Hello, everyone, and thank you for joining our webcast today. My name is Richard Williams, and I'm Head of Unilever's Investor Relations. Today's webcast is on the subject of animal testing and is aimed at investors and analysts. It is a consumer issue and one that is receiving a lot of attention at the moment. We will focus on our safety science, brands, partnerships and our work towards regulatory change.
I'm joined by Julia Fentim, Head of Unilever's Safety and Environmental Assurance Center. Julia is a global thought leader with 30 years' experience in using non animal science to assess product and chemical safety, gained working for an animal protection organization, the European Commission and for the last 23 years with Unilever. We'll run for no more than 40 minutes, including Q and A. If you'd like to ask a question, please use the option at the bottom of the webcast window, and we'll get to as many of those as we can. So with that, over to you, Julia.
Thank you, Richard, And it's a pleasure to join you all for this webcast today. So by far, the majority of our consumers don't want animal testing. And recent surveys from Edelman, Savanta and the Fund for the Replacement of Animals in Medical Experiments Covering our key markets confirm that most consumers don't want to buy cosmetics and household cleaning products that are associated with animal testing, Either of the products themselves or of the ingredients they contain. Animal testing features alongside reducing waste, Eliminating plastic and tackling climate change is one of the major issues that citizens across our big markets want global companies such as Unilever to address and help find solutions for. And as you can see on the chart, about 75% of adults in the EU Think that animal testing for the types of consumer products that Unilever makes should be banned.
Our approach is underpinned by industry leading capability in non animal safety science, which means that we do not need to do animal testing Compliance with its brand position of no animal testing globally, which underpinned the decision to stop any imports into China Whilst product testing was still being conducted by the government authorities there, was approved by People for the Ethical Treatment of Animals, PETA. And we now have 28 brands which are approved by Peter and make no animal testing claims. With more in the pipeline currently undertaking the supplier assurance checks that are necessary. Our partnerships with global animal protection NGOs, leading research teams, other companies and government scientists, Are key to the advances we have made, both scientifically and in the regulatory acceptance and by the use of alternatives to animal testing. We work to end animal testing of consumer products worldwide and are recognized by Peter as a company working for regulatory change.
The safety of our products and the ingredients in them For people and our environment is nonnegotiable. Traditionally, safety is assessed by conducting animal testing, The data generated are extrapolated to try to predict safe levels of human and environmental exposure. Unilever has been developing and using alternatives to animal testing for over 40 years, initially starting from an ethical and corporate social responsibility standpoint, So to comply with animal protection legislation, which was introduced in the U. K. And the EU as far as 1986.
Throughout the 1990s, Unilever played a lead role scientifically in the development and validation of non animal tests for identifying skin and eye irritants, the chemicals that cause toxicity following exposure to UV light, so called phototoxins, And for measuring the penetration of materials through skin. Stimulated by policy decisions To introduce future bans on animal testing for cosmetics, Unilever stepped up its search and development investment in non animal safety science from 2004 onwards, publishing a new paradigm for assessing consumer product safety without animal testing And using that as the basis for its industry leading safety science program. The outputs from this work Not only enabled Unilever to continue innovating under the EU cosmetics testing and marketing bans What led to a change in Unilever policy in 2018 to move from a corporate position and approach to managing animal testing To it being a brand decision, with Dove and subsequently other brands deciding to make their positions on no animal testing clear to consumers And work with global animal protection NGOs to have their no animal testing claims approved. All of this is underpinned by science and data, with our work demonstrating that safety can be assured without animal testing by applying leading edge safety science and new technologies.
We now partner with over 70 other science, policy, Regulatory and animal protection leaders in our work to end animal testing across the world. And we share our science at conferences Through publications and webinars and on our dedicated Neliva Safety and Sustainability Science website. And we play an active leadership role in helping to train others, including industry and regulatory scientists in the non animal safety science and product safety assessments. I have the privilege to lead a fantastic team of Safety and Sustainability Sciences, some of whom are recognized globally for their scientific leadership and impact. The CEAC team is responsible for ensuring That all Unilever branded products are safe and sustainable by design.
