Hey, good morning, afternoon, depending where you are in the world, welcome to Unilever Sustainability Event and Webcast. Before I say anything more, I'd like to say a few words about safety, for those, of course, that are here in the building. Firstly, there are no fire alarm tests planned for today. If there's a fire or evacuation, a continuous alarm siren will sound. If this happens, please evacuate the building by the nearest designated fire exit, which is out the door here, turn left and straight ahead onto the street. Proceed to our collection point at Carmelite Street. Do not stop to collect personal belongings. Our security team will assist you with your exit and provide any additional instructions. Don't return to the building unless advised that it is safe to do so.
If there are any other security-related issues, there will be an announcement on the public address system. In general, if you have any safety concern or anybody feels unwell while you're here, please alert any member of the Unilever team. Now, moving to the agenda. Sustainability has been at the heart of Unilever for many years, this is the first time that we've run an event for investors that is solely focused on it. We hope you find it interesting, and we certainly will find it interesting. We have a full agenda, which I'm not going to talk through, except to point out that we have a 25-minute tea break at 3:15 P.M., and we'll finish at 5:00 P.M.
There will be a chance to ask questions from the room after each session, for which you should use the microphones next to your seats, which you'll see there. Obviously, that's for those in the room. With that, let me draw your attention to the safe harbor statement, then immediately hand over to Alan Jope, our CEO.
Short speech here. Thank you. Right. Good afternoon, everybody. Am I on? Yes. Okay. Our fire assembly point is right outside JP Morgan. When you're in JP Morgan, I noticed you can pick up the Unilever network. They are such close neighbors, and I have always wondered why they seem to have a particularly close scrutiny and ability to understand our business, but never mind. Friends, owners, commentators, those on the webcast, or as our comms team would say, Alan, don't forget you're being webcast. Please watch the loose comments. This is an exciting moment for us to talk about something very important for Unilever.
I hope that I will be able to share with you our rationale behind sustainability, what the business case is for sustainability. Our Chief Sustainability Officer, Rebecca Marmot, will immediately follow me and talk a little bit about how we go about running our business on a sustainable footing. Together after that, Rebecca and I will jointly hopefully leave some time for questions and dialogue. Let me start with a word or two on the context that we find ourselves in. Business prospers in a healthy world, and we believe that a healthy world needs a healthy business sector. At the moment, there are many data points that would suggest the world's not in great shape. Whether it's fires in California or in Australia, social unrest in previously unthinkable places like Santiago, Chile and Hong Kong, bastions of peaceful society.
There's a lot of problems in the world, and our view is that there's two superordinate issues. The first is climate change and the second is inequality. World leaders have not acted effectively on these issues. The rise of nationalism, protectionism, the polarization of society, the emergence of populist leaders can be very much traced back to failures of the system and the impact inequality and climate change is having around the world. When it comes to climate change, I think everyone's aware that there are catastrophic consequences for the world if the temperature rises above one and a half to two degrees above pre-industrial levels. Well, forget about one and a half to two degrees. We're on track for 3.2 degrees of climate change. We're already seeing it. It's not something that's going to come in the future. It's something that's happening here and now.
I'm fed up reading about our latest distribution center in the southeast of the U.S. that's got to be shut down because of an approaching tornado or a cyclone or a hurricane. Extreme weather events are becoming more and more frequent, and they're indiscriminate. The extremely affluent founders that we've paid large sums of money to, mostly on the West Coast of the U.S. to buy their businesses, it's their homes that are being destroyed by wildfires. This climate change doesn't distinguish between rich and poor. Crops are failing. Water crises are now a part of our business. We are developing products for when water crises strike in São Paulo or in Cape Town. This is not a future thing. This is a now thing. Similarly for inequality, beware the tranquilizing drug of global averages. Because on average, inequality is lessening in the world.
That's simply because hundreds of millions of people in India and China are being lifted out of poverty. It masks the true reality that both wealth inequality and local income inequality is on the rise. That's why we're seeing the rise of certain types of government and the rise of huge levels of unrest around the world. If you take these two factors of climate change and inequality, just think what population growth does to this. I came back last week from a visit to Africa, and Africa is currently, what, just over 1 billion people. The forecast is that by 2050, that'll be over 2 billion people, and by 2100, it'll be over 4 billion people. Already, Africa's got 29% unemployment, around 50% youth unemployment. Already, Africa's got failing land masses where crops are becoming less and less reliable.
There's an exodus of migrants out of North Africa into Europe. How does that all work when there's four times as many people trying to use the same land? Africa's crisis is not Africa's crisis. Africa's crisis is the world's crisis because the migrant issue is going to show up on the doorsteps of the emerging world. Although Unilever takes the long-term view, the things I'm describing are short-term issues. They're our lived reality here and now. It's something we've been dealing with for a long time. William Lever, when he founded the business, talked about multiple angles on sustainability, including concepts in handwritten notes from 1913, like the living wage, including talking about lessening the load for women in the very foundation of Lever Brothers. As you know, we resurrected that.
My predecessor brilliantly resurrected that gene in Unilever about 10 years ago when we introduced the Unilever Sustainable Living Plan. Up until now, we've had separate business strategies and sustainability strategies, and one of the things that we've been busy with this year is to integrate our business strategy and our sustainability strategy in something you see in the middle there called our Unilever Compass. It lays out many of the foundations of our business, our values, our standards of leadership, some of our core beliefs. There are a number of multi-year priorities captured in there, many of which relate to sustainability and all of which are linked to a specific business outcome. You won't be able to read, but it says clearly on there what Unilever's vision is. Our vision is to be the global leader in sustainable business.
Our vision is to demonstrate how our purpose-led and future-fit model drives superior financial performance, specifically financial results that are consistently in the top third of our industry. Let's zoom in a little bit on that circle in the middle. This captures the purpose of Unilever, which is to make sustainable living commonplace. Really, our strategy is predicated on three beliefs. A belief that brands with purpose grow faster, that companies with purpose last longer, and that people with purpose thrive. Let me give you a few data points around that. First, let's talk a bit about purposeful brands with purpose. What do we mean by brands with purpose? I think it's pretty simple.
It's brands that have gone from a model that relied on a bundle of functional and emotional benefits, makes your shirts whiter, makes your skin softer, makes your hair shinier and your food tastier, to a brand that takes a point of view on something that is a little bit more important in society or for the planet. You know our best examples of that, and you're going to hear lots of examples today. Unilever's got a kind of unique point of view on purposeful brands, which relates to what the brand says and what the brand does. We think there's an order effect there, which is a brand has to be responsibly taking action in the world to, I guess, improve society or the state of the planet before it starts talking about it.
The reason why Dove can talk about improving girls' self-esteem is because we've worked with 35 million girls, one on one, in one-hour seminars, that we have measured the effect that it changes their self-perception and perceptions of beauty. The reason why Domestos can credibly talk about trying to end poor sanitation is because we've worked with the governments of places like India to put 16 million toilets in place. The reason why Lifebuoy can talk about saving the lives of children under the age of five through proper handwashing is because we've done controlled experiments. We've taught half a billion people face to face how to hand wash properly and the value of it and the impact that it has.
Only when you've taken these actions, when the brand is doing things in the market, do we believe you have the license to start talking about it in brand communication and advertising. I think this is a slightly evolved understanding that many of our competitors and other sectors don't really understand. All talk and no action is purpose washing, and that's not the Unilever model. We have self-defined what we consider to be our purposeful brands. We call them our sustainable living brands. Basically, they have to be clear what their purpose is, they have to be taking action, and they have to be telling consumers about it in multiple countries. In 2015, we had 12 brands that we considered sustainable living brands, and they outgrew the rest of the portfolio by 30%.
By last year, we had 28 brands that we considered Sustainable Living Brands, and they outgrew the rest of the portfolio by 69%. We're seeing an acceleration of the performance of our Sustainable Living Brands ahead of the rest of the portfolio. This study, although that happens to be Unilever data, it's replicated by even bigger studies by people like Kantar and Ipsos. Kantar, they assessed whether our brands were purposeful or not, and discovered that the brands they deemed to be purposeful were outgrowing the rest of the portfolio of their other brands by 100%. They were growing at twice the rate. We're actually not happy with that measure because what we're doing is, in a way, we're declaring our brands to be purposeful.
We're in the middle of a change right now, which is to, in our continuous tracking in market, to let the consumer judge whether our brands are purposeful or not, and only when the consumer judges, Yes, I can see this brand is taking action that will benefit society or the planet. That's the question we have in our continuous tracking. When a brand differentiates on that, we will start to consider it to be a purposeful brand. Okay. We profoundly believe that brands with purpose deliver superior growth. We also believe that companies with purpose last, and I guess, the evidence in part of that is that we've now got 134-year-old business inspired by Lord Leverhulme, which was built on very purposeful foundations. We've got some interesting work going on right now on cohorts.
This is really all about, is your business going to stay relevant in society? Baby Boomers don't even pretend to change their behavior and make brand choices based on issues relating to societal and environmental responsibility. Gen X, which I just creep into by one year, we are maybe worse than Baby Boomers because we're liars. We say that we care about environmental and sustainable issues, but in fact, don't change our purchase behavior or brand choices very much at all. Gen X, Millennials, do change their behavior based on brands' commitment to social and environmental responsibility, but only so long as it doesn't cost too much or is too inconvenient.
Gen Z, the Gen Zillennials who are coming through, and those of you who have got sort of kids who are making brand choices and are under the age of 23 will be acutely aware that the position that the brand takes on environmental and social issues becomes the primary driver of brand choice. This is quite simply a matter of relevance. Our view is that as that attitude comes through society and our consumer group like a pig through a python, then it's a critical point for Unilever's survival into the future that we take a highly responsible stance on how we run our business. That's why we believe that companies with purpose will be the companies that last long for decades and decades to come. Finally, people with purpose thrive. We have built, frankly, I say this somewhat immodestly, an extraordinary employer brand.
Each year, we do our UniVoice study where we ask people how they're feeling about working for the company. This year, we had a record response. Over 90,000 employees chose to share their view. That's 82% response rate, so really a very high response rate. Our levels of engagement as benchmarked versus other good companies are extremely high. We've put 45,000 people through a one-day purpose workshop, helping people to understand what is their personal purpose. Those individuals who are able to identify their purpose and align it with Unilever's business have got an extraordinarily high likelihood of staying with the company, of recommending the company to a friend, and expressing very high levels of job satisfaction.
We have a graduate recruitment program in 54 countries around the world. We've gone from being the number one FMCG employer of choice in 17 out of 54 countries to 51 out of 54 countries that we have a graduate recruitment program in around the world. All this has happened as we've dialed up our expressed commitment to being a responsible and sustainable business. Multiple data points that would suggest that indeed, brands with purpose grow, companies with purpose last, and people with purpose thrive. Just to talk quickly about the business case for sustainability. The most important thing we believe is that it helps to drive growth. As I've already mentioned, brands that are explicit on their sustainable living purpose drive stronger levels of growth.
Rebecca will talk in a second about customers flocking to us, and by customers, I mean retailers flocking to us and wanting to partner on these issues. It's been a spur to innovation. You'll hear from Richard, I hope about the Cif ecorefill . Here we go. This little baby here, which seems to be doing very well, driven by our commitment to reducing plastic. I could talk about if you had to gather your water and carry your water to your homes, as many people around the world do, then a laundry detergent that's got our clean rinse technology and rinses away with one bucket of water instead of three buckets of water is a very meaningful development.
You won't know this, but we even have a product under Domestos called Clean Spray, which is when there's not water to flush the toilet, we're innovating with products that you can spray into the toilet, between flushes. I don't want to conjure up too many images there. I also have to say another driver of growth is the distribution reach that this allows us. Many of you will have heard about our Shakti Ammas, women in India who live in remote rural villages who typically have no financial independence, who have become micro distributors for Unilever's products, build up financial independence for themselves and help grow our business. We've now got about 100,000 women in India alone working as micro distributors.
I was recently on the beachfront in Durban chatting with a woman called Pumzile, who was basically destitute and has become an Ola ice cream vendor, an independent ice cream vendor, and she spoke with such pride about how she's now putting her two sons through private education in Durban by being an ice cream vendor. A small thing, well, it was quite a heartwarming story, and it's very good for our ice cream sales in South Africa. In addition to the growth that we get through sustainability, we are finding that it actually is a net reducer of cost. We think we've saved about EUR 800 million through things like consuming less materials, consuming less water, consuming less energy, dramatically reducing waste. We think that sustainable business actually is a lower cost business.
It definitely reduces risk, supply risk, having sustainably grown agricultural raw materials, as well as reputational risk. It's a surprise to me that PETA, the People for the Ethical Treatment of Animals, instead of coming after Unilever for allegations of animal testing, are now certifying Unilever as a company working towards animal-friendly business practices. Last but not least, we know that sustainable business builds up trust. Trust with consumers, trust with customers, trust with partners, trust with employees, even trust of investors. I think you know our model. Purpose is central to our strategy, essential to our belief system, but it's not the only element. We're equally committed to a multi-stakeholder model that seems to be gathering popularity, judging by the words of the American Business Roundtable. Those both in turn have to be accompanied. Indeed, we believe will drive superior financial performance.
This is our model for creating superior long-term value. We believe it is not purpose or profits, it's purpose as a pathway to better profits. It's a model that's served us well, but we also think it's a model that's got a lot more to give. With that, let me stop there. 40 seconds over time, sorry about that. Hand over. That was me setting the tone for the rest of the Unilever team, by the way. With that, hand over to our Chief Sustainability Officer, Rebecca Marmot. Rebecca.
Good afternoon, everyone. I'm Rebecca, I'm the Chief Sustainability Officer. Have to say, this is not a normal audience for me. I don't normally get the chance to speak to investors. Historically, I've been very much engaged with a different set of external stakeholders, and I think interestingly now, these ecosystems are colliding. The fact that I'm here, and really pleased to be able to talk to you all today, I think demonstrates the shift from sustainability being perhaps a little bit on the side and now much more mainstream. Thank you. Just a bit of history. You heard Alan talk about the sustainability journey that Unilever's been on over the past few years. As a reminder to those of you who perhaps aren't as familiar with exactly the details behind that, this is our Unilever Sustainable Living Plan that we launched back in 2010.
You'll see the three big targets that really set the scene. One around improving the health and well-being of more than 1 billion people. That's through the reach of our brands on our portfolio. One around reducing environmental impact by half, and one around enhancing livelihoods for millions of people right the way across our value chain. From the farmers in the field through to the manufacturing of the products, through to the way that we market and sell them, and eventually when those products are finished with. It looks very complex, but in fact it's simple.
It's about putting a sustainability lens right the way across our value chain, across all the different things that are important to our business. Underneath that, you'll see, we won't go into the details of it now, there are 78 very specific time-bound metrics that we measure, and they relate back to the growth trust risk cost model that Alan was talking about earlier. Unilever started this journey in 2010, and then I think we started slowly, we made some good progress. Then sort of 2012, 2013, there was a massive inflection point with the start of the consultation process from the United Nations on the Sustainable Development Goals. The Sustainable Development Goals were established by the United Nations as an international global framework, which is really the blueprint for sustainable growth and prosperous economic development for everybody in the world.
They apply to every single country. The predecessor to them was something called the Millennium Development Goals. It was very much a United Nations sort of NGO, quite closed ecosystem. What the United Nations realized is that business has to be part of the solution if we're really going to tackle the kind of macro level problems that Alan talked about at the beginning around inequality and around climate change. They reached out to Unilever and a number of other businesses to talk about how could we use our value chain, how could we use the kind of skills and expertise that you see in the private sector around behavior change, around marketing, around understanding different stakeholder audiences to make a much more positive contribution.
If you look at those different 17 areas, in one way or another, they relate to every single part of our lives and the lives of everybody that you know. From an economic perspective, the private sector saw that not only as a great responsibility, but actually a massive opportunity. It's estimated by the Business and Sustainable Development Commission that was set up especially to bring business into this process, that it's worth around $12 trillion every single year from now until 2030, creating about 380 million new jobs. Roughly speaking, that's about 10% of the forecast GDP by 2030. I think for Unilever and many other progressive businesses, it's a big opportunity for us to capitalize. We looked at that. We decided that that's how we really wanted to orient our business strategy.
We realized, of course, that it's everybody's responsibility, and if we want to do that properly, and we want to bring the same structure and rigor to sustainability that we would in any other area of the business, we needed to integrate it properly into our governance structure. You'll see on the chart here, from the board down with the corporate responsibility committee through to the work that Alan leads across the Unilever executive and assigning responsibility for different areas of sustainability right across that senior leadership team through to day-to-day operating groups in the business that look after particular areas of sustainability. For example, we have an energy committee, and you probably, or I hope you've all seen, we recently announced the switch to renewable energy right the way across our operations.
In addition to that, we have a group of external advisors in the Unilever Sustainability Advisory Council who occasionally come in, and they call themselves critical friends, or they shout at us if they don't feel we're moving quickly enough. That's people like Bill McDonough, who set up with very formative in circular economy thinking, which of course, is absolutely integral for us as we start to think about the reuse and the regenerative approach that we're taking in our business, not just to our products, but also in things like sustainable agriculture and thinking about regeneration of landscapes and farmlands where we're sourcing. People like John Ruggie, who's a professor at Harvard, who set up the UN's founding principles on human rights.
Just yesterday, some of you may have seen, he did a talk at Harvard where he looked at the ESG scorings of the top 20 and bottom 20% of U.S. companies. He saw that the companies that were scoring the highest scores on ESG were growing about 3.5% quicker than the ones at the bottom. Really all of these very complex and differently connected intersystems, systems really now coming together. Lastly, we put our money where our mouth is. Sustainability is an integral part of Unilever's reward mechanism. I don't know how clearly you can see, but at the bottom there, 25% of the bonus reward for all managers across Unilever, work level two and above across the whole of Unilever, 25% of our award is based on the achievement of seven very clearly defined sustainability metrics.
