Being a chief procurement officer is quite a demanding job at any enterprise, but it sounds like the scale of what you’re dealing with at Unilever must be enormous?
Dave:
It’s a company I’ve been in for quite a long time now. It doesn’t feel like a large company, though I know that it is and I know that the impact is. But I’ve been fortunate enough to work in most of the geographies, Latin America. I spent quite a bit of time in China, and now based in Singapore.
Sustainability is a word that’s been cropping up more and more in recent years in boardroom discussions, in CPO level and above and below and each side. Is this something that’s dominating Unilever’s thoughts at the moment?
Dave:
It’s actually been at the center of our strategy since the inception of Unilever. Since when Lord Lever started creating Sunlight soap, doing good for the communities around our facilities has been at the center of that and that continues now. 10 years ago we launched The Unilever Stable Living Program, which at the time was groundbreaking, and for those inside the business, extremely stretching. Only recently we have announced a new set of what we believe are really bold commitments to fight climate change and protect and regenerate nature.
You mentioned the announcement, talk to me a little about the actual action points of what Unilever is going to be addressing with regards to this sustainable program.
Dave:
We’ve announced three goals. The first is to achieve net zero emissions from all of our products by 2039. We also, as part of that, have an ambition to make sure that we communicate the carbon footprint of every product that we sell. So that as a consumer, you can pick up a product and know your exact carbon commitment by using and buying our products. Second goal is to have a deforestation free supply chain by 2023. This is going well above what we previously committed, and we’ll be using substantial new technology approaches to tracking and tracing and monitoring our supply chain to ensure deforestation. And third is to step up our direct efforts in terms of water preservation, which is really about implementing a water stewardship program in 100 locations by 2030. This is an extension of work that we were doing in India.
Being a chief procurement officer, you are in an interesting position, aren’t you? Because you are fundamental to what Unilever is procuring and then where it’s procuring from, in terms of transparency in the supply chain.
Dave:
Yeah. I’m partially humbled sometimes to know the scale, and because of that, the impact we can make. We have an agricultural footprint of more than three million hectares. Our carbon footprint from the supply base is about a quarter of our total carbon footprint. And we have a social footprint of well more than a million people around the world. The scale is large, but it also gives an opportunity for making a very large impact.
There must be, as you mentioned, an advantage to size in terms of how much change you can make. What are the challenges that an enterprise of Unilever’s size faces when facing something like sustainability?
Dave:
I think the fortunate position that we have a business that is centered and with a strategy around a sustainable business. So from the board right through the company, we have a common purpose about making sustainable living commonplace, which makes the job of sustainability and procurement around sustainability that a bit easier. Because there’s a great interconnection through the company. And again, I mentioned earlier, the sustainable living plan that we launched 10 years ago, just concluding that particular program this year actually. And when it was launched, I remember 10 years ago being in the company and we were shocked at how stretching the targets were.
Dave:
In some cases, I had no idea how we were going to achieve them. But collectively across the business, across supply chain, R&D, marketing, commercial, because of the great alignment and single vision that was put out at that point, it was actually made easier by that internal integration. It was also made easier by the fact that consumers are increasingly asking for that visibility, and increasingly yield the sustainable practices behind what they’re buying. And it was also helped, I think, by a supply partner base that we have, many of whom have got similar values and similar commitments to their own chains. Therefore, there was a good integration of belief systems towards that agenda, albeit that the targets were extremely stretched.
Having been at Unilever for a while, you must have seen firsthand how the procurement strategy and sourcing strategies have changed. So how the new announcement by Unilever will affect you on a day to day basis.
Dave:
Because of that footprint I mentioned earlier, we’re at the center of each of these three commitments. So let me start with the zero emissions by 2039. As I said, a quarter of our emissions base is with our supply partners. So we are working very closely with those partners to achieve science based targets of reduction. We’ll do that in a prioritized basis with our largest impact suppliers first, but we actually want to make that movement a viral movement across all of our procurement base. So that people are aware as a supplier of their own impact and of themselves setting their own targets for reduction.
Dave:
And we will increasingly prioritize suppliers who have got that same ambition and are working towards those targets. And secondly, the brands we communicated last week are going to invest a billion euros over the next 10 years. And we’re going to be doing that in areas of land restoration, reforestation, sequestration technologies, and wildlife and water programs. And we in procurement are at the center of ensuring that those programs land with our suppliers. We have a specific team within the procurement team who are specialists in this area, and are really the center point of this expertise of work within Unilever. On deforestation, how we supply and where we supply from are becoming increasingly important.
Dave:
And the visibility, transparency and traceability of sourcing from known origins is becoming increasingly demanded by consumers. Therefore we’re going to be using new and emerging technologies such as satellite monitoring, geolocation tracking, which are all going to help us ultimately know the farmer and the field that we’re sourcing from. That’s a very stretching ambition for the scale and complexity of some of the supply chains that we are operating. But it’s really fundamental to giving consumers transparency and traceability, and ensuring that we take accountability and have knowledge of our commitments with respect to deforestation. As part of that, we are going to introduce a new pioneering regenerative agricultural code that we want to apply across our supply base.