The safety science we've developed, Particularly over the past 15 years, it's widely recognized as being leading edge. We always start our scientific safety assessments by considering the chemical exposures to consumers, to workers and the environment and the risks that these may pose. Scientific and technological advances have enabled us to generate much more relevant data on the safety of chemicals At much more detailed biological and chemical levels and understanding than black box animal tests and also much faster. Many of the new specific cell based assays are high throughput and can be automated. This means we can Generate data on many more chemicals in a much shorter time than doing animal tests.
What's key is that we know how to interpret these data in relation to human and environmental health impacts. And that's where computational mathematical modeling of human biology and environmental systems Really adds value. In this short Ask a Scientist video, One of a range of educational materials that we share on social media, Mabel Cotter explains in simple terms How we assess consumer safety of our products?
As a safety scientist, it's my job to make sure that the products that we make are Safe for people to use and for the planet. We do this through exposure led safety assessments. This means calculating how much of an ingredient a consumer is likely to come into contact with when they use one of our products. We then identify any potential hazards, whether an ingredient could be harmful in any way. Then we compare the exposure level of the ingredient in our products to the level at which an ingredient could cause harm, thus determining any risk.
What makes me proud is that we do this using cutting edge safety science Such as computational models and cell based assays, not animals. We just don't need to test on animals. At the end of the day, I'm a consumer too, and I want the products I use to be safe, which is why I'm so passionate about what I do.
So moving from Safety, Science and Assessments to our brands. In July 2018, Unilever's leadership executive endorsed the change to a brand led approach on animal testing. This is another big step on our journey to Strengthen consumer trust in Unilever's brands, in our products and science through providing greater transparency and engaging more proactively in sharing what we do. Given the sensitivity of the animal testing topic, it was decided that any brand making no animal testing All vegan claims must be approved independently by a credible and trusted global animal protection NGO. The importance of the U.
S. Market for Dove and many of our leading beauty and personal care brands meant that we selected to work with PETA And it's Beauty Without Bunnies program. Consumers trust the PISA logo on product pack and in brand communications as proof that the brand is not associated with any animal testing. We have a strict approach agreed with Peter, Which means that for a Brew Brands, we can demonstrate that there is no testing of products by government authorities And that there have been no animal tests conducted on ingredients in the products by Unilever's suppliers after the 31st December 2010. These are additional to Unilever also having a documented safety assessment for our products that does not rely on data from animal studies conducted since 2010.
As well as Dove, Tresemme, Suave, Simple, Sunsilk, Sendium, Love Beauty Planet and an increasing number of other Unilever brands are now approved by PETA with others in the pipeline, And this includes our prestige brands. Central to Unilever's thought leadership and impact is our partnership approach, Collaborating with leading academics to advance our scientific capability, to influence the use of alternatives to animal testing by the industry and Regulatory Scientific Communities and to help shape science based policy change. We have particularly strong research collaborations on non animal, so So called next generation risk assessment approaches with the University of Cambridge and the University of Wageningen. And we partner closely with chemical suppliers, Such as InnoSpek and leaders in the development of new non annual methods such as TOXIS. In 2018, in partnership with Humane Society International, Unilever initiated the Animal Free Safety Assessment Consortium, ABSA.
This brings together corporate and nonprofit leaders who share the goal of accelerating a modern species relevant approach to safety assessment To hasten replacement of animal testing. And in terms of awards, in November Unilever was awarded the Corporate Consciousness Award from the Humane Society of the United States for its global leadership in working to end animal testing. Last month, the U. S. Environmental Protection Agency, EPA, announced a new collaboration with Unilever to to further evaluate so called new approach methodologies for assessing chemical safety without animal testing.
We have been collaborating with the U. S. EPA Center for Computational Toxicology and Exposure to Advanced Modern Non Animal Safe Science since 2015. Developing safe and sustainable products without animal is a strategic focus area for both Unilever's Beauty and Personal Care and Home Care divisions and is an integral part of the positive beauty and clean future Likewise, ensuring we assess the safety of our food products without animal testing is an important underpinning of consumers' expectations in the area of plant based foods and is essential for our increasing range of vegan products. By its partner with purpose strategic activities, Unilever is actively working with supply partners to end animal testing for the types of consumer products In our portfolio across the world, we have asked them to collaborate on both advocacy and innovation activities To avoid any new animal testing on existing ingredients and to develop no animal testing strategies for new ingredients.