There's nothing like a reward to really focus people on making sure that they're integrating this into their jobs. How do we do this? How do we actually take the business strategy that Alan was talking about and the sustainability strategy and really mold it together into one? We use a very simple three-stage process. The first is around advocacy. How do we influence the external environment in line with Unilever's business objectives? How can we talk to the right stakeholders and think about how we shape that environment so that it's optimal for us to grow the business in a sustainable way? The second stage is partnerships. Who do we need to partner with to bring those brand programs or bring those function programs and things like supply chain and research and development to life? That's a whole ecosystem of different partners.
There may be others in the private sector, there may be NGOs, there may be government. We've got Matthew Rycroft from DFID coming in to talk to us later, to talk about the role of government, obviously tomorrow, he's quite busy. To talk about the role of government and how government can also work much more effectively with the private sector. Then lastly, the third stage , which is scale. For us, scale can mean lots of different things. It can mean rolling out our programs through digital, so much quicker and much cheaper to get information out. It can mean through the scale and the reach of our brands. If you think back to the Unilever Sustainable Living Plan I showed you at the beginning, on that first big pillar around health and wellbeing, we've reached 1.24 billion people.
That's about a sixth of the planet that we've reached through some of the programs that we've been rolling out. It can be through, and something that I think particularly is interesting to this audience, through new innovative financing models and thinking about blended finance and how you bring together the best of the private sector with finance, with government, et cetera. I've chosen three examples to try and bring this to life. One is from the developing and emerging markets, which is Lifebuoy, one from the developed markets, which is Ben & Jerry's, and then I've taken the issue of gender, because obviously that crosses right the way across Unilever's ecosystem. On Lifebuoy, the world's largest soap brand, we set out a mission to help every child reach the age of five through the simple act of handwashing with soap.
More kids under the age of five die from preventable dysentery and diarrhea than from HIV, AIDS, TB, and malaria combined because they just don't have access to soap or don't practice handwashing at the key times during the day. Again, taking the three-stage process, the first thing that we wanted to do as a business was to look at advocacy. How could we influence that external agenda in a way that would help us to increase usage of Lifebuoy and to raise awareness around the importance of handwashing? Back to the Sustainable Development Goals. During that process, we did a lot of lobbying work with partners in the United Nations and the NGOs to get a very defined indicator in there on handwashing, because we knew that for our business and to be able to roll out Lifebuoy, that was really, really important to us.
We bring that to life through working, for example, with Prime Minister Modi and the government in India, where there's now some very clearly defined advocacy targets in India around the reach of handwashing and access to sanitation and drinking water. In terms of the partnership, stage two, we work with a whole spectrum of different partners to roll out schools programs, community intervention programs, all based on the behavior change methodology that Unilever's developed and really marketing Unilever and the handwashing program that we've got as a way to stop dysentery and diarrhea. Lastly, through scale, we work with a different selection of partners like Gavi, the Global Alliance for Vaccines and Immunization, with funding from the Dutch government to roll out integrated health programs around the world.
You can see there a selection of different sorts of stakeholders that help us to scale, but always looking at what's in this for Unilever, what's in it for our partners, and how collectively can we have a greater impact. Of course, as we grow the prevalence of this program, Lifebuoy benefits because it's the world's largest soap brand. We take a slice of that market every time we increase understanding and awareness around washing with soap. Second example around Ben & Jerry's. Ben & Jerry's was a brand that Unilever acquired at the beginning of this millennium, around 2000. As you know, they very much are campaigning an activist brand, and they've kept that independence, and they've kept that spirit and ability.
They have their own separate board of directors to make sure that they continue to focus on growing their business, really on two big areas that they're very passionate about. One on climate and one on inequality. Again, taking the three-stage process, when Ben & Jerry's came to the team and we were starting to look at what might we do in Europe, they decided that for them, inequality at the moment in Europe really meant trying to tackle the refugee crisis. From an advocacy perspective, we worked with the E.U., and we did a lot of lobbying, working with consumers, getting consumers to sign petitions, really trying to encourage governments around the E.U. to resettle refugees and allow them the right to work.
The second stage of that was then setting up a very practical program called the ICE Academy, the Ice Cream Entrepreneurs Academy, to train up refugees coming into Western Europe around skills training and giving them employment opportunities within Ben & Jerry's retail channels. Alan's just talked about a similar program that we were doing in South Africa. Very much on sustainability. We learn from what we're doing in one country, then we replicate it in another. Then, of course, when it comes to scale, we're now rolling that out across the different European markets. Next week at the refugee summit that's taking place in Geneva, we're launching a special ice cream, you can't really see it very clearly on the screen, called Come Together, where there'll be a whole campaign that's connected into this advocacy and partnerships around refugee employment. Lastly, on gender.
Gender equality is hugely important to Unilever because of the, well, we all know the stats around this, but because of, A, in the workplace, the importance that gender-balanced teams can have, and there is many stats available that show that it leads to better performing businesses. Right the way across our value chain, thinking about from the women who are working in Unilever's plantations picking tea, through to smallholder farmers, through to financial inclusion at the opposite end of our value chain when we're talking about retailers, having a gender lens on what we do has proven to be extremely important for us in terms of boosting productivity and an increase in sales.
Lot of advocacy work coming out of the high-level panel from the United Nations that said one of the biggest things that the private sector can do around economic opportunity is to provide jobs and training for women in developing and emerging markets, and through the power of our advertising, to really change the way that gender is represented.
Lots of partnerships, and I think over the years, you've been familiar with the work of brands like Dove, where, as Alan said, we've reached now over 35 million women through partnerships, training girls and young boys as well, around the importance of self-esteem and actually not to be too intimidated by images of very mainstream beauty. In terms of scaling, I just talked very briefly then about advertising things like the Unstereotype Alliance, where we convened together a whole host of other FMCGs and private sector companies to set out very stringent guidelines and guidance around gender portrayal in advertising. Of course, although that's a great thing to do in terms of influencing normative change and the role and gender perception in society, we also know that where we have more progressive ads, they lead to an 18% increase in purchase intent among the target audience.
When we talk about target audiences, for Unilever, over 70% of our consumers are women. It all very much connects into social impact and of course, at the same time, leading to business results. However, having said all of that, we know that we can't do this on our own. A lot of the issues that Unilever is trying to tackle, particularly when I'm thinking right across our value chain and the sourcing of our products, we need to work with others. We do very much, in a pre-competitive way, work with other companies in the consumer goods sector and beyond around things like deforestation in the supply chain. That might be through things like industry coalitions, the Consumer Goods Forum. We're going into a section on the environment just after this.
Really looking at how can we, when we work together, make a big difference to some of these core issues that Unilever cannot tackle just on their own. On plastics, which has exploded over this past 6 to 12 months, particularly here in the U.K. since the "Blue Planet" series with David Attenborough. We're doing a lot of work with groups like the Ellen MacArthur Foundation on how can the private sector and government and civil society come together to improve understanding and education around recycling, and around collection. Also things like working with others in the private sector to tackle things like financial inclusion.
For example, we work on a project called the CEO Partnership with people like Mastercard, AXA, I know a number of them are in the room or are online, to try and look at how do we bring in marginally excluded communities into the formal financial sector. From a Unilever perspective, when we launched this program in India and we launched in Kenya, we've seen a massive increase, up to 70% sales increase by bringing our small-scale retailers into the formal financial economy. It's particularly important for our women small-scale retailers who otherwise just wouldn't have had the opportunity. Alan talked briefly about the multi-stakeholder model very much from a business perspective. As you've heard, what we want to do now is to bring together the sustainability world and the business world, and to put a sustainability lens on top of that multi-stakeholder model.
If you think about when Alan was talking, for example, about the work that we're doing with retailers, the retailers now are coming to Unilever desperate to work on really innovative sustainability partnerships. Something that was probably seen as fringe maybe a year ago, 18 months ago, is now absolutely mainstream. When consumers are going into stores, they're demanding from the retailers information about the provenance of the products, how healthy is the food that they're buying, what kind of packaging is being used, and the retailer often is the face-to-face interface with our consumers. There's a whole host of different things in both developing and emerging markets that we're now doing with the retailers.
I think when we look at how that impacts actually into consumption patterns, some of the most recent research that we've seen from Kantar says that the Gen Z will stop buying brands and products that they think, for example, are associated with companies that they perceive to be racist. 69% of those of the Gen Z that were interviewed said they're much more likely to buy from companies that contribute to social causes. Although it might be a nice thing to do, it really does translate into how people spend their money. Lastly, I said at the beginning, it's really a pleasure, I hope, to be able to come in and talk to all of you around sustainability and how it's becoming much more mainstream.
You can see there from the selection of headlines, and they're all from the past few weeks, by the way, how much more mainstream this agenda is becoming. It's through working with progressive investors like all of you in the room and online that really we can help to incentivize this much longer-term value creation model. You are the people. You've really got the power to help us to cement this sustainable business narrative and to make it mainstream. Ideally, I don't want to be talking about sustainable business and business. It is all just business. I look forward to hopefully doing a lot more work with you, getting a chance to speak to you, and hopefully together, moving forward with this narrative and really starting to make a change. Thank you.
We've got time for one five-minute question or five one-minute questions. Right, Richard? Anyone got anything on your mind that you'd like to get into? Yes.
Spoke about.
Would you mind using the mic on the thing? If you press the on button, it just means that people on the webcast will be able to hear the question.
Sorry, it doesn't sound-
Yes, it does now. Okay.
Sorry, my question was in relation to the purpose of a brand that you spoke at the outset. Some of these things obviously have evolved over time. A brand might have stood for something in one point and may no longer be relevant. How do you think about brands like Glow & Lovely in India, for example, and what it stands for, what it stood for, and how do you repurpose it?
We literally have a spectrum and we have a map of our brands and how far along they are on the purposeful journey. Some might not make it. I've been in the press saying, Oh, we're going to sell brands that can't make it. I think there will be a very small number of brands that at the end of the day, it's just too much of a stretch for them to stand for something that is purposeful, and they may be better owned by someone other than Unilever. Other brands will be able to reinvent themselves. We have a male deodorant brand called Axe, and we always used to get in trouble because on one hand we had Dove that was talking about girl self-esteem, and we had Axe that was running advertising, which portrayed misogynistic, inappropriate images of women.
Actually, a long time ago, about five years ago, we completely changed that and Axe started talking about find your magic and portraying huge diversity on images of masculinity. Actually, if I would have said to most people in this room, conjure up an Axe ad or a Lynx ad in the U.K., probably most of you would think of some inappropriate, guy sprays, scantily clad girls come flocking towards them. We haven't run one of those in the U.K. for six, seven years. It takes ages to change perceptions. We're kind of midway through that on Axe. This idea that you can suddenly pivot a brand to stand for something different is mistaken. It takes years of consistency. The Dove Campaign for Real Beauty is 15 years old now. To me, it feels like yesterday, but it's 15 years ago that started.
Now, as I mentioned to you, we're shifting from us declaring victory on when a brand's purposeful to letting consumers declare when a brand stands for something more important. We've already got the data, of course, on that. There's only a few brands in our portfolio, and you'll be sick of hearing about them, that really differentiate with consumers. Up at the top are Dove, Lifebuoy, Ben & Jerry's, very clearly seen by the consumer as standing for something bigger. The number one purposeful brand in our portfolio worldwide is Fair & Lovely. Now, that might be a surprise to some people because people love sitting in, particularly, Western commentators, sitting in comfortable offices, or press dugouts in the West, love to comment about how Fair & Lovely is imposing colonial views of beauty on poor, unsuspecting Asian women.
The users of Fair & Lovely across the continents of South Asia, Southeast Asia, and increasingly into Africa, understand that Fair & Lovely is an extremely safe and effective alternative to some very bad products that are dangerous. They also understand that they provide an entry-level, affordable point into beauty regimens, with the step up in wellbeing and self-esteem that come with that. Most importantly, they're also the ones who see on every single pack of Fair & Lovely, something called the Fair & Lovely Foundation that gives young girls in India and other places access to free educational resources so they can educate themselves using a feature phone, and get certified qualifications that allow them to break out of the family poverty trap, where those girls are basically held in service of their families.
I know I'm speaking quite passionately about a controversial brand, but it gets right up my nose when people who don't understand Fair & Lovely have a go at it, and in fact, it's one of our most purposeful brands. That was a little bit the one five-minute question, but are there any other things that we would like to go into? Yeah.
If I may, you alluded to it just then, the notion of disposal if Unilever isn't the right owner for a brand. It's a debate that we have across the sustainable investment community of engagement/innovation/investment versus divestment.
Yeah.
How do you think about the notion that you're not really improving anything by just offloading this to some other owner?
Yeah.
Why would you not rather just reinvent the formula, for instance, talking about Marmite just as an example.
Yeah
hand it to someone else?
I rather walked onto that set of barbed wire. Thanks for the chance to clarify. The first thing is, let me remind what I said, that we believe the vast majority of our business will be able to move into responsible platforms, and we will have formulation standards. You brought up the point about reformulation. Richard will talk a little bit more about packaging standards, that will be held at a Unilever level. There are many progressive things that we're doing at a Unilever level, including, for example, radical transparency of what's in our products. If you go to our websites, you'll be able to find extraordinary level of detail down to 10 parts per million of what's in our product. That lets people judge for themselves what they want to consume. We are actively looking at disposals.
We've talked about that quite openly. By far, the first lens that we look through is prospect for long-term growth of that brand or that segment or that category. In fact, in our reviews of the portfolio and what we might want to get rid of, I think sustainability profile will be a very low-level consideration, because fundamentally, we believe that most of our brands and categories can be run on a sustainable basis, in fact, need to be run on a sustainable basis. Where that's not the case, I think a slow death rather than a disposal is more likely to happen. We'll divert resources into better prospect brands. The hard-nosed amongst your community would probably correctly point out that Unilever has lost value by hanging onto assets that we didn't love.
We've, yeah, destroyed value by hanging onto assets that we don't love a little bit too long. At the margin, there will be, I suppose, a small number of disposals that we make, just because of the combination of poor sustainability profile and poor growth profile. Please, that'll be the 1%. The 99% will be us driving our business for a sustainable future. Graeme, you want to say anything else about that particular question?
No.
Okay. All right. Even though it says we've got two minutes left, I know that it's time to get up a very exciting. Are you introducing the panel or am I?
I'm introducing the panel.
Thank you.
Okay. Thank you, Alan, and thank you, Rebecca. Alan and Rebecca both referred to climate change as being one of the big issues facing the planet. Now we're going to dig a bit deeper into that subject. We're going to do that by getting on stage an internal panel of experts on climate change who are now about to bring their chairs onto the stage. Rebecca is going to lead them in a question and answer session. There'll be a chance for everybody else to ask some questions on climate change. You've got any, then start preparing them because here are some experts to talk about it. Rebecca, over to you.
Thank you, Richard. We are going to do a bit of a deeper dive now into climate change. I'm joined by Marc Engel, who is Chief Sustainability Officer here at Unilever, Lysanne, Executive Vice President in Finance and Controller, Karen Hamilton, who is our Vice President of Sustainable Business, and Thomas Lingard, who is Global Sustainability Director with specific responsibility for environment and the climate. Marc, we talked a little bit about the USLP, the Unilever Sustainable Living Plan, but I'd like now to go a little bit deeper into particularly what we've done on climate and the environment over the past 10 years.
Yeah, look, when we launched the Unilever Sustainable Living Plan in 2010, we said we want to grow the business, we want to reduce the environmental impact and increase the social handprint. You immediately come to climate as one of the main planetary issues, and as Alan also said, it's very linked, by the way, to inequality and livelihoods, et cetera. We started to formulate our climate strategy then. The first job we did is actually we analyzed 1,400 of our products on their total life cycle analysis of carbon footprint. Because we are not an energy-intensive industry, so you can say, "Well, why are you focused on carbon?" When we did that work, we actually found out that in our operations, we have about one and a half million tons of carbon that has been reducing every year.
You add on top of that the distribution to get these products from our factories to on shelf, basically, you add another 2.5 million tons of carbon. You then go back up the chain and you go to the suppliers and you say, What is the carbon footprint of all our raw and packaging materials? There's 25 million tons of carbon. The biggest thing is actually in your home, when you make a cup of tea, when you wash your hair, when you wash your clothes, is almost 70 million tons of carbon. Whilst our carbon footprint of Unilever is only 1.5 million tons, but the total carbon footprint associated with all of our products is almost 100 million tons.
Because of that, we set ourselves a target at the time of wanting to half the carbon footprint at the most stretching level, which is at the 100 and not at the one and a half. That's how our climate journey started on carbon.
What have we actually done then at Unilever over that period?
Look, I think there is, when you look at it, obviously when you look at upstream, no deforestation in our commodity chains. The main commodity chains for us are palm oil, paper and board, soybean oil, cocoa and tea. Those are the chains that are associated with deforestation. We've done a lot in the last 10 years there to the extent that we're almost there in terms of deforestation free. Of course, it's all about the protection and regeneration of nature. The whole climate-smart agriculture, use of less water, use of less carbon footprint, use of less pesticides. In our own operation, it all has been around carbon. Then downstream in the consumer use is mostly around product innovation. Products that are made from renewable materials, products that have more of a circular design, products that washing at lower temperatures, product compaction.
It really is around products that help consumers with their part of the footprint lower it down. That's the kind of breadth of our climate program at Unilever.
