What: Unilever CEO announces strategic sustainability collaborations with major retailers, focusing on Scope 3 emissions reduction and circular economy initiatives.

Why it is important: This move signifies a shift in how major consumer goods companies are addressing sustainability, emphasizing collaborative efforts across the supply chain to tackle the most challenging aspects of environmental impact.

Unilever is developing sustainability agreements with its top 10 retail customers, including Walmart, to address greenhouse gas emissions and waste reduction in its supply chain. CEO Hein Schumacher emphasized the importance of these collaborations, particularly in tackling Scope 3 emissions - those indirectly caused by a company's value chain.

The initiative includes partnerships like the one with Walmart, which aims to avoid a 'gigaton' of greenhouse gas emissions from the global value chain by 2030. Unilever is also collaborating with A.S. Watson to create sustainable products such as body wash and toothpaste.

This strategy represents a evolution in Unilever's sustainability approach. Two years ago, the company faced pressure from investors concerned that its climate strategy was distracting from profit growth. In response, Schumacher adjusted some of the company's long-standing sustainability goals in April.

Unilever is using climate modeling to enhance supply chain resilience, leading to changes in sourcing strategies for products like mustard seeds and tomatoes. These efforts reflect a broader trend in the consumer goods industry towards more comprehensive and collaborative approaches to sustainability.

IADS Notes: Unilever's sustainability initiatives align with broader trends in the retail and consumer goods sectors. As highlighted in "The Visionary CEO's Guide to Sustainability 2024," companies are grappling with the challenge of balancing sustainability commitments with profitability, a key issue for Unilever. Walmart's approach to sustainability, focusing on supply chain emissions and circular economy practices, mirrors Unilever's efforts. The growing consumer concern for sustainability in the US, as reported by the NRF, likely influences Unilever's strategy to meet changing customer expectations. Furthermore, the global fashion industry's facing of sweeping legislative changes for sustainability indicates a broader regulatory environment that's pushing companies like Unilever to take more decisive action on environmental issues. These trends collectively underscore the importance of Unilever's sustainability partnerships and its focus on Scope 3 emissions in the current business landscape.

Unilever strikes climate deal with Walmart