Suppliers of ingredients used in our PETA approved brands, so that includes many of our big and growing beauty and personal care brands, Must not have conducted any animal testing on those ingredients since December 2010, and they must formally confirm this to us So that we can comply with our Peter approval requirements that there is no animal testing across our supply chain. Whilst Unilever does not conduct animal testing, our suppliers may be required by regulations in some countries to undertake animal tests to register new chemicals that we would ideally want to use as ingredients in our products. We cannot use these ingredients in our PETA approved brands or in any of our cosmetic products if there has been animal tested conducted since March 2013 where we have animal testing of cosmetics and chemicals that are different throughout the world. And a big challenge for us is conflicting regulations, Which are also outdated relative to the status of our scientific capabilities. And currently, this is most apparent in the EU.
So we have over 40 countries that have now banned animal testing for cosmetics. And Unilever itself is committed to working for a global ban on animal And our competitors on this under the BE cruelty free initiative. In contrast, many countries mandate animal testing for chemicals, Including those which are used as ingredients in cosmetics and home care products. This includes the EU, Resulting in conflicting regulatory requirements for cosmetics ingredients and a lack of alignment of expectations In the methods that are used to assure safety of consumers where non animal approaches are required under the cosmetics products regulation Versus workers in the environment where animal testing are required under the chemicals regulation reach. Unilever has been active in validating new alternatives to animal testing and promoting the regulatory acceptance of these methods since the mid-1980s.
Our safety scientists played leading roles In the evaluation of the 1st in vitro test to be accepted by the OECD as replacements for animal tests. And for over 10 years, we've collaborated With Russian and Chinese government scientists to transfer knowledge and build capability in non animal methods to help remove the mandatory requirements for animal testing of cosmetic products and to modernize the cosmetics regulations. Yet today, we're still faced with 3 big regulatory and policy challenges in our quest to end animal testing across the world. And in the EU, we have 2 major challenges. Firstly, request by the European Chemicals Agency, ECA, For testing of existing ingredients under reach to fill information gaps identified during compliance checks of historical dossiers.
And secondly, for new materials, with the likelihood of many hundreds of thousands of animals being used by chemical suppliers To meet requirements under the chemical strategy for sustainability, part of the European Green Deal. Turning to China, where I know we often get questions on animal testing. Unilever has collaborated with Chinese scientists and regulators since 2011 when we hosted a symposium on toxicity testing in the 21st century at our laboratory in Shanghai, bringing together thought leaders from the U. S. With government officials and researchers based in China And also involving Unilever's own safety science leaders.
The progress made under a high level China, U. K. Governmental in the past 5 years in which we were an active player resulted in a change in the China cosmetics regulations in May 2021, Such that product testing is no longer mandated for many types of imported cosmetics. This requirement had been removed for locally manufactured Cosmetics in 2014. The Chinese regulations distinguish between different product categories.
So whilst animal testing is no longer mandatory for so called common cosmetics, where a cosmetics product safety assessment can be submitted Instead, alongside good manufacturing practice confirmation, the authorities still conduct mandatory testing of special cosmetics in their government laboratories. And these are cosmetics which claim specific functional benefits, are aimed at babies or small children Or include new ingredients. The changes made in May have made it possible for brands which make no animal testing claims To enter China as imports. Previously, they had to be manufactured locally or be sold through cross border channels. And this means, for example, But Unilever's prestige brands are now entering the Chinese market.
In fact, a Kate Somerville product, Eradicate received the industry's first ever import license without the need for animal testing from the Chinese regulator in mid June. And a Dermalogica product received the 3rd license issued, and we now have 9 successful prestige product notifications with another 19 in progress. Our focus for continuing to work for regulatory in China has now switched to hygiene and disinfectant products And also helping to develop the necessary safety capabilities for special cosmetics and new ingredients. And then just a quick comment on Russia. Unilever's technical collaboration with the Russian government scientists in Moscow started in 2,008 And resulted in the cosmetics regulations being revised in 2010 to allow alternatives to animal testing to be used for product approval purposes by the government labs.
