08 Oct 2019
Unilever‘s Chief Procurement Officer talks 400 brands, trust and palm oil
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Unilever's Chief Procurement Officer Dave Ingram speaks to OBSERVE about the challenges and principles behind running a sustainable supply chain.
Unilever, the Anglo-Dutch consumer goods group, has over 400 brands. That involves a €35 billion spend working with over 70,000 suppliers and 1.5 million farmers around the world.
OBSERVE: With such a large and cross-border supply chain, how can Unilever bring about change effectively and consistently?
Dave Ingram: We set very clear expectations for our suppliers, with mandatory minimum requirements included in our responsible sourcing policy and sustainable agriculture code, which also contains details on what we consider to be good practice and guidelines for continuous improvement.
We evaluate all our suppliers through our supplier qualification system, to make sure they meet our high standards.
Where we find our expectations are not being met, we work to develop suppliers and help them improve.
When they are not willing or able to improve, we no longer give them our business.
OBSERVE: How do you ensure the responsible sourcing of raw materials, not just with strategic suppliers but further along the supply chain?
Dave Ingram: We have a fundamental responsibility to know our supply chain and address the issues that exist. If workers are being abused, waterways are being poisoned, or forests are being chopped down illegally, we can’t turn a blind eye because we are a few levels removed from where it is occurring.
This is the wrong thing to do, and if we fail to act in the right way we will betray the trust we have built up with our consumers over decades and ultimately destroy the value of our brands.
Although we have a large amount of influence over our direct suppliers, when you are talking about the challenge of transforming entire industries, we have to pick our battles. We can’t solve every problem at once, so we do our best work by focusing our efforts where we have the greatest opportunities for improvement. Today, we are putting in a lot of effort on key agricultural commodities where we are globally significant buyers, including palm oil and tea.
Through our programs, we’re working to help smallholders improve their yields, and increase the quality and consistency of the crops they grow.
By 2018, we had enabled nearly 750,000 smallholder farmers to access initiatives aiming to improve their agricultural practices. That gives them the platform to boost their incomes while giving us the visibility and resilience we need to achieve a truly sustainable supply chain. By working more directly with smallholders, we can support them in areas like income diversification, health, nutrition, and education.
OBSERVE: Is there an example of a new initiative by Unilever that signals the way forward on sustainability?
Dave Ingram: If we succeed in having fully sustainable raw materials for all our own products, but this does not prevent wider issues such as deforestation from occurring, then we will have failed in the long run.
This is why we are very excited about some of our pilot work going on at the moment setting up jurisdictional approaches to transform the palm oil sector across a whole region – essentially creating a sustainable development zone where we know that standards will be high and our sourcing risks will be low. This involves working with willing sub-national governments and some of our major suppliers, which we are currently doing in four provinces in Indonesia and one state in Malaysia.
OBSERVE: Thank you, Dave.
Read our in-depth article about how other companies are managing to balance the ethical and the commercial in their supply chains.