Last week we looked at the first update from the Unilever Sustainable Living Plan progress report (released today) on its achievements in sourcing agricultural raw materials sustainably. Afterwards, we had the chance to talk with Marc Engel, Unilever’s Chief Procurement Officer in order to learn more about the company’s progress and his views on some of the questions brought up in the article. Here’s an edited version of the interview:
TriplePundit: You wrote, “We are very proud of the rate of acceleration in recent years; given that it took us 10 years to get to 14 percent by 2010.” Is it only Unilever that has changed or there are also other factors contributing to your accelerated progress?
Marc Engel: Of course it’s not just us that have changed. First, there is more sustainably grown material around than there was five years ago because there are many companies that are sort of taking an interest in it. So, if you look, for example, at palm oil, five years ago you wouldn’t have enough sustainable palm oil to get to 100 percent of what we use.
The other thing is what we specifically have done with our suppliers – we launched a program called “Partner to Win,” which is a program on how to collaborate and work closer with our strategic suppliers. We do that for innovation and capacity, but also for sustainability, so we actually invested a lot with our key suppliers on how we actually make it happen.
In addition, the consumer goods industry is getting organized. There is the consumer goods forum, which is a forum of consumer goods companies looking together at how to make the business more sustainable. There are initiatives like the World Economic Forum that is very focused on sustainable development and even governments have changed, like in India or China, where we have signed a memorandum of understanding on sustainable tea development in China with the government.
3p: Do you see this acceleration in other companies as well?
ME: You see it in some companies. I think the consumer companies are starting to understand also that this is what the consumer wants – it’s very clear that consumers are increasingly demanding to know where their products are coming from, where they are made, how they are made and whether they are made in a sustainable and responsible way. So in the consumer goods industry you do see a trend of people being more aware about sustainability.
What, of course, is a big blocker is the economic slowdown. People [in the industry] have the perception that sustainability costs money and see it as an investment or even as an ongoing structural cost and those are usually the blockers. So I’ve seen companies with the intent going there – there are some companies like us who are making great progress and some companies who are little bit hesitant because they haven’t made the switch to seeing sustainability as a business opportunity and are still seeing it as a cost. I think that if you want to be successful as a company, you’ve got to mobilize your whole company behind it as being a business opportunity and not just say ‘OK, what’s that going to cost extra on doing this or doing that.’
3p: Considering the bar Paul Polman set by saying, “If we achieve our sustainability targets and no one else follows, we will have failed,” how would you rate your progress so far in terms of success/failure on a scale of 0-10? How many companies are following your efforts to source agricultural raw materials sustainably?
ME: It’s difficult for us to judge other companies’ behavior because it’s a little bit arrogant to think that we can do that, so we try not to do that. But what we try to look at is if you take, for instance, palm oil, there is 40 million tons of palm oil produced in the world [annually] and palm oil development contributes to about 20 percent of the deforestation in the world, which is a big issue. If you look at this year, about 6 million tons of palm oil are Roundtable on Sustainable Palm Oil (RSPO) certified and therefore coming from plantations with sustainable certification. This is 15 percent after 10 years of RSPO.
That is great progress and I think the RSPO did a fantastic job in getting us there, but it still means that 85 percent of the world’s palm oil is not coming from sustainable sources and that 85 percent of the 20 percent of deforestation is still going on. If it takes until 2025, that sustainable palm oil will go from 6 million to 20 million to 30 million – by that time all the forests would have gone.
So whilst we can be very proud at Unilever that we have covered 100 percent of our demand and we’re now making concrete plans for getting certified palm oil which is traceable back to the plantation it was grown on, if in 2030, 85 percent of the palm oil comes from unsustainable sources and it then hence linked with deforestation – if you would give a report card to that, it wouldn’t be a very good score, right?
3p: Do you have metrics showing the benefits of sourcing raw agricultural materials sustainably in terms of risk reduction or opportunity creation?
ME: Metrics in sustainability are very difficult. At the end of the day, our sustainable agriculture code has 11 sections – some of them are social, some of them economic and some of them environmental, and they’re all metrics in terms of what needs to be happening for you to qualify against that code to be sustainable. Sustainability is also very much a journey of improvement because what is sustainable today, may not be considered sustainable tomorrow – the standards are moving up all the time.. You’re making these investments into sustainability with the ambition that in 2020, this all becomes the norm. Our company vision is to double the size of our business, whilst reducing our environmental footprint and increasing our positive social impact.
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons the New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.