Contents

1. Company introduction:...............................................................................................2
2.Environmental issues faced by Unilever...................................................................2
2.1 Deforestation:.................................................................................3
2.2 Greenhouse gas emission and Mercury waste:............................4
3. Impact on the organization and its sustainability:...................................................6
3.1 Impact due to greenhouse emissions and mercury damage:.......6
3.2 Impact due to palm deforestation:.................................................6
4. Sustainability strategy for the action plan................................................................7
4.1 Strategy plan for Deforestation:...................................................7
4.2 Strategy plan for environmental waste:........................................7
5. Benefits and Impacts in implementing the proposed plans:..................................8
6. Conclusion:..................................................................................................................9
References......................................................................................................................10

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1. Company introduction:
Initially launched as a merger between Lever Brother and Marginer Unie in year 1929,
Unilever is home to a variety of products under various categories. Unilever operates in
190 countries and its area of operations includes food and refreshments, Home care
and personal care. During the early 200’s Unilever has made notable acquisition’s such
as Lipton, Knorr and Ben and Jerry’s. Headquartered in United Kingdom, the company
has established several research and development facilities in China, India, United
Kingdom. Notable acquisitions in the chemical division include ICI (Unilever, 2022).
Since its operations, Unilever has diversified its portfolio in various dimensions. The
latest category belongs to cosmetic and personal care. Notable brands have been
gathered under the company’s umbrella giving a consistent business to the firm. As of
2022, the company recorded a net income of 8.6 Billion with an employee base of
149,000 employees (Companies History, 2013).

2.Environmental issues faced by Unilever

Multinational organizations are becoming a hub to rapidly developing environmental
issues. The scope of operations of multinational companies is covering a huge region,
therefore the implications of their actions are often greatly impacted by their
commitment towards environmental safety (Guiné et al., 2021). Similarly, Unilever has
also faced a fair share of environmental issues. The following section discusses the key
environmental issues of the company followed by strategies to mitigate the impact of
these concerns.

-Deforestation: Some of the raw materials used by Unilever, such as palm oil and soy,
are associated with deforestation. Unilever has committed to sourcing all of its
agricultural raw materials sustainably by 2023, and has implemented a zero-
deforestation policy for its palm oil supply chain (Rae, 2021).

-Greenhouse Gas Emissions and Mercury waste: Unilever is a major consumer of

energy and has a large carbon footprint. The company has set a target to reduce its

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greenhouse gas emissions by 50% by 2030 and to achieve net-zero emissions by 2039
(Loger, 2017).

2.1 Deforestation:
Environmental issues of Unilever have surfaced in the past. One of the most prominent
issues include the deforestation caused by excessive use of palm oil. Palm oil is a core
ingredient utilized for many household products like detergents, cosmetics and soaps.
These ingredients are readily required by the company. However, the company has
been received criticism when two of its suppliers have been linked with massive de
forestation of palm trees.

The impact of deforestation was majorly received by the Kalimantan rain forest. The
area is home to a rare species of Orang-utan. Due to excessive de forestation the
species had faced issues like extinction. As much as Two million acres of Kalimantan
rainforest has experienced cutting down which has eventually effected the climate of
Indonesia. There have been abrupt changes in the climatic conditions of the country
worrying the environmentalists. Clearing palm forests often requires debatable
techniques such as frequent fires (Floura Southey, 2021). The repercussions of these
fires are faced by the people breathing in the same polluted firm. A considerable
amount of schools has been closed down by the Indonesian and Malaysian authorities
for experiencing excessive population. The cause of pollution is centered towards
excessive burning of palm trees. The trees are expelling carbon dioxide, which makes
breathing unhealthy and also dries out the once fertile land. The livelihood and health of
communities existing in proximity is severely affected by the action.

The impact of these actions have been received by the company in form of national
resentment through environmentally conscious segment of the society. One such
organization was Greenpeace Uk which had explicitly reported Unilever’s environmental
negligence in the following regard

As of year 2021, Unilever has strategized to reduce their impact in the palm oil industry
through cancelling out their contracts with Indonesian firms engaged in deforestation
practices. Moreover, Unilever has advanced its environmental responsibility through

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acquiring green palm certificates secures by the Roundtable on Sustainable Palm Oil)
(Rae, 2021).