We've just initiated a similar technical collaboration on household products and ingredient safety with the same government public health department in Moscow. So there's much work to be done over the next few years to support further regulatory changes in Russia. That have been used and manufactured safely for many years became public knowledge. The manufacturer of 2 commonly used UV filters, Symrise, Refused to accept the Eco Board of Appeals ruling that manifests were necessary and has appealed to the European Court of Justice. In partnership with the animal protection NGOs, Unilever, Dove and other companies and brands have taken a very public stand against animal testing for cosmetic ingredients.
We do not believe that it's justified scientifically as well as ethically. Requesting that the EU ban on animal testing of cosmetics be upheld. And linked to the SIMRISE case, the U. K. Government has also signaled That it intends to reverse its 23 year old policy dating back to 1998 and allow animal testing for cosmetics ingredients Under the REACH, U.
K. Chemicals Regulation. This has been criticized by companies and the trade association Signed by Quality Free Brands, including Dove, Tresemme and Simple, and companies, Unilever UK Ireland amongst them. The U. K.
And EU bans on cosmetics testing were the results of sustained consumer and political pressure To try to save the ban and the cruelty free and vegan products that consumers desire, Dove United with The Body Shop, Peter and Quality Free International. And then enlisted 100 of other NGOs, companies and brands to promote a European Citizens Initiative, ECI. The ECI and an NGO led in the U. K. On the government's website go broader than protecting cosmetics testing bans.
The ECI asks that the commission transforms EU Chemicals Regulations by ensuring that human health and the environment are protected by managing chemicals without the addition of new animal testing requirements And also to modernize science in the EU by committing to a legislative proposal to develop a road map to phase out all animal testing in the EU. A resolution on the phase out road map is being debated in the European Parliament this evening. A podcast on the European Citizens Initiative released by Eurogroup for Animal Welfare last week discusses Unilever's thought leadership and track record in alternatives to animal Explaining how we brought together Dove, The Body Shop Pizza and Quality Free International to shape and progress the ECI. We had over 100,000 signatures from EU citizens in the 1st 10 days, and we have a year to reach the required 1,000,000 valid signatures. So given the urgency of the situation, we are aiming to make this number in record time.
So to summarize, the past few years have seen considerable progress in Unilever's thought leadership capabilities and impact in working to end animal testing across the world. Unilever's approach is activated through our brands and how they engage with consumers Via their approval by PETA as animal testing free and or in advocating to bring about an end to animal testing of consumer products globally. Strengthening the safe use of chemicals and products is nonnegotiable, but we do need to be using 21st century science, Not outdated animal testing to achieve this. We are investing significantly in leading technical partnerships, Such as our collaboration with the U. S.
EPA and in partnerships with leading big global NGOs on advocacy activities To drive change in how chemical safety is assessed. Our non animal safety science toolbox Means that we do not need to undertake animal testing to ensure the safety of our products. However, some government regulations still require animal testing, And ingredient manufacturers are often required to conduct animal tests to register their materials. Upholding the EU's commitment On animal testing as a last resort, under reach essentially requires a paradigm shift in how we assess chemical safety To close the gap between regulatory testing and modern safety science. After almost a decade, Animal testing is definitely back on consumer, political and policy agendas.
And this time, companies, brands, scientists and NGOs are all standing together With Unilever playing a lead coordinating role given just how important it is to our consumers and hence to our business. We will now move to take your questions.
Thank you, Julia. As a reminder, if you'd like to ask a question, then please use the option at the bottom of the webcast window. So we have a first question. Julia, how material are Peta certified brands within your Beauty and Personal Care business? For example, what proportion of turnover do these brands represent?
It's a good question. So Dove was our 1st brand to achieve Peter certification. That was in October 2018. And we now have 28 Peter approved brands with more to come. Peter's 35 brands represent nearly 40% of our Beauty and Personal Care Turn over.