Dave:
And this is looking at not just making sure we don’t do bad, but ensuring that good is done in terms of agricultural systems. Particularly around biodiversity and restoring soil health, and preserving water access and conservation. So each of those actions are really going to be pivotal to not just the sustainability group within procurement, but actually every buyer who’s buying in these areas. They have to each become many sustainability experts across climate and land use.
Are you also working with tech companies or partners or consultants to work with you on these projects?
Dave:
We’re really excited to be working with both very large scale companies like Google and the Scott Lab, and also more nascent developing companies who are looking at this high tracking technology. We’re meshing those companies together in an ecosystem of approach that ultimately gives us monitoring by a satellite, traceability through geolocation tracking, ultimately helping us hold deforestation by knowing exactly where things come from. In parallel to those programs, we’re also working with Earth Equalizer, Aidenvironment and Global Forest Watch platforms to investigate how peat and forest burning areas are affecting lands, and ensuring that we have satellite imagery of that. So the mapping technology in combination with the geolocation and tracing technology and the Blockchain technology will ultimately give us full visibility. Almost a digital twin of agricultural systems and movement, and that’s really what our ran down ambition is.
These are interesting times to do something like this, during a global pandemic.
Dave:
Yeah. It makes it more challenging, but it probably makes it even more important. Understanding sources of origin, understanding the effects on our supply base is really important, digital mapping of a source. And I can realize that that can come across as a technology only based approach. But what it actually allows us to do is to know the farmer. I was, a couple of months before COVID lockdown, lucky enough to meet our farmers in Indonesia who were working directly in coconut, sugar, palm. And seeing how they’re operating, these people are really the stewards of the land. Therefore, the technology allows us to really have a direct relationship with, rather than through multiple traders where we lose that visibility. So we’re very keen to work with an increased number of direct relationships with these stewards, small holder farmers and farmers.
In recent years, procurement has been through its own kind of revolution in terms of becoming a much more strategic role within enterprises. This really underlines that doesn’t it?
Dave:
Yes, I think so. It’s evolved from a cost management function in many companies into a large strategic driver, a driver that in our language within procurement with purpose. And you’d say Unilever spans from obviously buying better, but also into buying more responsibly and growing through partnerships. So those are our three big levers of influence and obviously partnerships, it becomes the full elements of our business. From agricultural systems, right through packaging systems and business services systems. And these partnerships are really critical for us going forward. And they’re going to be critical in terms of helping us in our journey towards zero emissions, towards deforestation and working with communities also.
We talked a little bit earlier about the kind of important partnerships, are those kind of key partnerships going to be absolutely integral going back to Unilever changing its procurement strategy?
Dave:
They are without doubt. And these partnerships are evolving and broadening from a typical, you’re a partner because you’re quite a large base of spend, into you are a partner because you’re a fundamental part of development that’s helping towards our purpose. So some of the partnerships we have and the examples I was giving around technology, very small companies that are absolutely critical we believe, to long-term track and trace technology. And therefore building strong partnerships with them is really important. And part of that partnership is making it simpler to operate with a company like us. So I realized that we can seem very complex organizationally, our scale is large. So part of the job in partnerships is to ease entry of new and nascent companies into our chain, helping them operate through our chain, and therefore allowing them and us to make a greater impact within the organization for the planet and the environment.
What would you say are elements of the new sustainable practice that excite you the most?
Dave:
Without question, it’s the opportunity to use technology. Whether this is Cameron temperature monitoring systems and fields, or whether it’s a track and trace and blockchain, back to farmers and allowing visibility and economic visibility for the farmers through the chain. Through to mapping of land systems, land uses, animal systems, biodiverse systems. And ensuring that no product is coming into our chain from those depleted resources or converted resources. So the technology opportunity here I think is enormous and that’s very exciting, but that link then to the social aspect of really connecting more directly with more of our farmers and smallholders. I came a long time ago from a farming background through grandparents, and I really have a passion for ensuring that we include these people. They are the stewards of the land and the people that are most directly in control of making sure that the land is not deforested. That we’re using healthy systems of agriculture, regenerative systems about agriculture.
Dave:
That these people are paid in the proper manner, and they’re not exploited. Women in these communities are properly included with proper equity in agriculture systems are really, really exciting changes that are going to make a difference for the long-term of their business and ultimately our business. So those two aspects, the social inclusion we can drive for this agenda and the technology unlock that allows us to have access to those people, I think are two really exciting elements for me.
Dave:
I always feel we like, as a company, to set extremely stretching goals for ourselves. We’re quite a humble company, and we’re a company that needs partnerships, needs assistance and wants to make a difference broader than our own chain. And therefore, looking for wider peer companies to be involved with us, to help us in this program, working with NGOs, working with governments. We feel it’s really important to us to make a broader impact than just what is in our chain. It is a call to action for all and a call for inclusion in all, to be involved in this agenda. There’s many great companies you’re seeing enhancing similar stretching targets, and I think we’ll make a bigger difference by doing more of this together.
