Doing well by doing good

Transcription

1 Doing well by doing good Unilever s Integrated Approach to Responsible Business Practice and Sustainability London & Paris June 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 global company with operations in over 100 countries 1 1

2 We market a broad range of brands covering food, home & personal care products 2 Many of these have strong market positions. 13 have annual revenues of over $1 billion Foods Home & Personal Care Savoury Mass Skin Spreads World Number 1 Dressings World Number 2 Tea Local strength Deodorants Daily Hair Care Oral Care Laundry Household Cleaning Ice Cream The Billion Dollar Brands 3 3 2

3 Our brands are sold in nearly every country and are present in half the households on the planet 4 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 5 3

4 .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% 6 We have distribution in depth from the favelas of Sao Paolo to the villages of India 7 4

5 We sell to both the well-off and to the very poor.. 8 with trusted brands 9 5

6 that suit different pockets and lifestyles D&E population 2007 (billions) Have lots 0.5 Haves 2.6 Have nots through a differentiated brand portfolio Hair, Indonesia 11 6

7 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 12 Corporate responsibility has been central to our way of doing business. William Lever one of the great social entrepreneurs of late Victorian England Samuel van den Bergh and Anton Jurgens shared Lever s views on the role of business since we started making soap and margarine a century ago 13 7

8 Lever s success in making low-cost soap widely available to the urban poor made a big contribution to Public Health in Victorian Britain 14 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. 15 8

9 Today our approach to sustainability is to embed it into our brands Brand Imprint Synthesis of the Brand Imprint MODEL 16 The Brand Imprint tool forces brands to take a broad view of their impacts on the world 17 9

10 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 18 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 19 10

11 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% 20 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 21 11

12 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 22 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 23 12

13 Already 1/3 of Unilever products qualify for the Choices logo Belgium France Czech Greece Poland Thailand Chile South Africa Netherlands USA Switzerland 24 Our Foods innovation programme is targeting five key benefit areas Heart Health Beauty Weight Management Brain Immunity and Strength 25 13

14 and five natural ingredients Fruit and vegetables Tea Milk Oils Soy 26 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 27 cholesterol 14

15 Example: Blue Band The Goodness of Margarine Goodness of Margarine Communication on healthy oils and fats in Europe and Africa 28 Example: Hellmann s - The Real Goodness of Mayonnaise 29 15

16 Example: Knorr Chilled soups packed with vegetables Healthy, premium ingredients Delicious recipes New packaging for a fresher taste 30 Example: Lipton and the Health benefits of tea 31 16

17 Even ice cream can deliver positive nutrition Delicious ice cream for kids with as much calcium as two glasses of milk + = 32 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 33 17

18 Hygiene is the second pillar of our CR strategy Hand Washing Oral Hygiene Water Purification 34 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 Pakistan and Bangladesh They are reaching over 100 million people and growing the market for soap 35 18

19 Our oral care programmes also reach millions Dental disease is painful 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 36 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 half a cent per litre costs less than boiled water Test Marketed in Chennai Now being rolled out across India Already protecting 5 million Indians 37 19

20 Distribution systems like Shakti in India act as platforms for consumer education 45,000 Shakti entrepreneurs covering over 100,000 villages Servicing 125 million rural consumers 38 Sustainable Development is our third pillar: it has four thrusts Climate change Agriculture Water Packaging 39 20

21 Climate Change 40 We have measured our greenhouse gas footprint 40m tonnes 4m tonnes 4m tonnes m tonnes 41 21

22 CO 2 reductions in our own factories have declined by c.35% 2012 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 with a lower global warming potential By the end of 2007 we had replaced 200k freezers Formed Refrigerants Naturally a partnership with McDonalds, Coca-Cola, Carlsberg, Ikea, Pepsico and Greenpeace 43 22

23 Product design offers the greatest potential for CO 2 reduction Concentration Less Packaging Laundry powders which wash at low temperatures 44 Agriculture is our second sustainability thrust 45 23

24 2/3rds of our raw materials come from agriculture 46 We have 11 sustainability indicators Soil fertility and health Soil loss Value chain Energy Nutrients Water Social capital Pest management Local economy Biodiversity Animal welfare 47 24

25 We have built an impressive body of knowledge and expertise 48 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 49 25

26 We are soon to reap the business benefits By 2015 all of our tea will be sustainably sourced Certified by the Rainforest Alliance We will sell more tea and will improve the livelihoods of >2 million people 50 We are now addressing Palm Oil Global demand for palm oil is soaring The burning of S.E. Asia s peat forests releases 2 billion tonnes of GHGs p.a. Indonesia accounts for 90% of these emissions making it the 3 rd highest emitter behind USA and China Some (but not all) of this deforestation is due to the palm oil industry It is unnecessary. There is ample unforested land to meet demand 51 26

27 Unilever s commitments on Palm Oil Unilever has committed itself to: Draw all of its palm oil from certified sustainable sources by 2015 Have segregated supplies of straight palm oil available in Europe by 2012 Support an immediate moratorium on any further deforestation in Indonesia How will we do this? Build a big global coalition of users, processors, retailers, banks and NGOs Exert leverage over the growers Establish systems for traceability 52 Water is our third sustainability thrust 53 27

28 Our water footprint is large in raw materials in manufacturing in consumer use 50% 5% 45% We are minimising our impact across our value chain 54 We have had most success in our own factories water use has declined by 62%

29 Consumer use of water is greatest in the laundry category 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 Semi-Automatic ~120 litres / wash ~ 30% of water ~ 70% of water is used washing is used rinsing 56 Technology can help reduce water consumption Surf Excel Quick Wash, launched in India in 2004 Low Lather formulation saves two buckets of water per wash We estimate potential savings of 14 BILLION litres of water a year 57 29

30 We launched 'easy-rinse' fabric softeners in seven countries in Central & Latin America 58 Packaging is our fourth sustainability thrust Our packaging footprint is large Unilever uses >2 million tonnes of packaging annually, much of it branded 59 30

31 Packaging has a crucial role in the FMCG Industry. Protection Preservation Aesthetics Functionality 60 But packaging s visible waste makes it a target for consumers, NGOs and legislators 61 31

32 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 p.a. cost saving! 40% Cycle time reduction 62 Recent successes Liquids Concentration Volume 1X 100oz 2X 50oz Will save approximately 7,000 Tons of resin from entering landfills vs. our previous offering Cap Wt 24g 14g Spout Wt Bottle Wt Pack total 13.9g 119g Labeled 156.9g 8.8g 70g Labeled 92.8g 41% Reduction Plastic/Load 4.9g/ld 2.9g/ld 63 32

33 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. Make sachets someone s raw material 800,000 tonnes p.a. Goal = 100% sustainable 64 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 65 33

34 Dove Evolution 66 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 67 34

35 Business case: Fuel innovation 68 Business case: Win with customers 69 35

36 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 70 Business case: Address consumers needs as citizens 71 36

37 Business case: Differentiate & build Unilever brand 72 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 74 37

38 We think we are pretty good at this This is what others think. 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 75 38