Okay. Thank you. The next question, Since animal testing isn't necessary, why is it that the EU and UK have come back on the bans they put in place years ago?
It's quite difficult to understand the thinking there. We've always lived with the fact that There is misalignment in the EU between the chemicals legislative requirements and the cosmetics testing bans. And I think it's that misalignment that's been exposed more recently with the analyses that have been done and more transparency on data that the European Chemicals Agency provide. In the UK, I think it's more that At the time, the UK were still part and parcel of the European Union discussions. And then that's the situation of translating the EU Chemicals requirements into UK legislation.
And it is unclear to know how that one actually is going to play out. And that's why we're staying very close And to the activities that are ongoing because ideally, we can intervene and have the dialogue that's needed Before, the UK takes an irreversible position in relation to cosmetics testing. In the EU, everything is now very much aligned to discussions around the chemical strategy for sustainability And the evolution of the REACH Chemicals regulation.
Thanks, Julia. Our next question, a business question. Do your cruelty free brands miss out on sales because of your business decisions not to be sold in China.
I suspect the answer to that one is that if we take a forward looking view, then Not really because of the changes that have happened in May this year. Certainly, for a couple of years prior to that, There have been some constraints, and we have played our part in overcoming those through working with Chinese government scientists and officials And as a key player in the UK, China, high level government activities. I think the regulatory advances That have been gradually opening up the China market to cruelty free cosmetics, very positive in terms of the Unilever growth plans, Certainly, extremely positive for the entry of our prestige brands into China. So I would say It's something that we've tackled and we're aware of, but actually looking forward much more positive.
Thank you. So next question, why are you putting so much effort into ending animal testing? What's the business case?
The business case really represents our consumers and the fact That as we saw in one of those early charts, somewhere over 75% of our consumers in most of our key markets I do not want to be buying consumer products that are associated with animal dusting. So that, I would say, is The key driver for many of the activities and the work that we have been doing, in there, We've talked a lot about our personal beauty and personal care products. But actually, more recently, we've been looking That's our Home Care portfolio, particularly OMO and Persil in the UK, where we see the impacts potentially of this conflict in terms of going back and requiring testing on Existing ingredients that we've used widely across our product portfolios for many years. And so Omo has started to take a stand. There's market activities in Brazil.
And you will see actually on the UK personal website where they're starting to advocate for an end to animal testing. And that's on the back of A lot of consumer engagement through our care lines, through our consumer technical insights teams, Where consumers very clearly make their position on animal testing, no.
Well, it's interesting you talked about Home Care there, Julie, because the next is, in fact, on that subject. In China, good news on cosmetics, but surprised to hear that you're still testing in home care and hygiene. What does that mean for your Chinese laundry hygiene brands? Can you confirm now annual testing? What can you do to change these rules?
And will it take years to change like for cosmetics?
So we are trying to think The cosmetics areas are a repeatable model. It is not broadly across all home care Products in China, specifically around those with disinfectant and hygiene claims. And we have developed a partnership. In fact, we signed a memorandum of Standing for a collaborative partnership with the Shanghai Government Testing Labs earlier this year To essentially, again, build the capability that's needed for them to feel comfortable in removing the mandatory animal testing requirements. Now Even after a couple of months, we're seeing progress that suggests that this will be a shorter timeline Then we had in play for the cosmetics area.
Many of the non animal approaches are common across the two areas, Coupled with the fact that I think now the Chinese government officials are becoming more familiar with the non animal approaches and able to see how those are used in terms of protecting consumers and having properly documented safety assessments.
Thanks, Julia. Now I've got 2 bits of this question. I'll split them up. So on China, is there a risk that the Annual testing exempt regulations may be reversed in the future. And how are you mitigating it?
That's an interesting question. I think the government have She put in place penalties for any manufacturers who do not Ensure that the products that they put into markets are safe. So I wouldn't necessarily seeing a reversal of the exemptions, But I do think there's a sort of a 3 year plan in place such that the Chinese are taking quite a precautionary and conservative approach And making sure that they have the right good manufacturing certification as well as carefully checking And learning from the product safety assessments that are in place. And that's why it's been extremely important that Unilever Shared our safety assessments and dossiers with the Chinese authorities over 2 or 3 years before they actually started to change The regulations. So I suspect they will have done likewise with other companies and have got quite a bit of confidence before they move to make those In May, I wouldn't see a reversal.