Lysanne, obviously, I'm a huge supporter of all of this work. It costs money. What's the business case behind doing this?
Alan sort of articulated the business case for sustainability, and it's the same framework that we use for climate as well as sustainability. If you look at it particularly through a climate lens and if we talk about risk first, we've talked about the amount of carbon in our sort of whole value chain. Carbon pricing is something that is being talked about, and many, many governments are thinking about introducing carbon pricing. If we were to incur carbon pricing costs, that would have significant impact on our business model, on our financial model. All the work we're doing to actually take carbon out of our operations and further down the chain, because all the costs are intertwined and will come back to us, is really, really important in future-proofing us for the future.
That's one aspect if we think about one of our key sort of climate risks. If you think about the cost aspect, Alan talked about lots of savings. We saved over sort of EUR 600 million worth of savings since 2008 in this area. I'd love to say that it was three or four big projects, but it's not. It's hundreds of little things that are happening in each of our operations around the world, whether it's LED lighting in all of Australia, whether it's solar panels, whether it's using wastewater, whether it's actually just looking at our processes and the efficiencies and driving that. It's really about simple cost savings, using less. That's been very effective for us, and we need to continue to work on that process. I suppose the other one is trust.
I think we all understand that if we trust an organization, if we trust people, we have a much better connection, we understand what they're trying to do better, and therefore, it has an inherent benefit. We've talked at length about talent attraction. We actually find attracting young talent, our sustainability messages, our climate messages are absolutely fundamental for that, and we've seen the results and reaping the rewards of being able to recruit the very best. Obviously, we're here today. The investor community is becoming more interested. S&P ESG ratings, I know ours got announced the other day. This is all about building trust in the communities that we need to thrive as a business. Last but not least, consumers.
If you think about the consumer interest in the companies they're buying from, the brands they're buying, it is just enormous the amount of information that we have about our products, our brands, and our company. I always carry around, because I'm the controller Unilever's annual report and accounts. That grows bigger year- on- year because of people's desire for more information and to understand us better as an organization.
On consumers, we are an FMCG company. There's been an explosion of stuff in the press, in the media around climate. Karen, how do we try and deal with some of those issues in a consumer-friendly way and tell the stories about what we're doing with our brands?
Yes. I think you're absolutely right that we've seen a real step up in consumer interest, and we're seeing that from a number of studies, whether that's Ipsos or Pew, and particularly amongst Millennials, Gen Z, and also generation S, the Silver Generation. What we can see is, rather like Alan was referring to a kind of spectrum of our brands in terms of purpose, we also have a spectrum when it comes to action on climate. Ben & Jerry's is a very obvious one, climate justice and social justice they've been campaigning for decades. You'll remember some of the work that they've done and perhaps some of the campaigns you've heard of, like If It's Melted, It's Ruined, which they campaigned on it during the Paris climate talks.
Seventh Generation, you may be less familiar with, our home care brand, mainly based in the U.S. In 2019, they have tied together with a group called the Sierra Club. What they realized in Seventh Generation was that just as Marc was explaining, their greenhouse gas footprint is very linked to the way that their products are used in the home, especially their laundry detergents washing in the washing machine. They campaigned for a shift to renewable energy in 100 cities across the U.S. during 2019. Together with the Sierra Club, they've reached 100 cities who've committed now to get to 100% renewable energy by 2030. In doing so, they also saw an uplift in the penetration of their own brand, and positive response from consumers and recognition for that.
I think that's a good example of one of the brands that's really put climate at the heart of the proposition. As we see consumers becoming more interested, and we know from research that over 80% of consumers are saying, Look, I need some help. We believe that more of our brands can take action on climate change, either through their claims, and/or through their products. That's the other part of the spectrum. Since I think that in fact, what we're going to see is that climate will become the new plastics for consumers. It will become a factor for many brands in their consumer goods industry. If we take Simple, our skin care brand, they are telling consumers that 100% of their products are made from renewable energy, and letting consumers know Love Beauty Planet is doing the same.
When it comes to products, we have innovated on a number of fronts. Laundry with compaction and concentration of the powders and liquids, and we're making some quite radical step changes there and have done over the last decade. Even just in 2019, we shifted by 10% to 20% in terms of that concentration. Removal of the phosphate ingredients is another example. Air-powered hairsprays, concentrated hairsprays. Finally, in the area around helping consumers who are affected by climate change and will need to adapt. We think the biggest space there is actually in water, because a lot of our products need water in order to work, if it's a shampoo or it's a bar of soap. So we've introduced dry shampoos, leave-on conditioners, fast rinse conditioners. We've also introduced a number of really interesting innovations when it comes to laundry.
Our latest is called Magic. We've launched it in Tamil Nadu in India, a state in India, which is really at risk of water scarcity. There the washing is done mainly by hand in buckets. One bucket to wash the clothes, four buckets to rinse. We've introduced an additional product, if you like. It's a new product in our portfolio, which cuts down the rinsing from four buckets to one, expansion for us, and a real benefit for the people who are doing the laundry.
That example of how our products are helping consumers with their climate change problems in terms of water scarcity is quite an interesting evolution in the thinking. If we think back originally to when climate change started to be talked about, it was very much about companies' impact on climate change. That's why we have all the mandatory disclosure we do on carbon emissions. What are businesses doing to the environment? What we see now is a shift in thinking and an evolution of thinking, and an addition to the thinking. We needed that thinking. Really to say actually how dependent are companies on the environment? That is really a shift in evolution that we now need to think on. The focus just on carbon emissions has been great, and there's been great improvement, particularly in the U.K. environment.
Shifting our thinking, shifting how we think about the risks to the business. If we think about some of the work that Graeme and I have been heavily involved in terms of the Task Force for Climate Disclosures that's been led by Carney and Bloomberg is really about making sure that companies are disclosing and thinking about how they are dependent on the climate, and carbon pricing is one of those factors as well. We've done lots of work in this space, lots of deep dives to try and understand what water scarcity actually means for us, what agricultural yields means for us. A couple of years ago, we started looking at our raw materials. We started off with soy. We're now doing a lot of work on tea and palm oil, really to understand.
When you look at it overall, our initial findings are that changes in one to two degrees won't change our business model too much. I have to say that we've learnt a tremendous amount, and it's making us think about how we source things and how we look at demand going into the future. Some really interesting findings to embed into the business.
Thomas, earlier I talked about advocacy because what we're trying to do at Unilever is to influence the external environment. On climate, how does Unilever play a role? We're one company. Climate change impacts everybody. It's not something that national governments can control. How do we tackle that? What do we do?
Sure. Well, climate advocacy has been part of our climate strategy right since the launch of the USLP. As Marc explained, this whole value chain approach, we've effectively been setting ourselves targets for things way outside our own control. You only can deliver on those targets if you bring the rest of the world with you, and that means companies, that means governments. Particularly, I think in the run-up to the Paris climate summit, we were engaged quietly in the background before that. We realized that it was not going well. We wanted to be part of a leadership group of companies encouraging governments to set a really ambitious framework because so much will flow, we thought, from the Paris Agreement.
We came out in January 2015 with a bold statement in favor of net zero by 2050 emissions as the target the world should be striving for. Really it was only some of the hard NGOs that were pushing for this net zero by 2050 target at that time. That is broadly consistent with keeping temperatures to no more than the one and a half degrees above pre-industrial levels that Alan talked about. That started to have this effect of socially normalizing that because it was big businesses now asking for this.
If you talk to the people close to the Paris Agreement, if you talk to Christiana Figueres, who ran the UN negotiations, she will tell you that the voice of business in that process was fundamental to getting a global governmental agreement to strive for that target. Since Paris, of course, that's just the UN agreement that has to be put into practice around the world. We've been very active in different markets, pushing for now the local versions of that to be enshrined into law. You have the U.K. now, with a net zero by 2050 target that Unilever was active in pushing for. You've got conversations in the EU. Getting a little bit differently in the U.S., but you're making progress at a state level and city level in many places. We also get engaged on crunchy issues directly relevant to our business.
On renewable energy, we're part of a coalition called RE100 that's run by CDP and The Climate Group. That brings together over 100 businesses committed to renewable energy, both to share best practice in how you do that, but also to lobby in countries where we maybe need a little bit of opening up of the energy markets that allow us to sign the kinds of purchase power agreements for renewables that we want to buy. Also on forests, we work with the Tropical Forest Alliance, which is a kind of advocacy and partnerships coalition of donor governments, tropical forest countries, and companies like Unilever and others in consumer goods to put in place new approaches to ending deforestation. Slightly techy, but really interesting example around hydrofluorocarbons, which are really nasty climate gas.
Some of them are used as refrigerants, used sometimes are over 1,000 times more potent than carbon dioxide as a warming gas. 10, 15 years ago, all the ice cream freezers, all the chiller cabinets in the world would've used those as their refrigerants. We've got together with Greenpeace, with UN Environment, with Coke and Pepsi and Red Bull, and did partly a technology platform sharing, but also an advocacy effort to develop new technologies and then get the regulations changed to allow HFC-free freezers to be used around the world. That's now our standard refrigerant platform for all of our ice creams, for Ben & Jerry's and Magnum and Cornetto and so on, and we've got over 3 million of those units now around the world.
Marc, how does this impact our sourcing? Lots of the areas that we're sourcing from, there are climate change issues. Has that had an impact on how we do our sourcing? Are we sourcing from different places? What does it mean?
Well, to an extent, yes, because when you look, if you take an example on palm oil, we have really chosen Sumatra as our sourcing hub. We have invested EUR 150 million in an upstream palm oil fractionation plant, so that we can basically control the upstream, and tailor the formulation. There's also a product development benefit of doing that. This whole jurisdictional approach of understanding where your stuff is coming from is absolutely vital. That's also one of the reasons why, let's say, the CGF target of the no deforestation is not yet there. It is because the whole mapping on where does the stuff physically come from rather than relying on certification or mass balance and these kind of systems, and that's what we've been focusing on for the last five, six years. On palm oil, we are nearly there.
On Brazil soy, we are getting there. In the U.S. soy, we are already there. On paper and board, we're still very much in the certification space, but we are avoiding the high-risk areas of deforestation. We're sourcing paper from Norway, for instance, where we can rely on the government to make sure that there's no deforestation being done, and we're avoiding more risky countries. It's definitely having an impact on how we source and where we source. At the same time, you do need to realize that whilst you're getting your own house in order, your point about the systemic change that we need to drive, we need to drive together with other people, because if we don't source from a certain country, then other people will because they're commodities.
We need to drive systemic change together with other companies, together with governments, and together with civil societies and NGOs. On those five chains, I think that's one of the key challenges that we still have ahead of us.
Karen, Marc just talked about the CGF, the Consumer Goods Forum, which of course, is all the consumer goods companies and retailers who are working together on some of these pre-competitive issues. Do consumers understand all of these issues? Sometimes there is a lot of information out there, and not all of it is correct. How do we help consumers to navigate around this sort of maelstrom of environmental issues? You talked a little bit about it through the advertising, but do you really see a shift now with consumers caring about this and wanting to find out more?
Well, I think certainly as citizens and as consumers, people want to make a shift and they're asking, Well, how do I do it? Part of it, I think, for when it comes to the goods that we buy is, of course, the trust in the brand. That is, at the end of the day, what the brand stands for, is that there are brands that you assign a trust to. Increasingly, we are providing more information to consumers in a digestible form, and making transparent, first of all, our ingredients, as Alan referred to. Equally also, what are we doing in terms of renewable energy in our factories, and sustainable sourcing of our ingredients.
I think Hanneke will go on to talk about our brand Knorr, for example, and all of the work it's doing with its vegetables and vegetable sourcing, which is very profound, and which we share with consumers primarily on pack and on the website, because those are two of the areas where people will interact the most.
Lots from us. I wonder if anybody has any questions in the audience. If you have, would you like to put your hand up and just press the little button so the red light comes on? Yeah, I just at the side.
When you talk about or think about doing carbon pricing within the organization, is that something you're thinking about at Scope three or the 1.5 million, or billion, or whatever tons you were talking about? Or are you thinking about doing that at Scope three level?
The first thing to say is, before carbon tax comes in, we've actually since 2016, we have actually introduced an internal carbon tax in the company, whereby every carbon emitter, every site, every location, is actually contributing an internal carbon tax of $40 or EUR 40 a ton into a fund. We use that fund actually to eliminate our energy footprint. What we saw very quickly is that the greenest and cleanest energy is the one that you don't use, and you also then don't have to pay for greening it. That's what we've done internally. If and when it comes to carbon tax, of course, what will happen is that the carbon tax in your home, you will be responsible for, as a consumer. The carbon tax in Unilever's operation, we will have to pay.
The carbon tax by the transport sector will be in the pricing of the trucks. The carbon tax in the upstream will actually come through in the pricing of the raw and packaging material. What we're trying to do also working with our suppliers is that, in the timeframe we have, as long as all these externalities are still free, and we have a very clear assumption that that will change in the near future, is that we're actually using some of that money to change the business system. In our supply base, we have reduced the energy by almost 20%, and therefore the carbon footprint. In our own operation, we've reduced the carbon footprint by more than 50% in the last 10 years.
We're now going at it in the transport sector by electrification of vehicles and advocating in the EU to get more tighter standards on European trucks on the road so that the carbon footprint goes down before actually the externalities will be priced by a taxation level. To your question is, let's say, who's going to carry the cost? Well, the one who will produce will carry the cost, but at the end of the day, it will all add up in the cost of a product and therefore the price of the product, of course.
Just to add to that, a couple of brands, where, as I said, are at the end of the spectrum where climate is absolutely at the heart of their proposition, have been experimenting with an internal tax on carbon across through to Scope three. Ben & Jerry's and Love Beauty and Planet. They're very transparent with consumers as well about their value chain emissions. Ben & Jerry's invests its carbon fund, if you like, its taxes into work with dairy farmers on manure and how to capture carbon processes related to manure. Love Beauty and Planet, equally, is also investing in climate and packaging programs. We're doing some experimentation in that area.
I'll just add that, as Marc said, we're not a wildly energy intensive business, so the introduction of carbon pricing isn't some kind of sort of existential risk to Unilever. You tend to find in the political debate around the introduction of carbon pricing that those who might face the most pain are the loudest. We feel it's really important, as a representative of the rest of the economy, that we also speak up to say, Yeah, actually, this would be a really good thing in helping accelerate the transition to low carbon. If only the people who get hurt by the introduction of regulation are loud, then the governments will not be inclined to act.
That's why Unilever, since the beginning, has been part of the Carbon Pricing Leadership Coalition convened by the World Bank and the UN Global Compact, just to put that case forward, and there's now lots of good research showing that you can do carbon pricing without impacting competitiveness if it's done in the right way.
Yes.
Can you just press your button so everyone can hear online? Thank you. Thank you. Shout, that's fine.
Yeah. I'll shout.
Well, thank you very much for your time. My question was, I was hoping if you could dwell a bit more on your work with regards to palm oil and sustainable sourcing. I mean, I appreciate you've done a lot in this space, but there are kind of ongoing concerns and allegations made that Unilever as well as other household brands, they buy their palm oil from producers that contribute to deforestation and haze pollution in Southeast Asia. I know that you've severed links with suppliers that are linked with these practices, and you're very transparent in publishing reports about public grievances and things like that. What are you doing to enhance monitoring and traceability over this?
Yeah.
Can you repeat the question?
Yeah, I will do that. The question is to tell a little bit more about palm oil, given the fact that it's still a very controversial topic in the media, in the press. What is Unilever doing about it? Tell us a little bit more how you work with suppliers, et cetera. I think, our palm oil journey has been, let's say, going for a long time. I remember the day I was appointed as Chief Procurement Officer in 2008, and I came here for my first day at work, we had the gorillas on the building from Greenpeace, and that really started my own awareness of this journey in palm oil. We've been founding members of the RSPO, the Roundtable on Sustainable Palm Oil. When they introduced certificates, which were necessary to get, let's say, the conversion to sustainable plantations started.
For a very long time, Unilever has been buying 80%, 90%, 70% of the world's certificates, et cetera. When we then found that there was enough tipping point to go physical segregated, we've been basically on the journey of making sure that our palm oil comes from certified and traceable sources. We've also, last year, as the first company in the world, actually published our whole palm oil supply chain. We've published 1,800 palm oil mills where we are sourcing our palm oil from. We very strongly believe that the bit that is missing in making sure that the industry transfers to a more cleaner practice and a no deforestation practice is for companies to be transparent about it.
We've been very transparent and put everything on our website, including the geo coordinates, and that lets everybody in the world, basically, have a chance on to scrutinize and to verify what we are doing. The fact of life is that there are still an enormous amount of wildfires in Indonesia, and in Kalimantan. It is still legal in Indonesia, if you're a smallholder, to actually start a fire. You ask yourself, how can that be possible? That is something that in Indonesia, as long as you're not an industrial player, you're still allowed to burn up to one hectare. The problem is once there's fire, it's very difficult to put it out. The industry is still rife with a lot of controversy.
Where we are now at the moment is we are seeing that digital and, let's say, the satellite mapping that we are getting now on daily basis is actually transforming the whole industry to another level. The integration of data on knowing where all the concessions are of our suppliers, that are then putting into the map. Knowing, let's say, following the truck movement by Google's mobile phone tracking technology, and therefore linking the oil that comes into our factory in North Sumatra and where does it coming from. You are essentially transforming the industry because the whole notion of a certificate, where basically a physical person would come in with a checklist and say, Yeah, everything is fine, but what happens a week later, nobody knows. It makes that kind of obsolete.
