Lessons learnt: Business must drive systems change
There is much that we can do to reduce the impact of our operations and that of our suppliers, customers and other partners. But there are certain changes that require an overhaul of how our systems work – which ultimately is the job of policymakers.
As scientists are quick to warn, our biosphere is becoming ever more fragile. And the greater its fragility, the greater the risk of crossing its natural boundaries – with irreversible effects.
The Unilever Sustainable Living Plan (USLP) was established in large part to help prevent such a potentially disastrous scenario. Hence our bold ambition to halve the greenhouse gases associated with our products, for example, or to source 100% of our agricultural raw materials sustainably.
For all our efforts, the urgency of certain environmental issues continues to increase. This has caused us to think again about the challenges we face and the best way of building a more sustainable world.
Positive tipping points for systems change
Since we began on our USLP journey, we have gained a growing understanding of the systemic nature of the environmental challenges we face.
Take water as an example. When people use one of our soaps in the shower, they use water. Yet that water arrives in their shower head via a complex system involving the extraction, purification, delivery and – hopefully – recovery of that water. The more efficient this overall water system, the lower the water footprint of that shower experience.
This has led us to think hard about how we can prompt positive change not just at an individual level but at a systems level. We are excited about this approach because it opens the possibility of amelioration (‘doing good’) rather than just mitigation (‘doing less bad’).
“The basic idea is that the systems we rely on all the time, like water, power and agriculture, can be transformed to work towards sustainable outcomes rather than against them,” explains Thomas Lingard, Global Sustainability Director, Climate and Environment.
He gives another illustrative example, this time about electric power. Imagine an electricity system that relied entirely on clean, renewable sources of power. With power no longer coming from fossil fuels, the link between power consumption and irreversible climate change is not just mitigated – but removed.
Renewable power: systems-level hurdles
The challenge, of course, is how to bring about such a systems-level shift. Sustainability-critical systems tend to be large-scale and entrenched. An individual company can change how it operates but this won’t dent the system as a whole. Even collective action at an industry level is unlikely to reach the necessary tipping point for change.
We have seen this play out in our efforts to push forward renewable energy. Unilever is not a power generation company. But, we can (and do) produce our own renewable energy on many of our manufacturing sites. We now have solar power capacity installed at facilities in 18 countries, for example. In other cases, such as our Kericho tea plantation in Kenya, we have a hydro-electric unit in place to help meet our electricity needs.
Wherever possible, we also buy our electricity direct from renewable power providers. In the Philippines, for example, we’re sourcing all of our electricity from a geothermal power plant. Almost two-fifths (38%) of our grid electricity is supplied through direct purchases such as this.
Not all markets are set up for direct renewable electricity purchases, however. Most are not, in fact. On these occasions, we have to buy Renewable Energy Certificates, which correspond to volumes of clean electricity in the grid and effectively guarantee that renewable power is allocated to us.
The real energy challenge that we face is that most of the electricity used along our value chain is not bought by us, notes Thomas.
“It’s important to address our energy issue as a system challenge rather than an energy purchasing challenge,” he adds. “Solving it in this way not only supports the continued delivery of our 100% renewable grid electricity target for our own facilities (which we achieved earlier in 2020); it also contributes to decarbonising energy use in general.”
Photo by Unilever employee Carmen-Heah
Market reforms: sending the right demand signals
Ultimately, systems like the power generation and transmission are decided by public policy – both ‘hard’ policies, such as laws and regulations, and ‘soft’ policies, such as subsidies and tax incentives.
This places an onus on us to advocate for progressive changes to public policy. These changes do not have to be huge to tip our key systems onto a more sustainable footing. Two prescient examples include a mandatory carbon price and the setting of science-based climate targets – both of which we are actively campaigning for.
As well as putting forward our case for change to policymakers, our approach to advocacy also rests on showing market demand for sustainable solutions. We believe this gives policymakers the confidence to take action. In this respect, we are working hard with similarly minded companies to ensure the market signals are positive.
In the case of clean energy, this strategy is “starting to resonate”, according to , Senior Impact Manager at RE100, a global alliance of 230 companies (including Unilever) committed to 100% renewable power.
“The good news is that easy access to renewables is a competitive advantage in a globalised economy… [and] governments from mature and developing markets are reviewing their policies in order to attract an influx of clean capital that will in turn help them to decarbonise their economies,” states Aleksandra.
Through alliances such as the We Mean Business Coalition (one of whose members is the RE100 coordinator, The Climate Group), we will continue to push for pro-climate market reforms. As well as increasing renewable production, it is also important to push for change in how power is currently distributed.
The volume of clean energy in some countries is now quite high, for instance, but the high price of electricity transmission prevents the cost reductions of renewable power being realised by corporate buyers.
Photo by Unilever employee Saquib Ahmed
More systems, more change
As Rebecca Marmot, Unilever’s Chief Sustainability Officer, recently argued, now is the moment to apply the lessons we have learnt about systems-level change in the power sector to other sustainability-critical systems.
“We’ve been part of helping to advocate for renewables since the start of the USLP, and we’ve come to realise that we have to play a role in advocating for even more systems change in other industries,” she says.
Lessons for the future
- Maximise the potential of emerging technologies, alternative production methods and new business models to reduce the direct impact of our operations.
- Strengthen market signals for renewable power and other sustainability solutions by working with others to increase private sector demand.
- Continue to push for the transformation of sustainability-critical systems through our involvement in progressive policy advocacy groups and initiatives.