By Richa Naidu and Chandini Monnappa
LONDON (Reuters) – Unilever (LON:ULVR) has agreed sustainability deals with its top 10 retail customers, including Walmart (NYSE:WMT), aimed at cutting greenhouse gas emissions and minimising waste in its supply chain, the consumer giant’s CEO said on Monday.
Unilever, which makes Dove soap, Knorr stock cubes and Ben & Jerry’s ice cream, was in the wake of the 2015 Paris agreement on climate change the consumer industry’s poster child for setting tough sustainability targets.
About two years ago, however, the company came under pressure from some investors concerned that Unilever’s climate strategy was distracting it from growing profits.
CEO Hein Schumacher in April changed some of the company’s years-old sustainability goals, leading to both praise from some investors and criticism from climate activists.
“What’s new and what’s coming, and what I expect a lot from in the years to come, is (our) collaboration on sustainability agreements with (retail) customers,” Schumacher said in an interview at the Reuters IMPACT conference in London on Monday.
“We have a sustainability collaboration agreement… with Walmart, for example…(The agreement) is about greenhouse gas emission reduction, and we are their scope three.”
Scope 3 emissions are those a company is indirectly responsible for across its supply and distribution chain, according to a classification development by non-profit thinktank the World Resources Institute. A company’s in-house operations and energy use make up what is called Scope 1 and 2 emissions.
Walmart has said previously it was working with suppliers to avoid a ‘gigaton’ of greenhouse gas emissions from the global value chain by 2030. Since it launched the initiative in 2017, suppliers have reported that a total of 574 million metric tons of emissions had been reduced or avoided, according to the retailer’s website.
Schumacher said Unilever also has a deal with health and beauty retailer A.S. Watson’s to create sustainable products like body wash and toothpaste.
He added that Unilever was using climate-modelling to cut supply chain emissions and make operations more resilient to adverse events like drought.
“(Because of drought) we’ve completely changed our mustard seed supply chain. We’re changing our tomato supply chain, and they do become a bit more resilient,” he said.