The technology, in terms of satellite imaging and combining data of wildfires and concession maps and all this kind of stuff, is really transforming the industry at the moment. We have a much better view now, real time, on what is actually going on in our supply chain. I think that will be the next iteration of creating a more sustainable palm oil industry. What you also see is that the big players in the palm oil industry have all made the change. It is now more the sort of the smaller players, the privately owned players, the smallholders. Don't forget there are 2.2 million smallholders in Indonesia that also have palm oil plantations. There's a big economic development thing there as well, because for a smallholder, having a two-hectare palm oil plantation makes a difference whether you can send your children to university or not.
To balance that whole. We've been focused very much in the incorporation of the smallholders into the system, because we see that the big companies are getting it, but we need to make sure that we integrate that as well. I think, let's say transparency, traceability and digital conversion on real time monitoring on what's going on in your supply chain is going to dominate, let's say, going forward. There is always, because there are so many wildfires still happening today, that's why you keep reading in the newspapers about, well, there's been a fire there and it's been associated to that. This is an inherent problem of the industry. We're fighting very hard to change that by all the, let's say, these initiatives that we bring.
Yeah.
I think Alan Jope put it quite well that you're selling petrochemicals in plastic bottles when it comes to your detergent business. Can you? Yeah. Is that better?
That's better.
Alan Jope put it well when he said you're selling petrochemicals in plastic bottles. How quickly can you move to biosurfactants? Is the supply base there already, or is this a decade long process, or can it be done quicker? Where's the consumer in this?
I'll leave the consumer to Karen. Let me just say, A, I think there's a lot of science that still needs to be completed. We're at a very exciting stage in bioscience that is required to make that switch. We already have products in the market. In Chile, we've launched the rhamnolipid product, that is an all-natural product where we've replaced the petrochemical by a biochemical. Of course, one of the things that we also need to be realistic about is that, if you replace all the petroleum by palm oil. You're robbing Peter to pay Paul because, in fact, we then are really short of land banks for palm oil. There is sugar, there is palm oil, and there are some other carbohydrates that would be suitable for that. There is the whole sourcing issue.
We have to realize at the same time that we are replacing meat with plant-based, on the other side of our business, that is also going to, let's say, put a strain on the carbohydrates that we are growing. I think home care is very much leading with that. There's a lot of thinking. We do need the bioscience. The suppliers are very keen to change. The people that we work with, and combined with those, the smaller new startup and scale-up players in bioscience are very much there. It will take some time for us to do that, and the main reason is the scale that we need. The scale that we need to do that, and to make sure that we get sustainably sourced, and a product that works as well as petrochemicals.
Nobody wants a laundry product that has only half the efficacy. I think that's one of the challenges. Karen, maybe you talk about the consumer end a bit.
Yeah, I think from the consumer perspective, there's clearly a trend, particularly in home care and beauty and personal care, towards natural products, because that's a benefit that people want. At the same time, what we're also seeing is that citizens are saying that they want to see action on climate change, and they want to take action themselves. They want to see action on plastic pollution. When it comes to plastic bottles, for example, I think that consumers will also be looking for how to close the loop, not only what might be biotech solutions or renewable material solutions. I think as understanding about climate change becomes greater, and the options become wider, we might also see that there are other kinds of technology alongside some of the biotech and naturals technologies that we can deploy to directly tackle the climate emergency through our formulations.
Is it the case that rising bioscience is higher than any government?
Of course, there's a couple of things. There is the cost and there is the price. They are two very different things, and particularly when you're looking at your commodity markets where most of the petroleum-based chemicals are commodities, and most of the biotech are still niches. There is very much also, again, will there be an industry transfer for this? That will, let's say, no doubt affect the price. On the cost side, we already know that economically it's possible. In that sense, there's nothing prohibitive around the cost of biochemicals and bioscience. There is, of course, scale and supply and demand, and there is still a lot of development that needs to be done. I don't think that the cost issue is actually the big blocker.
It's more the technology and the scalability that needs to happen because the people who own the technology don't have the capacity to scale, and the people who have the capacity to scale, there's obviously people need to partner up, and that will take a little bit of time. I think that will determine the rate of change that we're going to see.
Any more questions? Yes.
I wanted to confirm, I think you'd said EUR 40, not EUR 14 for the carbon price.
40, yeah.
Four zero?
Yeah.
Scenario analysis around this area is sort of very trendy right now. It feels, despite people like Trump, there's more of a bipartisan effort through organizations like Baker Shultz, so that a carbon price, at least in the U.S., might be a reality over the next 5-10 years. When you look out, what kind of price inflation are you thinking that EUR 40 goes to? I guess I'm also curious what the social implications are in a sense, right? Are there areas like the ice cream business that are pretty price inelastic that would carry that burden, rather than essential products for lower socioeconomic customer segments?
Yeah. Maybe Thomas wants to take that. No, you want to take that?
I think, as I said before, we're not particularly carbon intensive, even all the way along the value chain. So even if that carbon was priced at EUR 50, EUR 100 a ton, right the way through, my hunch is that's not going to be a big increase in cost. Not outside of the normal fluctuations of raw material prices that we deal with anyway. I think if you're talking about petrol, diesel for transport, I think that's going to be a much bigger impact, and we know that governments are thinking really actively about how do you manage the social impact of these transitions, where you've seen governments try to do quite ambitious things on carbon pricing and not thought about the social implications and how that's going to be received, and what extra allowances and tax breaks you put in for the hardest hit at the bottom of society.
You see the kickback. I think we're learning that as you do carbon pricing, you have to get that social justice part in right up front and not as an afterthought. My sense from what we've seen already is that's not going to be the main issue for Unilever.
If I could just sort of build on that. The carbon offsets at the moment in the market are sort of EUR 3-EUR 5. You can buy historic offsets. When you look at the WWF, they've basically said EUR 22 a ton is the kind of gold standard that can sort of stand the test of, are you really doing the right thing? It's still quite on the low end. We think that sort of between EUR 50 and EUR 70 is probably, in a 10-year framework, probably a better planning assumption where you need to go. One of the things that we need to all be very mindful of, and I said this also at the Capital Markets Day, is that the trick is in the word net.
If none of us are going to cut our emissions, but all of us are just going to keep happily doing what we're doing and we think that we can offset everything, there is simply not enough land, not enough resource, to offset what we're doing today. It would be very easy to make an announcement and say, well, we're going to be offsetting tomorrow, and we call ourselves a carbon-neutral company. The point is that we need to focus on cutting emissions because the net zero deforestation by 2050 for the world is not going to work if the emissions stay at 100% and we think we can all net that off.
I think that's one of the things that we've been focused on very much and saying, and I think we've cut our emissions in our own operation by 28% in the last 10 years, because we do realize that we need to cut as well as offset or inset.
Yes.
Hi. Thank you. Following on from that, what do you think is the most difficult challenge in actually getting to net zero by 2050? What's going to stop that actually happening?
You want to have a go, Thomas, on that?
Ooh. Alan and I were talking about this Machiavelli quote the other day, which I won't get verbatim right, but it's something about when you try to bring in a new order, you have lukewarm supporters, but really violent objectors from everyone who's going to lose out from the change. I think this is what you also see playing out politically now, is that as people, the penny is dropping on climate change. You're starting to build this support for what needs to be done to decarbonize the economy in a fast way. You also start to get some quite nasty kickbacks from people who are trying to slow down progress. That's why we've been so active in these different climate advocacy groups around the world, because we think we need to try and match the level of voice.
We might not match the level of kind of lobbying, investment and so on, that some of the big players will try to just say, Well, are you sure? Do you really want to go that fast? Have you thought about all the consequences? It's undeniable. You can't argue with the science now. If you look at the IPCC and the governmental panel on climate change reports about what Even one point five isn't great, to be honest. Two is pretty bad. Three point two is catastrophic. We're making a big choice as the world to try and do something about this. The jury's out on whether we'll get there. We think if we lend our leadership voice to that, and we encourage others to do the same, we work up and down the value chain.
No one can predict the future accurately, or we'd all be doing other things for a living. You have to be optimistic, right? You have to be optimistic that if we are all loud enough about the change, and we can help consumers and citizens around the world, bring political support to the change that's necessary, then miracles might be possible.
I think as well, I would add, when you look at some of the parallels, and Rich is going to talk a bit later about plastics, there comes a tipping point where consumers push and push and push, and that then results in action in companies. If you think, for example, with so many people from the financial community here representing pension funds, et cetera, the Secretary General was talking a few weeks ago about investing in fossil fuels, and is that right? Really encouraging investors to think about that. Actually, not that I'm shifting responsibility in any way, shape, or form, we absolutely have to get our own house in order and right the way along our value chain, we're doing lots of different things. As well, it's not just about carbon offsetting, to Marc's point. We're looking now at things like regenerative agriculture.
Actually, how do we put back more than we're taking out of the environment? There is also a shift towards that regenerative model. I think as well, from a financing perspective, I thought it was really interesting what the Secretary-General said. There's a very blatant call to action around stopping investment in industries which are known to be having a negative environmental impact. Somewhere there's a role for legislation in that. There's something around consumers and what they're demanding. For governments, it's very difficult. Governments are operating often on a much shorter term prognosis than companies. They're thinking about the next two or three years and about servicing the needs of their electorate. We've seen in the U.S. as well, what was really a very fossil-focused industry and energy sector.
Actually now, there is a realization that actually alternative energy sources are going to create jobs. They are going to boost the economy. I think once we start to also talk about the positives of the change and not just the negatives of not doing so, to me, it's a really important marker, and I think ultimately that will be the tipping point.
I think that for me, the biggest risk is that it's too far away, and so it's too easy to put it on the back burner for everybody. 2050, think about it yourself. We will all be long retired. There is going to be a real risk. You see that on the palm oil commitment. There are many companies that made palm oil commitments by 2020, and it's 2019, and there are still people scrambling. It's just too late. I think the big thing. That's also, at Unilever, we've always said, if there's a choice to lead or to follow, it is much better to lead than to follow. That's the reason why we're also doing that on carbon.
I think it would be really beneficial if we're much more explicit that if you want to hit that on 2050, what do you need to do by 2025, by 2030, by 2040? I'm just really worried that people will just say, Well, that's an awful long time away, and will not start to act now. That's really the choice that we've taken. The planet doesn't care whether a ton of CO2 comes from Unilever or from somewhere else. I think that's a real risk, in my opinion.
Could you see a situation being needed to expedite the process, where companies like Unilever need to invest more alongside other investors to, I don't know, build infrastructure, build renewable capacity to achieve that, putting back more than you're taking out?
Yes. I think ultimately, yes. It's not going to be just business or just government or just regulation. Yes, 100%.
It's very much. We talk a lot about ambition loops. It's about the choreography of all the different actors in the system. It's a bit like Lysanne's point that we haven't achieved what we've achieved through one or two big projects. It's been lots and lots of little things, and climate change will be the same. Companies coming out with bold targets on renewable energy inspires governments to go, Oh, well, maybe it is okay to have a stretching renewable electricity target because we can see all of these big multinationals that want to buy renewables. Say the same thing on forests. You get companies saying, Well, we only want to buy deforestation-free palm oil It makes governments go, "Oh, okay, we need to be able to provide that. This interaction of governments and businesses and civil society, is together what's going to drive that.
The financial system is a huge part of that. I get geekily excited about the TCFD work that Graeme and Lysanne are involved in because, while it's got possibly the worst name in the world as an initiative in being long and clunky, it's this huge unlock to get the whole of the financial system seeing climate change as another lens on risk, another way of thinking about the bread and butter of pricing in what in future is climate change going to mean financially to these companies. It's initiatives like that around the world that are slowly going to shift money from old industries to new industries and help accelerate that change.
One more quick question? Brett, because I know you had your hand up. Thank you.
How resilient is your manufacturing footprint and general business if it turns out that the world actually will heat up by 3.2 degrees? You operate in some regions that might be affected by climate change. I just wanted to understand how resilient is your whole manufacturing footprint in dealing with rising temperatures. Thank you.
Look, we sell in 190 countries, and we have manufacturing in 67. I'm not too worried about the manufacturing footprint. The issue, of course, is that the sourcing footprint is a very different matter because unfortunately, palm oil doesn't grow in the U.K. If, let's say, the Far East would be heavily affected with drought, of course, the scale of that would be far larger. I think what we're seeing is that because we live in a VUCA world today, as Alan was saying, you have hurricanes and droughts and all kinds of stuff happening today, I think we are managing that really well. In that sense, we do have the flexibility in manufacturing. It's also with all these trade and trade tax structures. We have to move manufacturing, move sourcing all the time, we know how to do that.
The question is: What does a 3.2 degree world look like? I think that is what the uncertainty is. Because is it really the end of the world, or is it a little bit what we're seeing, but it is 20% worse of what we're doing today? That I wouldn't like to take a bet on what that looks like. If we have to believe the reports, it doesn't sound very encouraging. I would be saying, look, I think for where we are today, we're in a good space.
I do think that, if the experts say that we need to keep within 1.5 degrees to keep, let's say, the current world going as it is, I wouldn't like to think about what it would like in a much more extreme scenario, because we do see, let's say, the odd crisis here and there everywhere. If that is happening every day, I think we would have probably a much bigger issue.
Graeme, there's
Good one. There you go.
I don't know who asked the question. I didn't know who asked it. Hi. That is exactly what the TCFD scenario analysis is. We've spent a lot of time encouraging within the guidelines to encourage use of scenario analysis. Lysanne and team spent a huge amount of time last year, for the first time in Unilever, putting a two degree analysis and a four degree analysis. It's on page 33 of our report and accounts. You can see exactly what we think the impact will be under both. The impact under both scenarios are quite different because under two degrees, you get more regulation. It goes right back to the previous gentleman's question about EUR 75 or EUR 100 carbon tax per ton. It talks about increasing price pressures, cost pressures. By the way, on page, I did the math while we were talking.
On page 35, you can calculate exactly what the impact of EUR 100 carbon price on Unilever's Scope one and two emissions is about EUR 150 million. The comment that was made about it's not that big by Thomas is probably right in the context of EUR 145 billion market cap company. It's all there, guys. All we have to do is encourage everybody to follow the sensible efforts that are out there, the TCFD is just one of them. It's particularly impactful because it gives you the scenarios that you're looking for. We didn't do three point two, but we did four degrees. Actually, to your point, Marc, all the detail is there of what these scenarios would entail. It just requires the effort to go through it and think about it in the context of the lens of your business. Yeah.
Okay. Right. Let's stop there. Thank you very much, Rebecca. Thank you very much to the whole panel. That was great. Thank you. While we move furniture in the room, there was a question there about palm oil. Just to mention something that about six weeks ago, we recorded a webcast from our chief procurement officer talking about our approach to sustainable palm oil, and that will give you a good half hour on the subject if you really want to understand much more about it than we were able to handle in the three or four minutes here. We will be doing a number of other webcasts on sustainable issues through this year. Look out for them if you really are interested in these subjects, because we want to try and get into more depth on some of these. Okay.
That was climate on the big world issues. Can we now switch and talk to one of the biggest consumer issues of the day, I think, and that is plastics. I'd like to introduce Richard Slater, our Chief R&D Officer.
Thank you. Hello everyone in the room here and joining online as well. I'm Richard Slater, as mentioned, Chief R&D Officer. I've been at Unilever since April of this year, having worked in a number of other large consumer companies. One of my responsibilities is to represent the company for plastics and plastic waste. Great to be talking to you today. For those that are in the room here, in the break, we have some further examples next door. Please come in, talk, ask any further questions, and there should be time for questions as long as I don't waffle on for too long in my intro. Note to self. Okay. Why are we talking plastics, and why is it so important to us?
Well, for us in Unilever, it is not only the right thing to do for people on the planet, we think it is a true investment in the long-term growth of the business as well. What I really hope you take from my short presentation today is that we actually see this as a source of incredible growth opportunity, not simply risk to be managed as a business. Also, Marc mentioned the comment of far better to lead on the challenging issues than follow. Actually, I really, truly believe Unilever is taking a leadership role here. Through that, we've got opportunities to innovate. One of the things you should see is us doing this at scale on our biggest brands, not simply taking smaller or niche brands with a sustainability role.
There is a role for that, and that's fine, but the real challenge is doing this at scale. Why plastics? I think many of you in the room and online, you're joining this because you're very engaged in this topic and it's important. I won't labor the point, but I think it's interesting just to step back for a second. Packaging has been important to consumers for some time, but plastic has really in the last couple of years hit the forefront. I think it's just such a visible and tangible issue, plastic waste in the environment compared to carbon and CO2 and greenhouse gas, which can be quite intangible. You can't see it, you can't feel it. Now, if there's plastic waste in the environment, you can see it, you can feel it. There are programs that show it in the ocean.
It becomes very emotive. I think finally people actually now have the choice. You can take a choice to find a different brand, find a different retailer. It's become a very, very important topic, but very tangible, and actually it's been quite easy for people to take alternative choices. We should say as well, plastic remains a really useful and important material. Of course, it's lightweight, it's energy efficient, it brings quality to products, it's affordable. The problem is when plastic, because it's so durable, gets into the waste stream and doesn't get reused or recycled. We've got to take a holistic approach to this because simply replacing plastic with a like for like material that is heavier, more energy intensive and also isn't recycled is not the way to go from all of the discussion we just had earlier.
Really importantly for us, there's all of the kind of environmental and doing the right thing for the planet considerations, people now are seeking out, more than half of people are seeking out sustainable packaging choices. Research has shown this again and again all around the world, not just in the West. We're also seeing when we innovate on this, and you'll see a few examples, we're actually seeing fantastic purchase intent step-ups through innovating on this area. Unilever has been at this for some time. It's not a new phenomenon. Actually in 2010, as part of what Rebecca presented earlier, we made a commitment to halve the waste associated with our products, and that included packaging. We've made great strides on that, and that included plastic, of course.
