Doing well by doing good

Transcription

1 Doing well by doing good Unilever s Integrated Approach to Responsible Business Practice and Sustainability Presentation at the Société Générale SRI Conference London: Wednesday 2 April 2008 Gavin Neath CBE: Senior Vice President Communications This presentation may contain forward-looking statements, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of Words such as 'expects', 'anticipates', 'intends' or the negative of these terms and other similar expressions of future performance or results, including financial objectives to 2010, and their negatives are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including, among others, competitive pricing and activities, consumption levels, costs, the ability to maintain and manage key customer relationships and supply chain sources, currency values, interest rates, the ability to integrate acquisitions and complete planned divestitures, physical risks, environmental risks, the ability to manage regulatory, tax and legal matters and resolve pending matters within current estimates, legislative, fiscal and regulatory developments, political, economic and social conditions in the geographic markets where the Group operates and new or changed priorities of the Boards. Further details of potential risks and uncertainties affecting the Group are described in the Group's filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including the Annual Report & Accounts on Form 20-F. These forward-looking statements speak only as of the date of this presentation Unilever is a truly global company with operations in over 100 countries We market a broad range of brands covering food, household & personal care products 1

2 Many of these have strong market positions. 13 have annual revenues of over $1 billion Foods Savoury Spreads Dressings Tea Ice Cream World Number 1 World Number 2 Local strength Home & Personal Care Mass Skin Deodorants Daily Hair Care Oral Care Laundry Household Cleaning 13 Brands have revenues >$1 billion Our brands are sold in nearly every country and are present in half the households on the planet We have deep roots in the developing world 1918 Cote d Ivoire India Nigeria 1918 Ghana 1929 Kenya 1910 Congo 1930 Brazil 1911 China 1933 Indonesia 1903 South Africa 2

3 .which today accounts for 44% of our sales Other developed 26% D&E 36% Other Developed 23% D&E 44% Western Europe 38% Western Europe 33% We have distribution in depth from the favelas of Sao Paolo to the villages of India We sell to both the well-off and to the very poor.. 3

4 with trusted brands that suit different pockets and lifestyles D&E population 2007 (billions) Have lots 0.5 Haves 2.6 Have nots 2.6 through a differentiated brand portfolio Laundry, India Hair, Indonesia 4

5 So What? Our size Our geographical breadth Our distribution reach The number of consumer contacts we make daily Give us a great capacity to do good (and to do harm) Synthesis of the Brand Imprint MODEL CR has been central to our way of doing business. Founded in 1884 by William Lever one of the great social entrepreneurs of late Victorian England since we started out making soap in 1884 Lever s success in making low-cost soap widely available to the urban poor made a big contribution to Public Health in Victorian Britain 5

6 Health has always been part of Unilever s corporate purpose Our Mission in 1890 Our Mission in 2008 To make cleanliness commonplace, to lessen the work for women; to foster health and contribute to personal attractiveness that life may be more enjoyable and rewarding for the people who use our products. Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. Today our approach to CR and sustainability is to embed it in the activities of our brands Brand Imprint Synthesis of the Brand Imprint MODEL The Brand Imprint tool forces brands to take a broad view of their impacts on the world 6

7 The result is an approach to CR built on 4 pillars that reflect our brands and our heritage Nutrition and Health Hygiene Sustainable Development Brands with Social Missions Nutrition and Health covers four main areas Our Nutrition Enhancement Programme The Choices stamp Innovating to create new, healthier foods The problems of under nutrition Our Nutrition Enhancement Programme is improving the nutritional profile of our existing product range Saturated fatsbeing reduced by up to 40% in Heart brand ice creams in Europe Sodium in (US) Ragu Old World Style Sauce reduced by 25% Many US vegetable oil spreads reformulated to 0 g trans fat per serving Since 2005 reformulation changes have eliminated at least: 15,000 tons of trans-fats 10,000 tons of saturated fats 2,000 tons of sodium and 10,000 tons of sugars from our portfolio 20-25% reduction in sugar levels in US RTD teas completed. Soups sodium levels reduced by 10% (Europe) Family Goodness spreads now virtually free of trans fats Ketchup sugar levels reduced by 10% 7

8 Not only have we eliminated baddies Promise spreads US Lipton Ice Tea US Knorr soups Europe Virtually trans fat-free Up to 25% less sugar Up to 30% less salt we have upgraded the profile of core ranges Ragu sauces Knorr bouillon Now with a full serving of vegetables in every half cup Improved natural ingredients: More vegetables and herbs Extra virgin olive oil Organic variants Products that meet the NEP standards qualify for the Choices stamp and can make a health claim Product optimisation Trans fat Saturated fat Sodium Sugars Front-of-pack labelling Healthy products recognised at a glance 8