2.2 Greenhouse gas emission and Mercury waste:

Gauging a company’s environmental impact is synonymous to many sustainability
aspects. One of the most prominent environmental impacts deal with greenhouse
emissions. Environmentalists are gathering a lot of focus on the issue due to
deteriorating state of the ozone layer. Consequentially, climatic changes and pollution
has been on the rise. Just like every other multinational, Unilever was also put under the
radar for their alleged carbon footprint. The company has a lot of production facilities
catering the production of household items and everyday use commodities. Given the
magnitude of the production, the carbon footprint is also huge. As of year 2021, the total
carbon footprint of the company equaled a staggering amount of 61.72 million tonnes.
Unilever has pledged to reduce the footprint over the years by strategizing various
sustainability policies catering to the issue (Global data, 2023). Unilever is actively
seeking opportunities to reduce its carbon footprint through responsible sourcing and
production practices. However, the impact is not fully resolved. Unilever commits to
reducing the carbon foot print to zero by the year 2030. The following impact has been
illustrated through the graph below.

(Marielle, 2018)

The effect of greenhouse emissions is particularly related to environmental safety;

another aspect of environmental safety is related to the chemical waste. The expulsion
of chemical waste into natural resources such as land, water streams and lakes is a

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hazardous issue severely effecting the natural habitat. These sea life and land life of
animals is negatively influenced by the presence of hazardous chemical substances
released by production facilities.

Unilever’s interaction with Mercury has been known since a while. The company had
acquired a thermometer production facility situated in Kodiak anal, India. After acquiring
the plant from U.S based company in 1987, the charge was transferred to Hindustan
Liver Limited. In early 2000’s the effect of mercury contamination was largely felt in the
beautiful city of Kodiak anal. Kodiak anal had a picturesque climate with abundance of
natural resources such as lakes and dense forests. The effects of mercury
contamination were extended to the humans. Consumption of mercury in any form is
hazardous for the human health especially affecting the brain and liver. Due to an
accentuated effect of Mercury contamination, protests were reported by the local
communities and factory workers. The protestors held strong views against the
negligent disposal methods of the factory. Mercury forms the basis of a thermometer. It
is an incredibly important resource for the product, however once the production cycle
was over the disposal methods had caused a lot of fury amongst the communities and
residents. The impacts were not only confined to human consumption elements rather it
brought a negative influence on the treasured Shola eco systems of Western Ghat. The
ecosystem comprised of tropical montane forests which had a dwarf like quality to them.
The trees were unique due to their stunted growth which was limited to 25-30 feet. After
a temporary closure of the factory by HLL, the government ordered for a permanent
factory closure keeping in view the environmental burden and bio diversity destruction
caused by the factory (Unilever, 2023).

3. Impact on the organization and its sustainability:

Environmental issues place a significant impact on a brand’s commitment towards the
society. Environmental violations can reflect poorly on a company’s positioning and
ethical behavior. The following issues have brought significant impact on the company’s
ethical standards therefore Unilever has put out stringent action plans to deal with the
impact of the issues.

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3.1 Impact due to greenhouse emissions and mercury damage:
The impact of high carbon foot print on Unilever primary subjects the company to
regulations related to carbon pricing. The mechanism of carbon pricing is implemented
to restrict companies for emitting excessive greenhouse gases. The consequences of
excessive emissions are a penalty which is known as carbon pricing. Unilever is also
subject to financial and ethical limitations related to Greenhouse gas emissions. It is
important for the company to adhere to the objective of reducing greenhouse gas
emissions to prove its commitment to the environment. Higher emissions also reflect
poorly in the financial context since company feels burdened with towering energy
costs.

The impact of mercury pollution is still an issue for the reputation of the company. More
than 45 workers had died in a proven case of contamination. The issue escalated to
towering heights damaging the reputation of the company while putting the
management through a long legal battle (McKinsey, 2023). The financial damages and
reputational losses have been escalated by agitation from local community of the
affected areas.

3.2 Impact due to palm deforestation:

Palm oil is a highly sought after commodity utilized in various products offered by the
company. Unilever cannot let go off the palm oil trade due to the convenience and
relevance attached to it. As much as 40 % of vegetable oil is sourced through palm oil
lands. Due to deforestation issues Unilever had received public pressures to justify the
de forestation issue. They responded through providing a forest foot print-an
accountability report regarding the treatment of agricultural land and its effect on local
communities. The decade of sourcing Palm oil through un reliable suppliers had brought
a tremendous backlash to the company. After the protest waged by Greenpeace came
to light, Unilever immediately cancelled their contracts with Malaysia based IOI
(Unilever, 2023). Consequently, the cancellation resulted in the company changing its
supply chain structure for the palm oil resources. The new developments include:

a. Sourcing palm oil which is de forestation free.

b. Adapting a transparent approach regarding the sources of palm oils.