In 2017, Unilever was one of the first companies to sign up to much more stretching commitments here, and this was a recognition of taking a leadership role again. These were to ensure that all of our plastic is recyclable, reusable or compostable by 2025, and to use 25% recycled content in our products as well. These were thoughtful goals. The idea here was to create a stream of recyclable material and then to create a market for that as well for our products. Since that point, many companies and many partners and NGOs have signed up to this commitment as part of the Ellen MacArthur Foundation, and that's great to see. More recently we've realized that's not enough. Plastic is still getting into the environment and it's still an incredibly hot topic for consumers and still an issue to deal with.
Again, really proud to say in October this year we announced further stretching goals that build on 2017. These were to halve our use of virgin plastic by 2025 versus 2018. As part of that, to take 100,000 tons of plastic out of our system as an absolute reduction. The second goal we committed to was take responsibility to process, help collect and process more than our packaging footprint. Very, very stretching goals, we think the right ones, and we also think these are going to both spark innovation and growth for us, but also some systematic change in the industry here. What's our approach? A little bit of the why and what we're actually committing to, but how do we go about it?
Firstly, we have a very clear framework in Unilever, and I think this is one of the secret sauces for doing this at scale, which is a framework of less, better and no plastic. Rebecca was talking about sustainability not being some sort of side topic or a separate strategy. What I can say on plastics is that's absolutely the case. All of our global teams, our categories, our countries, and our functions have plastic commitments as part of their targets and objectives, and have this program fully integrated. I think that's one of the reasons we're doing this at such scale. Probably more interestingly importantly, what are some of the examples? Some of you might have spotted some of the products next to me here.
I want to bring it to life with some real projects, and hopefully you'll see what we're doing in practical terms. Okay, the first is less plastic. I'm actually going to take a small risk here, and do a live demo. I thought I won't take that risk myself. I was thinking, actually, who's the most foolproof person I could use? Who would demonstrate that anybody can do this and use a Cif refill? If a CFO can do it, anybody can, right? Graeme, do you mind helping me out here?
What do I need to do?
Okay, this is our Cif products. I loosened the top for Graeme, knowing Graeme was going to do it. Full disclosure. I'll explain it in a second, but I actually want Graeme just to use it first. If you can pop the refill on.
Okay.
I'm going to stand here with my fingers crossed. Okay. I'm sure there's a big wow and woo in the room that was quite. Thank you. Yeah, exactly. Well done, Graeme. Thank you.
Don't I get to squish it?
What's that?
Don't I get to squish it?
No.
Oh.
We didn't think about that bit. Phew, okay, thank you. That worked. Thank you. Well done, Graeme. A truly foolproof pack there, so no monster, no. Let me just talk about it for a second because you've seen the wow, you've seen that it works, but there's an important point behind this. I really believe when we innovate in this area, we need to make it easy and simple for people. We can't expect people to compromise massively on performance, on cost, or really changing their habits 180 degrees. One of the challenges, how do you shift habits along, but really make sure it's simple and easy for people to use? People want a more sustainable choice, and that's a clear insight.
We actually had a technical insight on this one as well because we realized for years we've been specifying our bottles and our trigger sprays to last for thousands of uses without really thinking about it. It's the sort of thing we do in R&D. We build on it, we do the next one. What we realized, if we could just get the usage of that going, then it was something to benefit the environment and consumers. These refills will sit along the shelf alongside the starter kit. You dilute it in your home. It's a simple product to use. The concentrate works just as well, if not better than the current product. It's actually cheaper on the shelf for people, and it also will unlock options like e-commerce as well. 75% less plastic, but importantly 97% less water being transported around with each pack.
In the U.K. where we've launched this, we estimate around 1.5 million bottles worth taken off just from one small launch in a few accounts. It's going extremely well, hopefully we'll see this elsewhere. The second example is Omo. This is in seven out of 10 households in Brazil. It's the number one laundry brand. We talked about concentrates earlier. Actually, Karen mentioned this. One of the big challenges, of course, is people looking for value, rightly, on the shelf. If you sell a small concentrates bottle, it can be quite challenging to get that value perception across. What we've found as well when we've launched these products is, on occasions, people use too much because of the habit, and then the product runs out too quickly again. The value perception is gone.
There is a habit in Brazil of diluting cleaners in the home. In fact, even diluting dilute cleaners in the home. We thought we'd build on that. We actually sell a three-liter starter kit with refills now to really make it obvious that you're buying a refill and a starter kit, allowing people to dilute in the home up to a three-liter volume. They're seeing the value perception. It's building on their existing habits. However, again, 75% less plastic per pack and loads less water being transported around a large country. Again, we're piloting this in a number of accounts, and I think what's important is we've got a lot of test-and-learn approaches going on there. We've iterated both of these product developments by launching, learning, and building that in. Just an example of less plastic.
Better plastic is all about making sure that the plastic we do use is fully recyclable or reusable, and we use as much recycled content as we can. We've got many examples of this going at scale now, which is fantastic. Sunlight, as you can see there, the number one dishwash liquid in South Africa, has been recyclable for some time. It's now using 100% recycled content, it's fully circular as a pack, which is fantastic to see. Really excitingly, recently we launched Dove, going to 100% recycled content in Europe and in the U.S. This is a massive project initiative for us. It's literally into the tens of thousands of tons of plastic that will be saved through this. We had to create entire new streams of HDPE high-quality recycled content to enable this project.
Again, it's always a challenge, but you can do this at the small scale. When you do it at the large scale, you really have to innovate and create new partnerships and new streams. A couple of other examples as well, at scale, Hellmann's in the U.S. will be launching in Q1 next year 100% recycled material pack. Now this is an interesting one because it's food grade, so it might sound easy, but you've actually got a certified food grade, high quality material, has to work, has to be clear on the shelf. We've actually partnered to create a new technology here that takes PET back down to its molecular state and allows it to be rebuilt as if it were virgin plastic. That's the sort of technology that will help unlock more and more recycled material as we keep innovating here.
Another example of better plastic, some of you may have read or seen this, but black plastic has had a bit of bad press and a bit of a problem, particularly in the West, in terms of recyclability. That's because the automated machines that sort waste don't see black, they're infrared. We actually co-designed and partnered a new pigment that's put into the master batch for this, that enables detection. That's actually going to save 2,500 tons of plastic just in the U.K. alone, before it's rolled out. We've licensed that technology out to others as well because we want to make the shift across all of black plastic, not just Unilever's portfolio. Many, many examples, and many brands that are doing this now. The point is we're doing this at scale on our biggest brands now.
Finally, this is the area that I think often gets the most interest, which is no plastic. If only all of the examples here were as simple as just taking plastic out, it would be an easier time that we have. There are times where you can just look at a problem from another angle and make a change. On Solero lollies, we launched in the U.K., Naked Solero this summer. Actually, we've wrapped Solero in plastic for years. We found that by cleverly creating a cardboard pack that separates them, and testing the launch, people were quite happy to buy these products without the wrapper. Fantastic, that takes plastic out of the system. The same goes for Dove in terms of naked bars and shower bars as well. Wherever you can, take plastic out of the system. Sorry.
We haven't put plastic into our Solero, by the way. This is a mock-up. Someone did ask me earlier. I just want to clarify that. Okay. You think about a brand like Knorr, which Hanneke may talk about, and how we can make all of the laminate material fully recyclable around the world, enormous volumes and a really big impact. Where possible, moving that to paper as well. Big changes on big brands. There's a point by which you can no longer lightweight materials, or you can no longer keep taking plastic away entirely. Products need packs. How do we think about it differently? We can think about some innovative options like the Minim deodorant, which is part of our Loop pilot. The idea here is, typically and shamefully with our deodorants, often within a few weeks of use, we throw those away.
Many of you will probably do that in your bathrooms at home. How about creating effectively a permanent, beautiful looking pack made of aluminum or glass, that then is refilled, each month you can buy it in store via e-com. This is a concept that we're developing at the moment and looking to test. This could be very, very minimal plastic or even no plastic. One simple example. We also have another format we've developed as part of the Loop pilot as well, which is waterless and plastic-less tooth tabs. Effectively a completely new format. Now, this won't be for everybody, but a number of people probably will, we believe will, and our early research says they will, take a choice and try this.
This can go along with options like bamboo toothbrushes to avoid the fact that pretty much every plastic toothbrush gets thrown into landfill today. Many, many options on no plastic, and it's going to take a lot of innovation, and it's going to take us trying, testing, learning, scaling what works, and not being afraid to actually fail on a few of these things as well, because they're changes to habits and behaviors. I guess the final area is also looking at refill and reuse options. We've piloted in many countries around the world refilleries in stores. For example, in the Philippines, the All Things Hair refillery, where people come into store with a permanent pack, pay by weight, and take that away.
What we're doing on those things, actually, retailers are incredibly open to these partnerships because they want excitement and people back into store. Again, not everything works with these, actually we're seeing great promise, great engagement, and actually a number of opportunities we can scale there. Finally, as Rebecca said earlier, we don't do all these things in isolation. We do these by partnering around the world. Just a few examples. Waste collection. This is Indonesia, where we have an initiative called Food Waste Banks and Plastic Packaging Waste Banks. People bring their waste along. They actually deposit the waste, by weight, they gain credits. As a community, it's effectively like a bank. You can store up those credits, cash them in, and then get benefits for the community or for the individuals.
It's encouraging waste collection in a system that doesn't actually have a great infrastructure today. There's thousands of these across Indonesia sponsored by Unilever, and actually we're collecting thousands of tons of waste, so this isn't a few kilos here and there. If you think about India, we're doing this at scale, tens of thousands of tons of plastic being collected through Unilever's initiatives. That's around the world. That's Brazil, Africa, and actually Europe as well, and the U.S. In terms of technical partnerships, the one I didn't mention earlier is ice cream. If we think about recycled material going into an ice cream, not only does it have to be food grade, it has to enable freezing, heating, and withstand all of the supply chain.
Again, an innovative technologies to partner to create virgin-like polypropylene that can then be used at food grade and used in ice cream. More and more of our ice cream containers are now moving to this chemically recycled polypropylene. This isn't going to be solved purely by doing more and more mechanical recycling. We're going to need these investments in advanced manufacturing and advanced recycling technologies to make this happen. Finally, retailers, where we can I have a real problem with the kind of term educate consumers, educate people on this. We actually just need to take a step back from that and realize that we're all people that use these products in our own lives, and we don't always have half an hour to work out what needs to be recycled, what needs to go into what bin, and how to separate everything.
My contention on this is we have a big role as companies and organizations to make it incredibly easy for people to do the right thing, to choose brands that do the right thing, as I've talked about earlier, but also very, very clear instructions, labeling, and help actually to educate. This is a partnership with Walmart in the U.S., where we're looking to educate on how we can get recycling rates up, particularly for plastic, and also avoid contamination in those streams. Even where recycling infrastructure exists, we know that people aren't recycling to the levels that they could. Just a few examples of many, many tens of partnerships that we're doing. I've gone pretty quickly through that because I really wanted to give proper time for some questions. I think we can open it up at this point and go from there.
Thank you. Hi.
That was very helpful, indeed. Just wait for the mic.
Yeah. I wanted to ask, it sort of flows on from that very last point you were making, about how do you actually get people to recycle? If you think about it, there's a whole bunch of systems we have. You think about plastic recycling codes. Does anybody know what they mean? Can you actually get a straight answer from your council as to which one goes in your bin and which one doesn't? It was interesting you mentioned about your trying these efforts of sort of having these kind of banks where people take them to. Do you think fundamentally that you see a world where actually you're going to have to essentially, as a company, take control of people bringing plastic to you and almost kind of We tried this kind of idea of governments doing it well, and it hasn't worked.
Do you see a much stronger role for actually business and kind of fundamentally the people like you to actually have to step in and almost do this for the world?
Great question. I think you can do a lot with standardizing and simplifying labeling. I think, if you think about things like food traffic lights in certain markets like the U.K., it's started to become quite obvious, and I think people are used to it now. If we think about a few years of very standard instructions as to what you put where there is a good waste infrastructure, I think that can really make a difference. We have a role, clearly, to play in that across industry and as a company. Your second question's interesting because it's kind of a yes, but from a different angle. It's not necessarily that I see Unilever physically doing the collection, physically going, Okay, no one's sorting this out.
We're going to go do this. Also, it's not a case of us we're able to sort of step back and say, Well, it's the government's responsibilities, or people should do the right thing. It's somewhere in between. I think it's a very active influencing and partnership role. It's about investments in, for example, we make investments in funds that look to build infrastructure where it doesn't exist today. We're looking at markets like Indonesia, Southeast Asia, Africa, the Americas, where infrastructure isn't great, if we're honest today, on waste infrastructure collection. How can we spark investment from others and start to build an economical case for that?
Actually, we shouldn't forget that the offtake agreements that we make as Unilever, when we start to move a Dove to fully recycled, and we need tens of thousands of tons of material, it's creating tremendous economic opportunities there, and it's creating markets. It's part of what we're trying to do with our offtake agreement as well. Thanks. Hi.
Hi. Can we talk a little bit about plastic sachets and sort of flexible packaging in general? Obviously, that's the most problematic area. You mentioned the refill station pilot in the Philippines. How much progress can you make in terms of your own redesign of your own packaging? Obviously, we've seen a ban or a failed ban on single use in India, but may come back. Obviously, it's a big exposure, big potential problem.
Yeah. Being frank, it is one of our most challenging projects. When we've said everything will be recyclable or reusable by 2025, that includes sachets and laminates. That material and those products are completely front and center to our commitment. For India, for example, one of our biggest markets, we are moving very quickly all of our sachets to being recyclable, so single material effectively. There is also the other side of that. You make it recyclable. Is it collected and recycled? It's a separate question. You have to do the first. That's what we're doing. You also have to work on the second side of that. To be completely frank, we've got a lot of brains, energy, and activities working and innovating onto how you create an economic model for that.
The waste banks and collections are a good example of that. You can reward more certain types of materials, not simply by weight, and that's one way we're looking at it. We do have to try out a few different solutions because it's got to be realistic for the people who are doing the collection. As Alan will point out, and we saw in South Africa just a couple of weeks ago, if you're collecting by weight and that's your livelihood, you're going to pick up what gives you that most quickly. We're not leaving that alone, we are going at it.
Thanks. Can I ask a follow-up question? It's interesting to see chemically recycled plastic already being commercialized. I assume it's Ioniqa or Loop Industries or one of these guys. How quickly do you think it can scale and ramp up? How big a contribution can it make to the solution?
Yeah. They are the sort of companies, yeah, exactly, that we're partnering with. I think the first thing is you've got to go in first and early and put it onto big brands, because then that creates the demand. We are seeing incredible interest from partners and organizations into this space, including some of the big players who aren't traditionally in it. My personal belief is it's going to become an incredibly important part of it, but it is going to take a few years of investment before we get there. I actually also believe mechanical recycling isn't going anywhere, and is going to need to be maintained and increased, and get more and more efficient over time as well. It's an add-on, not a replacement for mechanical.
Frankly, if we're going to really solve this on food products, on high-end personal care products, we're going to need what you call chemical recycling technologies to come in on top. Thanks. Hi.
Just the soft drinks industry is pushing for deposit return schemes to encourage recycling, and I just wanted to understand the role that you think those could play for your product and whether you're part of those same discussions.
Yeah. We have to obviously reflect the portfolio that we have, and the breadth of formats is different to some of the other players in the industry. I actually would say we're open and trying many different ways of making this more circular. I think what you find, and what I think is fantastic in Unilever is there isn't really ever this closed mind, Well, that's not our way of solving this. We tend to start with an open ear and to listen and see what others are doing. I think in terms of reuse return models, some of the examples I showed here are actually versions of that. When you think about buying a base kit and then reusing and returning. The Loop pilot, for example, is actually an option to return the product, have it cleaned, it comes back.
Whether we do a one for one system on our portfolio and our range, I don't think that's the only solution we would go for, and I don't think it's quite as straightforward as when you've got one particular format in enormous volumes and not so much of a variable range. Yes, it could be part of it, but it won't be, I think, our big breakthrough solution. Okay, just got time for one or two more I think here. Hi.
Hi. Thank you so much for the presentation. Very instructive. You are promoting the extended producer responsibility in order to help develop the recycling infrastructure. Yet in the market, and to get towards a more drastic reduction globally or market by market, taxes may be more effective. How do you plan to do your lobbying and plan to position that? Another more specific question on the black plastic. Don't you take the risk with that innovation to make recycling a bit more anecdotal? Wouldn't it be more and confuse the consumer? Wouldn't it be more effective just to change the color.
Well, firstly, change the color is a big decision on a brand that's got a lot of equity built up for years. That's one consideration. The other consideration is using dark materials and using black plastic is a fantastic way to use mixed mechanical recycled material. If everybody came out of dark materials and out of black, actually, the ability to use so-called jazz material, so the mixed recycled material, will go down dramatically. Actually, it's really important. We thought the right way to deal with that is to continue the use of that material, keeping being able to use it, keep our brand equity, and find a way to fix it. On the other question, obviously a very complex question that you ask with that. In general, we're supportive of well thought through extended producer responsibility and tax used in the right way.
It is quite local as well. It's very much dependent on the market. We're actively partnering with governments on that. We believe legislation and this sort of responsible legislation will be part of the solution. It does differ so much by market. It could be tax in one place, it could be extended responsibility in another. Thanks. Yeah. Okay, I think that's time. Thank you, everybody. Hope you enjoyed that.
