the lifecycle per consumer use by 19%, versus 2010^(c). Our progress was driven by our Nutrition and Home Care Business Groups, where emissions have reduced per consumer use by 48% and 44% respectively – mainly due to grid decarbonisation, portfolio changes and product innovation, such as the removal of phosphates from our laundry products. In Ice Cream, our emissions have reduced by 9% in the same period due to our ice cream cabinet efficiency improvement programme. GHG emissions per consumer use from Beauty & Wellbeing and Personal Care have increased by 24% and 3% respectively, driven primarily by the acquisition of brands which have high GHG emissions associated with consumer hot water use.

We are currently completing a review of our 2030 full value chain target and intend to submit an updated target, along with our net zero target, to SBTi for validation ahead of the publication of our updated Climate Transition Action Plan in 2024.

Read more about reducing emissions from the use of our products

Greenhouse gas (GHG) emissions from our operations are relatively small at 2% of the value chain emissions in scope of our net zero target. However, they are where we have the greatest influence and form a key part of our net zero roadmap. In 2022, emissions from our factories, research laboratories and warehouses (Scope 1 and 2) reduced by 68%, versus 2015^(a)(b). This puts us on track to achieve our interim target of a 70% GHG reduction by 2025. Our progress has been driven by converting to renewable electricity and energy and improving energy efficiency.

In 2022, 93% of our electricity was from renewable sources, an increase of 7% since 2021. We report in line with RE100’s best practice guide on renewable electricity reporting, which means that we only report electricity as 'renewable' when the accompanying Renewable Energy Certificates (RECs) originate in the same market in which we are operating. We also include renewable electricity generated at our factories, such as the electricity from our combined heat and power plants (CHPs) and on-site solar installations.

Decarbonisation of the energy we use to generate heat is critical in the next phase of our strategy to achieve our 2030 operational emissions goal, including 100% renewable thermal energy. In 2022, over a third of our thermal energy came from renewable sources. Our factories achieved a full year of production without direct coal use (used primarily to generate thermal energy). One of the ways we accomplished this was by using biomass. In 2022, we responded to the growing external debate on the sustainability of biogenic fuel sources with the publication of Unilever’s position on the sustainable sourcing of biofuels.

Improving energy efficiency is another key part of our decarbonisation roadmap. In 2022, our factories reduced their absolute operational energy consumption by 4%, versus 2021. In 2022, we invested €37 million in capital expenditure projects through our Clean Technology Fund. These projects were mainly focused on renewable energy and resource efficiency, and we estimate that they will reduce GHG emissions by 88,000 tonnes across the lifecycle of the projects.

Read more about decarbonising our business

While our business relies on a large volume of chemicals derived from fossil fuels, we can reduce our emissions by transitioning towards ingredients which use renewable or recycled carbon. Our Home Care Business Group’s Clean Future strategy is at the forefront of this pioneering approach, identifying opportunities to replace fossil-fuel-based ingredients with renewable and recyclable alternatives.

Alternative ingredients are critical to our plans to achieve net zero and will help us future-proof our portfolio by diversifying our supply chains while offering consumers more sustainable, lower emission products. This year we launched a €115 million ($120 million) joint venture with Genomatica, a US-based biotech company, to commercialise and scale low-carbon plant-based feedstock ingredients. We expect these alternative ingredients to deliver GHG emission reductions in the medium to long term.

We are testing out a number of new Home Care products in market which use renewable or recycled carbon ingredients. Sunlight dishwash, for example, was relaunched in Thailand in 2022 and now includes plant-based cleaning agents and a formulation that is 99% biodegradable and 79% renewable. We are also exploring the viability of new ingredients, such as soda ash derived from carbon capture which has the potential to be used as a cleaning ingredient in our laundry powders.

Read more about our Clean Future strategy

We believe that transparency around the carbon impact of our products will give consumers the information they need to make sustainable choices. The challenge we face is that the data is not readily available. That’s why we are working with partners to standardise Scope 3 data collection protocols and communication frameworks so we can share footprint data accurately and efficiently with consumers.

We are part of the World Business Council for Sustainable Development (WBCSD) pathfinder project with other global climate leaders like Microsoft. The project aims to increase the accuracy of carbon data for ingredients and raw materials, so we can build a clear picture of the lifecycle impact of products.

In 2022, we completed a pilot with WBCSD’s Partnership for Carbon Transparency (PACT) initiative which involved the successful real-time exchange of carbon data with several partners. This work demonstrates proof of concept for what we believe will be a significant shift in the way that Scope 3 emissions are standardised, measured and reported in the future.

Read more about reducing emissions from the use of our products

Our Climate & Nature Fund was launched in 2020 and aims to connect value chain transformation with our brands. This will help us to take targeted action to address climate change, protect nature and grow responsibly – ultimately helping us achieve our net zero ambition. By the end of 2022, we had spent and committed over €200 million.

A number of our brands are working on projects. Knorr is launching 50 projects in collaboration with farmers to reduce and remove greenhouse gas emissions and reduce water consumption, while improving biodiversity, soil health and livelihoods. One project is using satellite data and digital sensors to help tomato farmers in the south of Spain optimise their water use as well as improving soil health through cover cropping. Crucially, Knorr will bring consumers along on the journey, by communicating the benefits of this approach.

Dairy products are a priority raw material used by our Ice Cream brands such as Wall’s, Magnum and Ben & Jerry’s. Ben & Jerry’s is working on a pilot project with 15 dairy farms across the US and Europe to develop a potentially game-changing initiative which aims to reduce GHG emissions by up to half of the industry average, by the end of 2024. The pilot will use a mixture of new technology and regenerative agricultural practices to reduce emissions across three focus areas: cow (ruminant) digestion, manure management and soil. We will use lessons from this initiative to develop scalable ways of making dairy farming less carbon-intensive.

We are also working with partners to finance regeneration and restoration programmes beyond our value chain. For example, we are a founding member of the Rimba Collective Fund to support the protection and restoration of at least 500,000 hectares of forests and lands in Asia over the next five years. And, together with private equity fund Tikehau and AXA, we have committed €100 million to a Regenerative Agriculture Fund. All investments made by the fund aim to generate a long-term, positive impact on atmospheric carbon, ecosystem biodiversity and water management, using tools such as land restoration and regenerative agriculture.

Read more about our Climate & Nature Fund