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4. Sustainability strategy for the action plan

4.1 Strategy plan for Deforestation:

The core problem analyzed through the entire palm oil debacle proved to be an eye
opener for Unilever. As a result, the consequent policies of the company establish strict
guidelines regarding the sourcing of its core resources in an environment friendly
manner. The sourcing of palm oil has been restricted to certified sources. Unilever
sourced almost 94 % of their palm oil from physically certified sources complying with
the standards of RSPO. The company also targeted independent certified sources. Both
these sources added up to 99 percent for the year 2020 (Unilever, 2023). The statistics
are a testament of Unilever’s commitment to adhere to environmental guidelines The
company has established evaluation frameworks which do not let sourcing from un
identified and non-certified holders to take place. The following strategy has greatly
impacted the deforestation situation of the past. Unilever has maintained a no trade
policy outside their prescribed environmental guidelines.

4.2 Strategy plan for environmental waste:

Unilever has revamped its strategical decisions regarding waste to ensure compliance
with the global standards. The company has been pursuing a zero waste strategy since
2001. They eventually achieved their target of zero waste in the year 2012. As of year
2020 the wastage has also reduced by 96 percent despite having more production
volume (Unilever, 2023). All these strategies have been established to align the motives
of the company from an environmental retrospect. Despite a significant reduction in the
overall waste, Unilever has established guidelines to achieve the expulsion of non-
hazardous waste into landfills. The company has formulated nonhazardous frameworks
which complement the vision of producing zero waste for the landfills. The milestones
have been achieved gradually. Despite a gradual change, Unilever is determined to
reduce any possibility of waste disposal into the natural resources.

To mitigate the risks of land pollution, Unilever has placed special focus on recycling.
The process allows re-usability of the plastic waste. Plastic waste in the form of
packaging is problematic for the land and water resources of the environment.
Unilever’s plastic packing foot print equals to 690,000 tonnes. Despite a huge number,

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as much as 52 percent of the packaging can be reused (Unilever, 2023). Unilever’s
strategy of mitigating environmental risks pertaining to pollution and loss of bio diversity
have been well received in the past. The company’s stellar performance in achieving
the targets is an evidence to their unmatched commitment.

5. Benefits and Impacts in implementing the proposed plans:

Environmental sustainability makes out to be an over growing concern in the recent
times. Due to increased awareness and raging environmental issues, businesses just
like their customers should be alligned with repercussions and needs of conducting an
environmentally friendly business (Green Business Bureau, 2018). The potential
benefits of following the mentioned plans contribute to the reputation and customer
satisfaction of a brand. Research has shown that customers are more inclined to
interacting with businesses which provide a transparent sustainability strategy. The
mentioned strategies have their own benefits. The following have been discussed
below:

1. Green reputation: As mentioned earlier, the growing concerns directed towards

sustainability are no more a secret. Awareness on the following topic has evolved
the meanings of sustainability for a business (Goodland, 1995) . A businesses’
reputation is much likely to receive a competitive edge once it is linked with
environment friendly practices. Implementation of green strategies oblige a
considerable section of the customers who are enthusiastic to save the planet.
As a result, customers get more attracted to a brand’s principles while interacting
with its products. Similarly, Unilever is much likely to attract a genuinely
interested customer base who would support the brand through showing loyalty
with its products. Ethically compliant companies are much likely to acquire a
greater market share and a loyal customer base.
2. Long term approach: Unilever’s sustainable practices have been in the limelight
since long. The risk benefit analysis of adapting green practices has been
considered by the management of the company. The management holds the
view that Unilever might be incurring costs related to adapting green practices in
the initial run such as installation of recycling plants, changing sourcing methods

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 etc. However, the company in the longer run is expected to cut a lot of finances
on the energy costs due to lower emissions and carbon foot prints. Unilever has
successfully been able to cut its sourcing costs by 1.5 Billion dollars since 2008
(Brown, 2021). Turning green also helped the company save a remarkable
amount of money on energy costs. Unilever utilized renewable electricity for its
production. The arrangement has helped the company become cost effective in
their energy spending.

Conclusion:
Multinationals bear the constant pressure of attracting the right kind of audience for
sustaining a competitive business advantage. Environmental impacts of a company
contribute equally to the operational concerns of a company. Unilever has faced a
variety of challenges in adhering to sustainability guidelines all around the world. Their
focus has always remained on eliminating the environmental impact of their business.
They have successfully executed many strategies to diminish their damage through an
environmental context. Reduction in greenhouse emissions, zero waste policies and
ethical sourcing are a testament of the company’s commitment to sustainable business.

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595388/.

Companies History (2013). Unilever. [online] Companies History - The biggest

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Floura Southey (2021). Sustainability at the source: How Unilever is addressing

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Available at: https://www.foodnavigator.com/Article/2021/09/30/Sustainability-at-the-
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M., Ferreira, V., Rumbak, I., Orfanos, P., Szűcs, V., Klava, D., Korzeniowska, M., Isoldi,
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Loger, P. (2017). Environmental and social issues of Unilever. [online]
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