A big thank you to Richard. Maybe our next webcast ought to be on the subject of plastics because there's a lot of interest in it. We'll think about that. We'll sign you up, Richard. We now have a break through till 3:40, so that's just over a 20-minute break for those in the room, and the webcast will start again in just over 20 minutes. Thank you very much.
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Let's start again then. We're just running 2 minutes late, which is pretty good, I think. We're going to change tack a little bit now, and I'd like to welcome Hanneke Faber, who is President of our Foods & Refreshment business, to come and talk about health, wellbeing, and nutrition. Thank you, Hanneke.
Thanks, Richard. It's great to be here. You've seen many of our experts, many of our functional leaders earlier on. It's great to be here to talk a little bit about how our sustainability strategy comes to life in our Foods & Refreshment business. We do not have a business strategy and a sustainability strategy. They really are the same thing. Hopefully, you'll see that coming out. A few things that I'd like to talk to you about today. First of all, just a little bit of background about the market. Foods is a large and growing market with immense opportunities to be a force for good, which is our strategy. Second, I'd like to talk to you how we will win in that market, and we'll do that by really shifting our portfolio, our innovation, and our brands to boldly healthier spaces.
A bit of background. This is an exciting market. It's large and growing. About EUR 2.5 trillion worth of foods and drinks are being sold every year, growing at about a 4% CAGR, and we expect that to continue because the world has to feed almost 10 billion people by 2050. I think the other exciting thing is food is sexier than ever. Hundreds of millions of pictures being posted on social media every day. When my 15-year-old and I and the rest of our family have dinner and I start eating, she stops me because Instagram eats first. Yeah. Food is so sexy. Beauty used to be the sexy place. I think food is the sexy place to be now. This category also has significant challenges.
Obesity and malnutrition, about 800 million people in the world who are hungry, and 1 billion who are obese, about 2 billion who are actually overweight. As a foods industry, we have a real responsibility there. Climate crisis, we talked about in droves, 25% of global greenhouse gas output comes from the foods industry, that's mainly cows ruminating methane, deforestation, which also links to cows, you need all that soy to feed the cows. We're a big player in the climate crisis. Finally, waste. We got to feed almost 10 billion people, we're wasting a third of all food today. That is all the way along the value chain from the farm to the consumer's home. At Unilever, our Foods & Refreshment business, we believe, has a great foundation to drive positive change. We have compelling scale.
Rebecca talked about scale. We're about a EUR 20 billion business. We're growing. Almost 50% of that business is in emerging markets. It's a really good split between the developed and the developing world. We just opened our new headquarters on the campus of the University of Wageningen in the Netherlands last Friday, with the King of the Netherlands, and that is really the Silicon Valley of foods. Wageningen, in every survey you'll look at for agricultural and food science university, is the number one, ahead of places like UC Davis in the U.S. and the big Chinese universities. It's a fantastic ecosystem to be in. We're there with professors, with students, with scale-ups, with startups, with other corporates, and we really believe that's going to pick up the pace of innovation to address some of these big challenges. We have a strong brand portfolio and categories.
We're the number one in ice cream, number one in mayonnaise, number one in scratch cooking, which are stocks and bouillons, number one in tea around the world, and we have seven really large brands that have enormous reach. Seven brands that are over a billion or almost a billion, from Knorr to Wall's to Lipton, all the way to Ben & Jerry's and Bertolli. Those are really big brands. We also have a really exciting set of more recently acquired brands. Brands like Pukka, like The Vegetarian Butcher. We'll talk a bit more about those. They're growing at about three times the pace of our big brands. They need to. That's why we bought them, they're also really purposeful. We'll come back to those. Here's our strategy. Again, this is our business strategy and our sustainability strategy. They are not different things.
They are the same things. Our ambition is to help our food and our people taste good, feel good, and be a force for good. When I say force for good, I mean more force and more good. That's what we need in the business. More force in terms of faster growth and more good to address some of these big challenges where the foods industry really has an important role to play. We'll do that by making three choices in terms of being boldly healthier. A portfolio shift to boldly healthier spaces, boldly healthier innovation, and we like to talk about all of our brands as being movements. That's the same thing as purposeful brands, but they got to turn into activist movements. That strategy is very much built with the SDGs in mind. There are six SDGs that this strategy is inspired by.
Of course, zero hunger, of course good health and wellbeing, also responsible consumption, climate action, life below water, and partnerships. I cannot emphasize enough how important that is. Rebecca also talked about that. Let's talk about all three a little bit. Let's start from the portfolio shift. We got to grow faster by shifting our portfolio to tailwinds. That's what we call them. Tailwinds can be in many spaces. Channels is the first one. About 60% of our business today is in traditional retail, supermarkets. 40% is in out of home. Out of home is growing a lot faster than traditional retail. Shifting our business to out of home, to restaurants, to workplaces, to convenience is really important.
Doing that on top through e-commerce. In the last couple of years, we built an almost EUR 100 million ice cream business with what we call Ice Cream Now, which is delivery.com. With Uber Eats, with Deliveroo, with Dingdong Fresh in China, because on your couch at 9:00 p.m. it is always summer, and you can get your ice cream delivered that way. Shifting to these growing channels is a first tailwind shift. Second is categories. Some of our categories are growing a lot faster than others, so shifting to those is another key strategic impetus for us. Impulse and premium ice cream, scratch cooking, people want to cook from scratch again, which is great, and we can help them do that.
Herbal and green tea as opposed to black tea, and finally, snacking, also a huge growth space both in frozen snacks and other healthy snacks. Emerging spaces, two really important. One, plant-based, of course, a huge thrust for us. I'll talk about it. Personalized wellness. This is DNA-based eating. It's in its infancy. No one's really cracked it, but we do believe this space will be a big growth space for the future where you can really eat healthier just for you in a personalized way. Finally, of course, geography, again, an important shift. We'd like to have a bit more of our business in emerging markets. Our other two Unilever businesses have a much larger part of their business in emerging markets, so shifting there will be important as well. An example of tailwinds. The Vegetarian Butcher. This is an acquisition we did earlier this year.
It's a small brand in the Netherlands. It was founded by Jaap Korteweg. He's on the slide here. Jaap is a ninth-generation farmer. Jaap, in the late 1990s, had an epiphany. There was a What's it called? The pig disease, swine flu. There was swine flu in the Netherlands, and Jaap was asked to store 15,000 dead pigs in his cold storage on his farm. He did it, but he became an overnight vegetarian. Unfortunately, he loves meat, so he started this small company to make fake meat back in the late '90s. He's built it into a lovely little business. He's the market leader in the Netherlands. He did do a little bit of export. It's not just burgers, but he also does What The Cluck chicken, Magic Mince, Unbelievaballs, you name it. A very large range of fabulous meat replacements.
We acquired The Vegetarian Butcher in January, really with the idea of combining this beautiful plant-based brand and Unilever's might in terms of global presence and distribution. We're pretty excited because as early as August, we signed a partnership with Burger King to bring The Vegetarian Butcher as their burger, their Whopper, into 26 markets in Europe. This is, I think, a great example where a tailwind, plant-based, an acquisition, and Unilever's strengths come together. Got a little video to give you a bit more background on that.
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Yeah, I'll just show you the Burger King ad because it hasn't come out in the U.K. yet. In a few weeks, this will be live here as well.
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That's live now. It went live in most markets mid-November, and it's going really well. This kind of brings all things together, plant-based, acquisition, out of home, all the tailwinds that we believe can grow our business faster. Plant-based is a focus area for us across our portfolio. It is not just The Vegetarian Butcher. We've been investing in R&D significantly from 2013. Replacing dairy, of course, we're a big dairy business as well, and meat is hard. It's hard to get products that are as creamy as real dairy or as juicy as real meat. We got a large R&D contingence on that, and we're proud to say that FAIRR Investor Network ranked us number one of all the big companies in terms of being ready for the protein transition. We see that with consumers as well.
We've launched a whole bunch of things really over the last couple of years that don't use cows, basically. Ben & Jerry's non-dairy, Magnum Vegan, Hellmann's vegan mayonnaise, all won prizes, including from PETA, which Alan mentioned. Just recently, Knorr Meal Makers really helping people eat more vegetables. Just this week, won a big award for best vegan product in Germany from Your Healthy Living. Again, not just The Vegetarian Butcher. Across our brands, plant-based is a big focus and a big R&D focus for us. Let's talk about boldly healthier innovation across the portfolio. First of all, the basics. Our products have to be nutritious. We've set what we call highest nutritional standards, which are inspired by the WHO's dietary guidelines, but adapted to our categories. What do those mean in our categories?
As late as 2013, only 31% of our products adhere to our own highest nutritional standards. By the way, those are all about things like salt, sugar categories, and trans fats. Next year, we'll be at 60%. I am determined to get this much closer to 100% in the not so distant future, because this is just really important given the scale and reach that we have. We're already doing quite well. We're rated number two by ATNI in terms of access to nutrition. This is okay, but we got to make faster progress here. These are the basics, just offering good nutritional products. Here you see some of the progress that we've made. Less salt, really important. Two-thirds of our products now help you get less than 5 grams a day. Less sugar, super important. Things like Lipton Ice Tea, where we've recently reduced sugar by 20%.
Less calories. On that one, we've done really well. All of our kids' ice cream is now under 110 calories. Also, for your knowledge, all of our adult ice cream, including those delicious Magnums, are under 250. Those are truly a responsible snack. Don't eat five a day, but one is just fine. Beyond those basics, what's really important is that we also offer positive nutrition. That means step changing to fight stunting and other diseases caused by just lack of nutrients around the world. We do that by targeted nutrition and fortification. For example, by adding iron to our products. It's really sad. 100% of women around the world, not just in developing markets, has iron deficiency. Adding iron to products can actually really help. 50% of people around the world has iodine deficiency.
When you're a woman who has a baby and you have iodine deficiency, the IQ of the baby is 10 points lower. These are things that we can relatively easily add to our products. It was one of the reasons we bought Horlicks, with the acquisitions about to close early in next year. Again, because it adds fortified ingredients, vitamins to products to just not allow that kind of stunting to happen. We run big campaigns across many markets. Just let me show you Indonesia and Knorr. Again, our bouillons reach so many households, more than 3 billion usage occasions a year. Fortification there really makes a difference. Again, not just the developing world issue. I'd say that the issue in the developed world is none of us eat enough vegetables, and therefore we are actually also malnourished.
I just looked up the numbers from the Netherlands. You're supposed to have five servings of fruits and veg. The average is like one point four. That is way too little. We can play a real role there. I love this example. These are Dutch Knorr Meal Makers. We sell 50 million of these a year. This is how the Dutch cook, basically. 10 years ago, the recipes on the back of this, again, the Dutch follow instructions well, they all use these recipes, had you use 60 grams of vegetables a person to make this. Today, it's more than 200 grams of veg. This is encouraging veg by stealth. It really works in terms of getting people to eat more vegetables. Now we don't just need to eat more vegetables, we also need to eat more diverse vegetables.
The world really eats only 12 crops, and really altogether, we only eat three crops. 60% of all our calories come from corn, rice, and wheat. Diversification is good for our health, but also very much for the health of the soil. Knorr's Future 50 program encourages that, and then we do lots of work on inspiring people to just eat more and more differentiated veg. One more video of that. Hold on. Let's just do that one again so you hear it from the start, if we could.
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Again, that's a live campaign from the Netherlands. The final piece is Every Brand a Movement in our portfolio. We're lucky in that in our portfolio, I would say in Foods & Refreshment, we have some of our most purposeful brands in Unilever. These are just a couple of pictures from the last few months. On your left, you see Ben & Jerry's. That's our store here in London on the day of the climate strikes. The employees of the store by themselves decided that they'd close up shop that day. They put that sign in the window. It wasn't great for sales, but I love it that our people are so activist, and the coverage that came from it more than made up for one day of lost sales. That's a great example of really bottom-up, employee-driven Every Brand a Movement.
On the right side, you see Tim Westwell. He's one of the co-founders of Pukka, which is a more recent acquisition. In September, we launched Pukka Peace, which is a new herbal tea for that brand. To celebrate the launch, Tim went on a peace strike in Covent Garden for a number of days. Again, just great inspiration for brands that are truly movements and believe in something, stand for something, on top of course, delivering fantastic products. There is no ice cream more delicious than Ben & Jerry's. If you haven't tried Pukka, oh boy, there is no tea that's better. It's not just our small brands. Pukka definitely is one of our smaller brands. It is also our big brands.
What I'd like to do is actually end up here with showing you a number of our big brands and how they are bringing purpose to life. Hellmann's is all about fighting food waste, and mayonnaise is a great way to fight food waste. Brooke Bond in India, which is by far the market leader in tea in India, is all about tolerance and inclusivity. Finally, this is a really new piece from Joko, the market leader in tea in South Africa, on tolerance and inclusivity as well, but very much about fighting violence against women, which is a huge issue in South Africa. I'll show you the three ads that are on air in Brazil, India, and in South Africa. I hope that gave you a little bit of a sense of our strategy, both our business and our sustainability strategy.
Hopefully you'll walk out with me to see that food is a really large and growing market, sexier than ever, huge opportunities to be a force for good, and the ways we win really is shifting to boldly healthier spaces. That in the end is what the consumer wants as well. Thank you, and I think we have time for a couple of questions if there are any. If there are none, that's all right as well. Yes.
I'm not sure if this is within the context, but you say the industry's growing four, you're growing two and a half. How do you bridge that gap?
Yeah. This is exactly how we bridge the gap. We're not happy about that.
Yeah. The building blocks that get you there, just run us through and the timeframe that you'd expect.
It's shifting our portfolio. We're still playing in too many spaces that aren't growing fast enough. You saw it there, the right channels, the right categories, the right spaces, and the right geographies. We are in faster-growing spaces. We need to shift more of our portfolio there. That's definitely the first one. Second is to be boldly healthier. Too much of our portfolio is not healthy enough yet. Again, we'll focus on that. The final one is really having our brand stand out with work like this. We see when we do work like this, all of which is fairly recent, we grow faster. Yes.
What is the advantage and the limits of being a B Corp? Some of your brands are B Corps.
Yeah. We're really supportive of our brands being B Corps, and most of those were acquired brands that were already B Corps. They tend to be more purposeful brands. We have decided as a company, maybe Graeme can comment on this, not to pursue being a B Corp as total Unilever, but it's great to have a number of brands in our portfolio like Pukka who are. Do you want to add anything there, Graeme?
No. Yes, we've been engaged in a very active dialogue with the B Corp people for quite some time now about whether it's possible for a very large company to make the step to be a B Corporation. We don't believe it is. We believe that our sustainable living strategy and the integration of that in totality into the Compass is sufficient and it's distinctive. Whilst we maintain a dialogue with them, right now we're comfortable that a number of our smaller brands and independent brands are B Corporations, but we've not found an unlock yet that would take Unilever all the way to being a B Corporation.
Thank you. If nothing else, great. I'm going to hand over to Alan. Thank you.
Thank you, Hanneke.
You're welcome.
Well done.
Well, I am absolutely delighted that Matthew Rycroft, who is the permanent secretary at the U.K.'s Department for International Development, or more easily known as DFID, has agreed to join us today as guest speaker, especially Matthew today. I'm sure you and your department have got many things on your mind other than supporting Unilever, we really appreciate it. DFID is the U.K. government's department that's responsible for overseas aid and develop, and leads the work of the U.K. to achieve the Sustainable Development Goals. DFID works closely with Unilever and other businesses, recognizing the need for a multi-stakeholder approach. Listen up, Sustainable Development Goals, multi-stakeholder approach. Do you see some alignment between some of DFID's principles and some of the things Unilever believes in? We're very proud of the long-standing relationship that we have with DFID.
We've done quite a lot of joint advocacy on issues like deforestation, women's empowerment, climate change. The Joko film that you just saw, fighting domestic abuse of women in South Africa, resulted in an immediate uplift in sales. It was such a resonant subject matter. DFID and Unilever are working on various programs together, including one called Transform, which is a GBP 40 million public-private partnership. It aims to improve the lives of 100 million low-income people by 2020, next year. To date, Transform has supported over 45 innovative projects in 11 countries, reaching half a million people, scaling rapidly.
Matthew himself has had a glittering diplomatic career, including in reverse order, being the British Permanent Representative to the United Nations from 2015 to 2018, being Chief Operating Officer of the Foreign and Commonwealth Office, serving as British Ambassador to Bosnia and Herzegovina, and prior to that, various roles in the U.K., Geneva, Washington, D.C. Matthew's going to speak for a few minutes about business and the increasing emergence of sustainable finance, and then is going to throw it open for questions. I'm going to let Matthew talk about the boundaries of what he can talk about, given that we're in what we would call a closed period, what the government might call purdah. Thanks, Matthew, and over to you. Matthew Rycroft.
Thank you very much, Alan. Thank you. Thank you very much to Alan for that great introduction, and very warm, and great to meet you all. I thought I might begin by going back a bit to when I was the British ambassador to the UN. As Alan said, I started that job in 2015, which was the year that the Sustainable Development Goals were decided. That was because it was 15 years after the year 2000, and the Millennium Development Goals that had been agreed in that year had sort of come to their end. They hadn't all been met. Very significant progress had been made. Broadly speaking, the level of people living in extreme poverty had halved over that period of time, which was a really outstanding achievement.