9 Already 1/3 of Unilever products qualify for the Choices stamp Belgium France Czech Greece Poland Thailand Chile South Africa Netherlands USA Switzerland Our Foods innovation programme is targeting five key benefit areas Heart Health Beauty Weight Management Brain Immunity and Strength and five natural ingredients Tea Fruit and vegetables Milk Oils Soy 9

10 where we have long-standing expertise Our brands heritage in tea dates back over a century Soy-based AdeS drinks were first launched in Argentina 20 years ago We have been researching the dietary impact of vegetable oils since the 1960s Example: Flora/Becel and Heart Health Omega 3 plus Packed with more omega 3 than any other spread or minidrink pro.activ Spreads, milk, yoghurt and minidrinks clinically proven to lower cholesterol Example: Blue Band The Goodness of Margarine Goodness of Margarine Communication on healthy oils and fats in Europe and Africa 10

11 Example: Hellmann s - The Real Goodness of Mayonnaise Example: Knorr Chilled soups packed with vegetables Healthy, premium ingredients Delicious recipes New packaging for a fresher taste Example: Knorr Eat Colour 11

12 Example: Lipton and the Health benefits of tea Even ice cream can deliver positive nutrition Delicious ice cream for kids with as much calcium as two glasses of milk + + We are also committed to a fortified foods programme Partnership for Child Nutrition Combating Iodine Deficiency Working with Partners Reducing child malnutrition in India Iodised salt in India, Malawi, Ghana and Nigeria GAIN: The Global Alliance for Improved Nutrition 12

13 Hygiene is the second pillar of our CR strategy Hand Washing Oral Hygiene Water Purification Laundry and Household Care Our hand washing education programmes are extensive The second biggest killer of children in the world is diarrhoea. Hand washing can cut diarrhoeal diseases by 48% Lifebuoy s hand washing programme in India is well established The programme has been launched in sub-saharan Africa in 2007 They are reaching over 100 million people and growing the market for soap Our oral care programmes also reach millions Dental disease is the No.1 disease affecting children and a key cause of children missing school, especially those on low incomes Our partnership with FDI World Dental Federation involves over a million dentists in a global campaign Live, Learn, Laugh In Nigeria our Schools Campaign will educate 2 million people about oral health over 5 years 13

14 4 billion people do not have access to clean drinking water Pureit can provide this Reliably tested by the London School of Hygiene & Tropical Medicine and the Indian National Institute of Epidemiology Cheaply pence per litre costs less than boiled water Test Marketed in Chennai Now being rolled out across India Already protecting 5 million Indians In our Home Care Business our Vitality Goal is To offer products which deliver MORE social value with LESS environmental impact Sustainable Development is our third pillar: it has four thrusts Climate change Agriculture Water Packaging 14

15 Climate Change We have measured our greenhouse gas footprint Supply Chain 45m tonnes Manufacture 5m tonnes Distribution 4m tonnes Travel/Other 0.5m tonnes Consumer Use m tonnes In the upstream Supply Chain our efforts are currently limited Foods The Sustainable Agriculture Programme has the reduction of carbon intensive fertilisers and pesticides as a key indicator HPC Our Supplier code is not yet demanding specific CO 2 standards from vendors We are currently conducting an experiment with the CDP This will change in the next 2-3 years 15

16 CO 2 reductions in our own factories have declined by c.35% Target: Further reduction of 25% vs In refrigeration we have made good progress Our ice cream is stored in c.2 million freezers We have developed refrigerants with natural HC s which have a lower global warming potential By the end of 2007 we had replaced 200k freezers Formed Refrigerants Naturally - a partnership with McDonalds, Coca Cola and Greenpeace Product design offers the greatest potential for CO 2 reduction Concentration Less Packaging Laundry powders which wash at low temps 16

17 Agriculture is our second big sustainability thrust 2/3 of our raw materials come from agriculture We have 11 sustainability indicators for each of 10 key crops Soil fertility and health Soil loss Value chain Energy Nutrients Water Social capital Pest management Local economy Biodiversity Animal welfare We have built an impressive body of knowledge and expertise 17