I would just see it progressing slowly as we go forward.
Okay. And then the other question, clearly the same person. You mentioned customer demand as the business case. Is there any cost savings when a company shifts from animal testing to a non animal testing regime?
The non animal approach is necessarily less expensive than animal tests. But I think if you took the costs holistically and you countered time in that, you would find a cost saving agenda because you can get to Speed of decisions and throughput, much faster, higher number of materials assessed, but also The speed and time to actually get the data. So I would say specific like for like comparison, non animal approach versus animal test, The costs, just depending on what the specific questions are, there's little between them. But actually, in terms of what I think we're really wanting as a business, which is to accelerate the study of potential new materials, Then definitely, the non annual approach is a better approach.
And we've had a few questions about China, but now a question about for Geographies. Did you observe significant geopolitical difference in the answers of your survey regarding the feeling towards animal testing?
There were some real surprises in the certainly in the Edelman survey data, which was the global In countries like Russia and Turkey around no animal testing. Whereas I was very familiar with Actually, the key countries which are tend to be North America, Latin America, particularly Brazil and then The UK and some of the European markets like Germany. So I think the surprises for me were the other way around. But actually, you also need to stratify that data where you can by age profile. So whereas you would say in China, it's really not so much a hot issue for certain age demographics.
When you come into the millennial and the Generation Z consumers, They are obviously attracted by what is on sale and the whole proposition of no animal testing That the Western world operates under. So that's where you see China and maybe some of the other markets From a growth point of view, needing to actually engage again on the making sure we've got cruelty free products that the consumers can buy.
Thanks, Giulio. So a very supportive question, I think. How do you think investors can best use their influence to support the pressure being put on U. K. And EU policymakers to stop the rollback on bans of animal testing.
Yes. That would be Obviously, it's potentially a little bit beyond the fact that we're asking European citizens to sign a European Citizens Initiative, But it is potentially part and parcel of the broader stakeholder dialogue that's going on. So this time, we have The big trade associations, having the discussions with the commission, we have individual companies. Obviously, we have the NGO pressure. And I hadn't actually thought about it from the point of view, but of course, I have had several discussions with the ethical investors 1 to 1 Around some of the intricacies of the split between the chemicals and the cosmetics regulation.
And of course, if we're then thinking where Citizens and consumers are really wanting to come out and the whole broader, I think, context of no animal testing, vegan and then into other Sustainability Areas. And I do think there's a financial investor piece around being able to Speak up and help us actually maybe articulate the things that the scientists maybe aren't so good at, which is that commercial impact. And The other thing is probably that we need to rethink how we're actually doing some of these assessments and actually having that More holistic sort of positioning around what we're doing and why we're doing it would be very valuable. So I guess it's just looking at those opportunities where there's conversations that could happen On a broader platform where Animal Setting might fit in as to making a point of view around investment in companies where Investors don't really want to be likewise associating themselves with animal testing unnecessarily.
Okay. Well, let's I think we could just squeeze in one last question, Giulio, and again, it's about regulation. What are the biggest hurdles to closing the gap between what Consumers want a new existing regulation.
I think there's probably 2 One's the scientific technical gap. And actually, the science is more where the consumers want us to be, But the regulations aren't. And so that's around sort of promoting the modernization of our chemicals regulations. And the other, I think, is a mindset shift. And it's the journey that myself and others have had to go on, which is Just because tradition has animal testing as a so called gold standard, that Dates back 50, 60 years or so and doesn't mean that, that should or need to be the future.
And that mindset shift of Needing to engage and think creatively and think differently versus just accepting the status quo is probably the biggest
Okay. Well, I think that's all we've got time for now. Thank you, everyone, for joining us and especially to Giulio for presenting on this subject. The webcast will be available on our website. If you have any further questions, please do get in touch with the Investor Relations team.
Thank you, everyone.