As we collectively looked at the challenge for international development and our mission to end poverty, we realized that we needed to broaden out. The Sustainable Development Goals do two things. They first of all, seek to complete the work of the Millennium Development Goals, really targeting extreme poverty, helping the poorest countries through the provision of services that those countries cannot afford to pay for themselves, like education and health and so on. Secondly, and this is the innovative, sustainable bit, is really thinking not so much about the symptoms of poverty, but about the underlying causes. When you think about those, you very quickly get into the agenda that Hanneke has just been talking about sustainability, about the impact of climate change, about the need to look after our oceans, our forests, thinking about our cities, and all of that sort of stuff.
Thinking about other causes of poverty, like conflict or corruption and poor governance. A much broader definition of the sorts of things which the international development sector is now involved in. For those of you who know them, I think you would agree too, that the Sustainable Development Goals are brilliant, but they are a little bit complicated. There are 17 of them, underpinned by 169 targets. The clue to remembering them is not to worry about those, but to think about the five Ps that summarize what they're about. The five Ps are, first of all, people. This is really all about the poorest people in the world. Despite the progress that I mentioned, there are still over 700 million people, about 10% of the world population, living in extreme poverty, on less than $1.90 a day.
Planet, all the stuff that Hanneke was talking about. Even if we do a brilliant job looking after those people, it wouldn't be a lot of good if the planet is no longer inhabitable. Even on current projections, I think by, is it by 2030? If not by 2050, 100 million extra people are going to be living in extreme poverty because of the impact of climate change. That's a very significant reversal. If you look at the graphs over the last decades, as I was saying earlier, the pace of change has been very dramatic at reducing the level of extreme poverty. That is leveling off, and if we're not careful, it's going to go back up again in the not-too-distant future because of the issues related to the planet. The third P is about peace. We cannot do all of this if there is conflict.
If you're a country that is trying to get out of poverty, the worst thing to do is to be in a war, either with yourself or with a neighbor. Very strong correlation between countries in conflict and fragile, and those who are unable to get out of poverty. The next P is about prosperity, growing countries out of poverty. A lot of the work that Alan just described between DFID and Unilever is really infused with that spirit. That it's not just about giving people aid. In fact, we want to do as little of that as possible. It's helping countries grow themselves out of poverty through investments, through jobs, I'll say a bit more about that in a moment, and allowing them to stand on their own two feet. After people, planet, peace, prosperity, the fifth P is partnership.
That, too, is where I think the DFID Unilever story is so powerful because, if you like, we symbolize a bit of the public sector and a bit of the private sector coming together with very different starting points, very different missions, but actually converging on a very compelling set of joint actions. Knowing from our side that we cannot achieve those goals unless we find a way of bringing businesses into the picture. Let me just say a little bit about how we try to build that partnership, to deliver that P, and then open things up into a conversation. When you look at those goals and project out to 2030 and try and work out how much money is needed in terms of investment, it comes to $2.5 trillion per year.
Even if every country that's a developed country were to be as generous as the U.K. and to meet the 0.7% of GNI commitment every year, even if that were to happen, that would still only add up to about 10% of that number. You can tell, can't you, that it's not going to be about international development. This is about private sector investment, about host governments, however poor they are, doing their bit through tax collection and so on. It's about remittances from diaspora. It's about the big philanthropists like the Gates Foundation. It's everyone coming together to play their part in order to close the financing gap.
Governments, of course, can help play a very significant role, not just with our own official development assistance, but with our activity more in the trade space, helping to create the sorts of environments that permit and facilitate and accelerate investment. In the end, this has got to be, in my view, private sector led. It's the private sector that will create the wealth that will allow that prosperity to lift people out of poverty in the poorest countries in the world. It's the mobilization of private capital that is going to be so crucial to this task, and yet at the moment, the opposite is happening. There's a net flow of capital out of the continent of Africa rather than into it at the moment. The picture is not just bad, it's bad and getting worse.
We've got to act decisively to improve the climate for investment and impact investment. Here are a few things that we think need to happen in order to do that. First of all, we've got to get the policies in place. We've got to be able to help the, what I think of as the leading edge of the private sector, do this really well in ways that work, in ways that are good for the bottom line, good for the purpose that Hanneke was talking about, good for the customers, good for the shareholders, good for the staff who work here. That requires some form of objectivity. It's no good just being able to carry on with existing activity and say that, Oh, by the way, it's also helping with the Sustainable Development Goals. It's also helping to save the planet, or whatever.
This greenwashing, or there are other words for it, is not good enough. We've got to find a way of objectively measuring development impact as rigorously as all of you in this company and others would be used to measuring risk and return. That's a surprisingly difficult thing to do, but there are lots of initiatives out there trying to do that. In fact, if anything, there are probably too many. We now need to corral them into one and get a single framework for measuring exactly what counts as development impact for the private sector.
We've been working with organizations such as the World Benchmarking Alliance to do exactly that, and also to shine a spotlight and to help use the power of transparency to get a bit of a competition going amongst the leading companies in the private sector through benchmarking to see who's doing best in this area. The second thing that we need to do is to make sure that there is a pipeline of investable deals, of investable projects, in the sorts of countries, particularly Sub-Saharan Africa, where we need this step change in investment. DFID owns something called the CDC, which is our investment arm, and we've been roughly doubling the size of the CDC recently. It is seeking to create that spirit of de-risking, of entrepreneurship, of going in side by side with other parts of the private sector to give confidence to those co-investors.
Over the past three years, CDC have mobilized over $2 billion of private sector capital. Thirdly, after policies and pipelines, you can see there's a lot of Ps going on today, is products. We're working with the City of London to develop innovative financial products that can mobilize more capital for impactful businesses in developing countries. We launched last year the Green Growth Equity Fund, which is a joint U.K.-India fund designed to promote sustainable energy projects. India and the U.K. have invested over GBP 240 million of anchor capital into the fund, which is expected to raise up to GBP 500 million from institutional investors. That's just one example. The fourth thing that we need to do, the fourth P of this set of Ps, is about people and about making sure that in this country that we give our own people what they say they want.
We actually did a bit of market research ourselves earlier this year and discovered that seven in 10 of British savers and investors, those people who've got a pension or some sort of investment, would like that investment to do something good for the planet, for development, alongside making a return. I think that's a very good start for those companies like Unilever or others present here today who want to go with the flow of that phase of public opinion. That's why we're so passionate about this. Let me say a couple more things about the DFID and Unilever joint working. We, as Alan said, set up this Transform program, which works with social entrepreneurs to develop life-enhancing products and services that lead to sustained improvements in their health, in livelihoods, in environments, and the well-being of underserved communities.
We've reached over 1 million lives to date, we're planning to broaden it out to tackle also plastic waste, which is the scourge of the planet that David Attenborough was talking about, wasn't he, when he was here for an amazing award a few weeks ago. I was in Rwanda last month, looking at how another bit of your business is investing in tea in that part of the world, for reasons which I didn't quite understand, even after being told multiple times about it. Rwanda is perfect for growing really high-quality tea. I think it's a combination of the altitude and the soil and so on. Of course, there's a huge number of people in Rwanda and countries like it who do not have jobs. Anything that is labor-intensive, like plucking tea, absolutely perfect sort of win-win-win. It's good for the company.
It's good for the people. It's good for the development agency, in this case, the Department for International Development. Lots of fantastic work going on, but much more to do. The final thing I want to say before opening this up is that looking ahead after our election tomorrow, on the 20th of January, we are planning a UK-Africa Investment Summit, which we hope will involve many of the people in this room, as well as heads of state and government from the continent of Africa and the big multilateral institutions coming together to try to fix some of these problems that I have identified. I'd be delighted to hear your views now about what we should be doing then, or indeed, anything else that I've mentioned. Thank you very much. Who would like to kick off?
The thing that Alan was referring to was that we have this pre-election period going on, just for one more day, which means that, basically, I can't say anything very interesting. Sorry about that. Basically, I can talk about current policy. I can talk about what we have done in the past. Anything forward-looking, I could basically only say it if it's the sort of thing which any plausible government after our election would say. Just bear that in mind when you judge how interesting or boring my answers will be. Who wants to kick off? Even comments or questions? Anything for the Africa investment summit? Yes, please.
Thank you very much for this. I'll project. Hope that helps. You're probably aware that institutional investors are, we are obviously doing what we do on behalf of a huge swath of end investors, beneficiaries, lots of various pension schemes, people you talked about. I'm going to refer back to something which came up earlier in this conversation. You didn't hear. A lot of the research tends to suggest that Baby Boomers basically are prepared to say they actually don't care about sustainability, not prepared to put their money into it. Generation X say they care about it. They don't actually do anything about it. Millennials care about it. They are prepared to do something about it if basically the conditions are right, it doesn't cost too much, it's not too inconvenient.
It's Gen Z who are the ones who are prepared to say, Well, look, we're going to put our money into this regardless. What that means for us in terms of the people we serve, is that obviously if we're serving them and trying to serve their interests and basically do what they are asking us to do, there's a potential challenge there in terms of actually this money that's out there being funneled into the sort of projects you want. Because if actually you think the majority of wealth is probably at the higher end of the baby boomer, Gen X end of that spectrum, how does government try to look at that and try to address that gap and really what techniques do you have for actually being able to do what you say you want to do?
It's a great question. I think the short answer is that we haven't cracked that. When you look at the popularity of development spending in the U.K., you can see that there's a very big gap. Probably it correlates in the sort of way that you have defined willingness of different generations to put their money into this sort of development impact. I guess the really big question is whether, as the Gen Z generation grow older, do their views shift to coincide with the views of older people now, or do they keep those views with them, then the whole population shifts generationally? I'm pretty sure on this set of issues, it's going to be the latter. Obviously, I don't have evidence for that. The reason I'm so sure is that, of course, something is happening externally. The world is changing.
Climate change is ever more present. When you just look at one other thing that the Department for International Development does, we do the humanitarian response whenever there's an emergency, whether it's an earthquake or a tsunami, whatever, or increasingly, a drought or a flood. When you look at the projections, tens of millions of extra people per year are going to be needing that sort of humanitarian assistance, and almost all of that extra bit is not conflict, bad though that is, it's actually climate. I think there's reason to be very worried about the world, but there's reason to be hopeful that as younger people get older, they will stick with this passion to invest in ways that help save the planet and do the rest of the SDGs. To directly answer your question, I think it has got to be a shared endeavor.
There are no easy fixes. I don't think government voices are going to be particularly influential, reaching audiences that haven't already been reached. There are some fantastic activists. There are great movements of people. Think of Richard Curtis, the filmmaker, who does a huge amount to really bring the SDGs to life. He and others have got behind this idea of a decade of delivery starting next year, so 2020 to 2030, given that the first five years of this 15-year period has not been good enough in terms of the pace of change. We've got to ramp things up. Everyone is going to have to come into this, and I think everyone's ideas are going to be welcome on how to do that. Do you want to go next?
Yes. How can the British government ensure that these funds that are appropriated? You're trying to collect all this money from the city and the Africa Summit, the India Summit, get to the right people or have an impact on the right people rather than getting stuck in corruption or bureaucracy?
That's a great question. When you look at the data that I have seen about views about international development, you can roughly divide the population into equal thirds, roughly one-third strongly support what's going on at the moment, roughly one-third are against it, and will sort of always be against it because it's abroad, and they don't think it should be spent. There's a middle third who are currently not massive fans of international development spending. They're persuadable, but they haven't yet been persuaded. The reasons they haven't been persuadable are firstly that they worry that too much of the development assistance ends up in the wrong places through corruption.
The second reason is also interesting, which is that they think that the scale of the problems in the world are just so big that even if we were really generous, we wouldn't be able to solve those problems, that all we could do is a drop in the ocean compared to the scale of the challenge. On that, I think on both of those things, there's work that can be done. On that second issue, there is a lot more that can be done just in terms of framing the progress that's been made. It is really significant how much progress has been made, not just on the poverty rates that I was talking about earlier, which is absolutely dramatic when you look at the graphs. Fewer people in extreme poverty and way more people out of poverty than ever before.
That's a really significant achievement of the last generation or so. People don't know that story. People don't know about all of the diseases that have been eradicated or contained. They only hear about the one that's just had the outbreak. There's a whole sort of mindset shift that needs to go along with better evidence out there for everyone about the true state of the world. Now, on the corruption, there's all sorts of things that we can do. None of it is perfect. There is always a risk. I think if you seek to make the biggest impact, you need to have quite a high-risk appetite, quite a high threshold, and accept that there are some things that you do that will not work. You've got to be a bit entrepreneurial.
I would argue more entrepreneurial than we are about what we do, accepting that certain things will fail. Of course, we cannot condone corruption. We cannot do anything that we know is going to lead to money on one particular project not ending up where it should. Taken across the whole portfolio, I think we've got to be sensible and realistic about how much, just accepting that this is the sort of environment that we're operating in, where it'll be very difficult to account for everything.
The other thing that we can do, which we do a lot of, is helping countries, particularly as they get that little bit up the league table, helping them build up their own institutions so that they can do the drive against corruption, so that they can be in charge of their own destiny, including on your point about transparency and so on. It's a really tough thing to do, but I feel like we're in the foothills, but we're moving in the right direction. Someone over here? Yeah.
Thanks. Yeah. I think all the main parties have got some kind of net zero target, so hopefully you can talk about this.
Yeah.
How could the U.K. government broaden its net zero ambitions out to more countries globally? How might that involve multinational companies like Unilever?
Great question. I think you're right. Yes, I think all the main parties have net zero targets, some of them earlier than 2050. When you look at the implementation plan, even for 2050, it's a tough ask. There is a huge amount that needs to be done every year between now and 2050 to meet the 2050 target. I'm talking about domestically, in this country, in particular in relation to transport, housing, energy production, and land use. I think those are the four biggest. All of those sectors need transformations in order to meet net zero by 2050. Having led the way in terms of a major economy with this target, we have got to achieve that domestically, and we've got to use that domestic ambition, that domestic delivery, to argue for ambition overseas.
I think our biggest opportunity in the coming year will be COP26, exactly a year from now. We've got COP25 going on at the moment in Madrid. COP26 will be in Glasgow. That is the moment, five years on from the Paris Agreement, where every single country that signed that agreement is supposed to come back saying, What is our nationally determined contribution going to be to cutting emissions to meet the 2050 target? We will be using our convening role, whoever we is in terms of the government, to get as high an ambition as possible for COP26. Like I was saying earlier, that's got to be a cross-sector we. That's not just the government. That's got to be all of us.
I think Unilever are going to have a very significant role to play in preparation for COP26, coming together as part of a cross-sector coalition for ambition for the reasons that you've just been talking about. I think we've got time for a couple more quick. Should we just do two together?
Yeah, I had a question regarding your comment around greenwashing, and it could be regarding the SDGs or some of the other markets. I guess I wonder, in your efforts to steer capital to development, how orthodox are you around those expectations? I say that because no one wants to see bad behavior or particularly asset managers game it. I wonder, because these markets are so new and the taxonomies and definitions, there's no universal kind of approach. Do you have to become pragmatic in one sense and accept some degree of noise and disagreement in what you mean by this? A great example is the BOE's talked about green securitization and solving for the just transition and the low carbon transition.
In that process, do you have to accept a lot of noise and potentially sort of differing opinions in what that means from a greenwashing perspective to get markets going upon which then you make the standards more rigorous over time?
Yes. That's a great point. As I alluded to earlier, there is a plethora of initiatives going on at the moment to try to create frameworks within which the whole of different sectors could operate. I hope that we can create a single framework which will help. I suspect it'll take quite a long time to get there. In the meantime, I definitely don't want anything I said to be read as thinking that we want to sort of hold back the most innovative or the most ambitious. Yeah, I absolutely think that we're in for a period where it's quite confusing for a bit. There will be some market setters who will be ahead of the curve. There'll be others who'll be seeking to sort of water things down, I imagine.
In the end, I would hope that the private sector yourselves will come up with the best possible solutions to this in ways that will really resonate, not just with your shareholders, with your customers, but also with people who work here. There's a very fierce looking clock counting down. How strictly am I supposed to stick with that? Shall we just do one more quick final question? Do you want to go now?
I just wanted to ask, in your conversations with the private sector, what challenges do you face? What pushbacks do you get when talking about trying to achieve the SDGs? Is it timeline? Is it cost? What do you find are the big issues that you have to overcome?
It definitely varies depending on which sector, what sort of company, and what sort of geography. The really big things that come out for me are, well, absolutely the things that you've mentioned, but also even the ones who really want to try to invest in some of these developing markets, either there's an absence of regulation or some other barrier to entry. The ease of doing business is extremely difficult in some places. Corruption that you were talking about earlier, all of these things get in the way. The other thing, different sort of problem, is just the fact that the whole of the SDG framework is quite confusing. I think even companies that want to do the right thing find it hard to know what is the really best single thing that they could do? It's a really challenging environment, I think.
I think that is perhaps an area where we on the government and the multilateral institution side might be able to do a bit of a better job to try and work out what would be the really compelling interventions that would have multiple impact across a range of these Goals. Thank you very much.
Matthew, thank you very much indeed for coming in, especially on the day before a general election, to share your thoughts on DFID, on development, on the SDGs. You have done absolutely amazing work in DFID. We continue to be proud to partner with you. As a farewell gift, we would like just to give you our best wishes that you receive a government that continues to care about development, about the SDGs, and about the long-term future of the world, because it really matters. Ladies and gentlemen, Matthew Rycroft, thank you very much.
Thank you very much. I also want to give you a book.
I'll see you G.P., you're up.
Okay.
Now it's all gone quiet.
I thought that was absolutely brilliant. I thought it was really great of Matthew to do it, particularly today. I got excited. The five Ps, that's the simplest expression of the SDGs I've ever heard. He upped the ante, and he went to nine Ps that I counted. He introduced a 10th, which is plausible government. I thought, good luck. Let's see how that goes. Look, I'm going to talk a little bit, just for 15 minutes maybe, about the sort of CFO view in all this. I'm Graeme. I'm Unilever CFO. I recognize a few of you. A lot of the buy side have just left the building because they usually run out whenever I start talking. Anyway, let me talk a little bit about how we think about sustainability when we make business decisions in Unilever. You've seen this chart before.