18 We have done this in partnership with others SAAB - Sustainable Agriculture Advisory Board Unilever SAI Platform RSPO - Roundtable on Sustainable Palm Oil RTRS - Roundtable on Responsible Soy SFL - Sustainable Food Laboratory We are soon to reap the business benefits of this work By 2015 all of our tea will be sustainably sourced Certified by the Rainforest Alliance We will sell more tea and we will improve the livelihoods of >2 million people Water is our third sustainability thrust 18

19 Our water footprint is large in raw materials in manufacturing in consumer use 50% 5% 45% We have tried to minimise our impact across our value chain We have had most success in our own factories water use has declined by 59% Consumer use of water is greatest in Fabric Cleaning Laundry products function under a very wide range of conditions but always rely upon large amounts of WATER Water Use Handwash litres / wash Fully Automatic litres / wash ~ 30% of water ~ 70% of water is used washing is used rinsing Semi-Automatic ~120 litres / wash 19

20 Our laundry business is responsible for a huge volume of water consumption Statistics on Water usage in Laundry Product volume = 6 Million tonnes Consumer water use =7.9 Billion m 3 (2.6% Domestic) In 23 countries Unilever s Laundry water is > 5% domestic water use Water consumption Ingredient & Packaging Supply Chains: 4 % of water volume imprint Unilever Factory Operations: 1 % of water volume imprint Consumer use & disposal: 95% of water volume imprint The D&E regions where our growth prospects are greatest are already water stressed CRITICAL TO CURRENT BUSINESS STRATEGY Growth by D&E Double China Share Technology can change this Surf Excel Quick Wash, launched in India in 2004 Low Lather formulation saves two buckets of water per wash Over 14 BILLION litres of water has been saved so far by Surf Excel Quick Wash 20

21 We launched 'easy-rinse' fabric softeners in seven countries in Central & Latin America Packaging is our fourth sustainability thrust Our packaging footprint is large Unilever uses >2 Million tonnes of packaging annually, much of it branded Packaging has a crucial role in the FMCG Industry. Protection Preservation Aesthetics Promotion Functionality 21

22 But its visible volume and waste makes it a target for the trade, the public, NGOs and legislators Our approach Increasing challenge Light weighting Concentration Refillables & On-the-go Consumer habit change Hitting the market Exploring Options Recent successes - Deodorants 10 X stronger 1960 Tons of less plastic per year globally Reduction of ~6M of KWH globally Top load 15% plastic reduction..and 15m pa cost saving! 40% Cycle time reduction 22

23 Recent Successes Lipton Cartons made with 100% recyclable board, 35% post consumer waste Reduced width less material Old New Weight decreased by 16 % Eliminated 6,437 pallets annually Eliminated 132 additional trucks annually Recent Successes Liquids Concentration 1X 2X Will save approximately 7,000 Tons of resin from entering landfills vs. our previous offering Volume 100oz 50oz Cap Wt 24g 14g Spout Wt 13.9g 8.8g Bottle Wt Pack total 119g Labeled 156.9g 70g Labeled 92.8g 41% Reduction Plastic/Load 4.9g/ld 2.9g/ld Our packaging priorities Eliminate PVC Solve Sachet Litter Sustainable Paper PVC used on 2bn packs NGOs consider it to be a source of dioxins Customers getting out 15 billion sold p.a. No commercial value to scavengers 800,000t p.a. Goal = 100% sustainable 23

24 The fourth pillar of our CR strategy is brands with social missions Ben & Jerry s: Climate Change Hygiene: Hand Wash Education Flora: Heart Health Dove: Campaign for Real Beauty What is the business case for sustainability? It will: 1. Fuel innovation 2. Help us win with customers 3. Help us win in D&E markets 4. Address consumers needs as citizens 5. Differentiate and build the Unilever brand Business case: Fuel innovation 24

25 Business case: Win with customers Business case: Win in D&E markets D&E markets will suffer the worst effects of climate change: Acute shortages of water Desertification of agricultural land The winning companies will anticipate these trends with products that address changing consumer priorities Business case: Address consumers needs as citizens 25

26 Business case: Differentiate & build Unilever brand Some thoughts to finish Unilever s social and environmental impacts come from its brands To make a real difference on the world around us we have to embed responsible business practice and the principles of sustainability into the marketing and R&D plans of our brands Social and environmental benefits can not be delivered at the expense of economic ones otherwise they will not be sustainable inside the company It has to be a win-win doing well by doing good Unilever is pretty good at this: No. 1 Food Company in the DJSI for 9 consecutive years Recognised by the CDP as the best company in the Food Products sector for climate change management strategies 2007: Wal-Mart Supplier of the year for Sustainable Engagement 26