I think it was either Alan or Rebecca that popped it up. It is fundamentally, and has been for quite a long time in our sort of framework of thinking about the business, around this question of growth, and we get excited about growth, and that's why it gets the biggest area on this chart, cost, risk, and trust. I'll give you just a couple of specific examples. Let's take plastic reduction or sustainable palm oil ecosystem. Richard's talked about plastic quite a lot. Mark spoke a lot of the challenges of a sustainable palm oil system. I'm often asked whether our commitments to using recycled plastic or sustainable palm oil come with additional costs. It's become quite a theme, actually, these days, by the buy side in particular, and now even a little bit by the sell side, which I think is very encouraging.
It's really encouraging that I'm getting asked these questions. It's a simple answer to them, that these are simply investments behind product innovation and consumer preference. I hope Hanneke's presentation, in particular, gives you a sense that we believe that we need to invest in these things because our consumers, particularly Gen Z consumers, but our consumers will care about it. Therefore, these are essential investments from the point of view of the CFO, who thinks a lot about capital allocation and value creation in our business. We have to make these investments to ensure that we remain relevant to our consumers, and that we provide the products that they want to buy, and that therefore, we're able to drive our growth. Now, they do come with an upfront cost and maybe an ongoing cost, but they do pay back later through greater consumer preference.
They drive your competitiveness. Hence, you get growth through either more volume or through higher prices. They very much show up in the growth element of the matrix. From my perspective, as the CFO, I think Unilever's in a particularly good place right now to make these investments. It won't have escaped many of your notice that we've been on a journey to balance out top line growth and margin delivery in the company since 2016. We've already increased our operating margin by over 300 basis points. We will achieve the objectives of our 2020 plan next year, sometime in 2020, but we're largely done already.
Therefore, as I said at our Capital Markets Day, we have got a base from which further growth and growth acceleration, we acknowledge that we are 70 to 100 basis points light of the growth we'd like to see at the moment, but we're still growing at a pretty healthy clip. We have a value creation model that allows us to generate a lot of value off that basis, even more so if you're sitting on a nice healthy margin, an appropriate margin. It's important, in thinking about that, to think about the cost savings journey that we've been on as a business. We've stepped up our level of savings delivery to about EUR 2 billion a year.
We foresee through the very strong underlying programs we've got there, ZBB 5S, our change program, the restructuring investments we're making, that we can continue at that clip of cost savings going forward. It's very important, and Alan and myself and the rest of the ULE see a big opportunity here. You know that many people join Unilever because of the way in which we think about our business and the way in which we run our business.
We have a tremendous opportunity with the higher margin in the business to drive the enthusiasm of the cost savings and productivity journey in the business, the benefits we get from the technology curve that, if you do it right, can throw off tremendous benefits of your business and generate the fuel to make the investments back in the company in plastics and sustainable palm oil, et cetera, all the other things that we need to do. These are big investments, but we need to energize this company behind our mission of making those investments. In order to do that, we have to continue to generate the fuel to do that. We're coming, as I said, from a good position because we've got our margin in good shape. We're positioned well.
If you looked at what we said about our value creation model at our Capital Markets Day, we're primed for great value creation, and we will be able to fund these investments, we think, through that enthusiasm that we generate in the company for productivity savings going forward. Take another one. That's plastics and other things as I think about it. If you think about the ambition to be carbon positive by 2030, Marc mentioned it earlier, but for quite a while now, since 2016, we've been charging ourselves at an internal carbon price of about EUR 40 on all of our business. Each of our three divisions gets hit with a haircut in their capital allocation every year. We just take that, and we bang it into a clean energy fund.
To date, we've done about GBP 75 million to GBP 80 million of capital reallocation in the business since 2016 by doing just that. It seems like a bit of a sledgehammer intervention, but it's really quite cool because I know that their capital budgets are all pitching for too much energy. This is an authorized and logical haircut that comes in our capital allocation. We fund the clean energy projects, and that means that Marc has had the ability to get out through the clean tech fund and make the investments. I'll give you a couple of examples. It's normal stuff. It's biomass boilers in the Tema factory in Ghana, and it's solar thermal, actually, for hot water generation in our factory at Cuernavaca in Mexico. There's many examples of that, and that's how we've been able to do that.
Thinking about measuring progress, it's a brainache of a chart, this. It was interesting to hear Matthew talk about the SDGs, 17 of them, 150 odd, 160 odd metrics behind it. We did almost the same with the Unilever Sustainable Living Plan. We had 9 pillars within the USLP, and we've got 70 metrics, and we report upon those annually, and they're all available on our website. Just to illustrate the sort of figure of it and the progress, these are the 9 pillar metrics. With all measurement of performance and setting of targets, and this is when it gets core CFO material, you have a mixture of good and bad performance, but overall good progress against the goals that we set. To be honest with you, when I became the CFO back in 2015, I got a little bit worried about this.
It's a discussion that myself and my predecessor had about all the targets we had put out there because your natural instinct as a CFO is to promise what you can deliver, and you expect to be held accountable to a very high degree for delivery of what you say. That's especially true on the financial side. I've been positively surprised by this, particularly where we've come up short, and I'll talk about a couple of those in a minute. I would have been very positively surprised at the way people support transparency in this space. People would rather see you being very transparent and very ambitious in what it is that you want to do and then come up short than sit there sort of managing the message in this space.
I've been really surprised personally at the level of deep understanding and support there is out there if you're prepared to, as Richard said, lead in these things and take on the risk. There's a couple of examples here of great progress. You see there, I think we circled it. Yeah. That 1.24 billion people improving their health and hygiene, as I think Rebecca said, the incidence of life-threatening diseases like diarrhea, it's just a simple fix. Through a brand like Lifebuoy, we've really been able to save lives there, which is pretty fantastic. We made great, and this is one that is both risk and cost, quite appealing for a CFO.
We reduced our waste per ton that we take to landfill, or we have to dispose of by 97% in the 10 years since 2008 because we sort of got it down to that level back in about 2018. We've done that despite significantly higher volumes. We continue to make really great progress there. In other areas, we have had slower progress, and that's what I was mentioning earlier. Take a reduction of only 2% in our water impact per consumer use. The original target there, if you were sharp-eyed in the original USLP from back in 2010, was to half our environmental impact per consumer use. What we found is it's very difficult and probably beyond our means to really influence consumer behavior in that way.
As that energy becomes clean energy within the system itself, that's where the big impact on that will sit. I thought we would be in some hot water for having come up so short against a target. Everybody understands that influencing the totality of consumer behavior with people washing their clothes and taking showers, et cetera, and brushing their teeth is quite a hard thing to do. We have made, however, really significant reductions in the water that we do use in our operations. That's down by 44%. More CFO talk. This is just normal CFO logic. I'm asked an awful lot by other CFOs about how we do this. I'm spending time tomorrow at A4S on exactly this point, but it really is just normal. It's just day job stuff. You've got to make sure you get really clear definitions in place.
You've got to make sure that there is a clear owner for every metric, and that you have to make sure that your measurement adheres to those things. It's okay to come up short. It's not okay to keep changing, measure things. It's not okay, as it isn't okay with any form of reporting, to fiddle around with it. You need to be consistent. There's got to be rigor behind every metric. You've got to have comprehensive processes. We've got very big processes sitting behind these. Frankly, it matches what we do from a financial metric in reporting. You've got to have real integrity behind the numbers, and you met Lysanne earlier. She was on the discussion panel on climate, but she's the controller of Unilever. That's a really big job.
Lysanne makes the calls about what's right and what's wrong when it comes to all of our reporting in Unilever. It's something that I was taught early on when I was doing a similar job that sometimes it's not the CEO or the CFO who should make those calls. It should be made independently elsewhere in the business, and she has that responsibility for the whole of Unilever, and she has it when it comes to reporting these metrics as well. I mean, you saw earlier, there's really good governance on this. The Corporate Responsibility Committee and the Audit Committee are very deeply engaged. It's all externally assured by PwC on a sort of rotational basis. You heard from Rebecca, a very important point, I think, that reward at Unilever isn't based just on a financial performance.
It is based to the tune of 25% of all long-term reward is connected to progress against these sustainability targets. Like I said, work level two, just to be a sense, that's every manager in Unilever. That's 14,000 people, including Alan, myself, and everybody on the ULE. It's very deeply ingrained in it. The USLP originally was a 10-year plan. It started in 2010. It comes to a close next year. We're working on building new metrics within the new Compass. We've announced, Richard talked about our commitments on plastic. We've got new commitments coming out as part of the new Compass, we're navigating ourselves at the moment. It's complicated, we are going forward with a plan that is much more tightly integrated. It is just the strategy of Unilever. The new Compass is the strategy of Unilever. There is no separate plan, et cetera.
It's a bit simpler. It's bolder in its outlook. It's more focused. It is quite simply the strategy of the company. Assessing performance from the outside in, I think we've skirted around a couple of times today on the fact that there's a huge amount of effort out there. There's some very worthwhile, great bodies of work have taken place. We support many of these. In fact, back in 2015 when I came into this job, we had frankly signed up for all of them, and we continue to support all of them. You need to be choiceful in what you do, and some are more important than others. We all want to see sustainability become more integrated into the way that you, as investors, assess companies. You're very interested in it. You're very number-centric.
You're performance-focused, therefore, this industry of measures has built up, et cetera. It can be pretty overwhelming at the end of the day, you do tend to choose who you work with and go forward and do it. As an example, we just went through, I saw Anna, I don't know if she's still here, Anna Overton was here earlier from S&P. We've just been through S&P's new ESG evaluation. Oh, hi. How are you? Nice to see you. I have to say, it was a great process for us. You've done many of them. It's the first time we'd been through it. It was demanding. It was a fantastic dialogue. It was exactly what you'd expect from a ratings process. We got the highest, I don't know if it's highest score, it was quite high, wasn't it? Was it? 89 so far.
We put it out there for other people to beat it, by the way. It'd be really good if others would come and knock us off that perch. There is, frankly, a lack of standardization and a lack of comparability, and we're all finding our way through this. I'm a bit of evangelist for one in particular, and that's the TCFD. We mentioned it a couple of times today. I've sort of chipped in on a couple of points on it. Just a couple of words about it. I became a vice chair of it when it was set up four years ago, and I was in that moment where I realized that we'd been signed up for everything, and that no way we were going to be able to support everything.
I really felt we were crying out for something that would sit above all the good work that had taken place. We worked very hard as a TCFD to create something that was a sort of unifying force that was accessible to everybody. I believe it is a tremendous unlocking platform for you to have that dialogue that you're looking for with companies. We talked earlier about scenario analysis. A lot of the questions you've asked today, I can show you in our report and accounts, we've only started thinking about how we continue the TCFD reporting. Believe me, I grew up as a Scottish accountant. For me, substance over form, TCFD had a lot of U.S. representation. For them, it's about form over substance. It's a combination of both. It's qualitative, quantitative in the annual report.
Bring it into the dialogue that you have with boards and bring it into the dialogue that you have with management teams all the time. Ask them question. If they can't answer the question, push them on why they can't answer the question. Above all. I know you probably know a lot about it, but this mix of qualitative and quantitative data, this narrative is really important. Lysanne mentioned earlier, you know all that Scope one through Scope three stuff that we've been putting in our filings for years and years and years? That was when the question was: what impact are you having on the climate? Now, we're in such a pickle that the question is: what's the impact of this impending climate change on you?
I think that Mark Carney was an absolute genius with that tragedy of the horizon, because it is literally tragedy of the horizon that we're facing now. You need to ask those questions of the companies that you're investing in. You need to understand what the risks are and what the opportunities are. I'd also encourage you to do it in a sector-specific way. This is about peer analysis. This is your bread and butter. Do I invest in this player in a sector or this player in a sector? This is about GSK versus Pfizer versus AstraZeneca. This is about BHP Billiton versus Rio Tinto. It's about Unilever versus Nestlé versus Procter. Don't try and go cross-sector with it. Get very sector specific.
It's all about I'm dying to hear when we finally get the discussion of Shell versus BP versus Exxon, how this thing plays through. I've said earlier, the scenario analysis that's in it is really important. The 2-degree scenario, the 4-degree scenario, that's what we chose to do. Either Marc or Lysanne, I think, mentioned the fact that we chose one commodity last year to do really deep econometric modeling on. We looked at yields, we looked at pricing impacts. Frankly, as Thomas said, climate change and the impact from a carbon perspective, we're not so carbon intensive in our actual operations itself, but the impact of a 2-degree world or a 4-degree world or 3.2-degree world is pretty striking.
Just thinking through those scenarios in this place was fantastic, and I think it's one of the best pieces in our annual report, and it will get bigger and bigger and bigger, and it's just a lovely place for you to start discussing. As Lysanne said, I think we're doing tea this year, and we'll get to palm oil, I think, at some point as well for a really deep dive. Just to say here, the TCFD, 921 companies have signed it. It's almost EUR 11 trillion of market cap. 450 financial firms, EUR 120 trillion in assets on the balance sheet, and a lot of that's banks because that's where you get the concentration of risk around this, of course.
Most of you have probably signed it, and really, somebody mentioned it earlier, this question of how long-term pension money suddenly flips to the short-term through the journey from asset owner to asset manager, that was 100% represented in TCFD, and I think that's a really big question that we need to lean into as we think about long-term implications versus short-term performance delivery. Final point on it, this pension point. We've got quite a big set of pension liabilities in Unilever, but we've got a big set of pension assets. We've got about GBP 21 billion of pension assets in the company, and just making sure that we are thinking about how we invest that money and the managers that we employ and how we think about long-term investment on it. That sort of squared the circle for us all the way through. I'm going to end there.
I'm just about out of time. Couple of messages for you. I'm delighted at the fact that we're finally reaching the tipping point. It's very clear to me that we've hit a tipping point just in the last year, 18 months. This ESG question has just skyrocketed. Second message for you is, this is just normal CFO stuff. It really lends itself. If you've got a good value creation model, you understand capital allocation, you've got a clear business strategy, you want to fund the business strategy. The only question you've got is long-term view versus short-term view. It's a pure horizon challenge, but it's not difficult to do, and it's not anything outside the ordinary.
Personally, I'm just looking forward to when that wall of money that I know you're all employed, because it's coming, that wall of ESG investment that can invest in certain sectors, can invest in our sector. When you invest in our sector, I want you to invest in our company, because I look forward to that reduction in our cost of capital, and I look forward to that wall of ESG money just coming our way. I'll leave it at that. Is there a question or done? I'll take a question, if you're kind. Nick.
One of the two key challenges, you talked a lot about climate change and not a lot about inequality. One of the key areas that corporates can help is by paying a fair amount of tax. Can you just talk us through what the OECD's proposals are?
Yeah
Now when it comes to consumer-facing corporations.
Your ability to link the questions you want to ask to sustainability has been absolutely remarkable this afternoon.
That is sustainability.
Magnificent.
That is a big piece of it.
First of all, we're doing a lot of thinking about this, obviously. I hope you're well appraised of the work that's happening at the OECD in response to what started out as digital taxation, got a fairly clever response from the U.S., extending it out to consumer-facing companies. This is a fundamental challenge, and long overdue. Actually, I was at the 100 Group last night, and there was a 100 Group response that went in that I really encourage you to read. Very thoughtful, and I agree 100% with their response to the OECD proposals. They're to be welcomed, there's no question. The world needs a different taxation system. In a world where there's sort of national aggression allied to this bizarre situation where companies are not paying tax, where their economic activity and benefit is existing, is a real problem. Couple of things about that, though.
You've got to avoid a situation where companies are taxed in two places. Companies are agnostic, really, about where they pay their tax. You don't want to pay it twice. How OECD can put together, which is a comprehensive that allows that to take place in a sensible way and make sure that the landscape for large countries and small countries is properly operating, I think is very, very important. We're supportive of the work and actually it's overdue. Just to share with you, Unilever's ETR is 26%, 27%, something like that, 26. That's an important driver of value. Actually, one reflection, not many people ask you about fiscal differences in your company, when in fact it can be a massive driver of long-term value differences between companies.
If you just took Unilever's operations around the world, where we make our profit, and multiplied it by the national rate of taxation, you would start with a number about 26%. What happens is, as the waterfall goes through, you get national friction. You get distribution taxes, you get unrecoverable costs, you get inability to charge appropriate amounts for brands and royalty fees, et cetera. That skyrockets up. That's the challenge for international companies, that you then have to work down to what your natural rate of tax is. That tends to happen through transfer pricing models. It tends to happen through financing models, et cetera. That's how that waterfall works. The key point is you kind of want to end up where you started.
If the OECD are able to make sure that where you start is where you finish, without having to go through that journey, I think that would be a terrific thing.
Would you go as far as to say that when the OECD are successful, Unilever will look relatively more attractive?
I believe so. Yes. Another reason I am quite excited about it. 26 seems like a pretty fair rate of taxation to me. I worry when companies have got sustainable rates that are material below that. I think the question is how you get there. You and I have had discussions in the past, and I do not know, I can put conjecture out there, but companies ought to pay their taxation. We pay, I think, I do not know if Janine's here, but EUR 3.7 billion a year, I think is our total tax contribution. That's worthwhile. That's a multi-stakeholder model.
Great.
Leave it? Cool.
Super note to end on. Thanks, Graeme. Let me not labor with my closing remarks. We're a bit over time. I want to get you out more or less on time. First of all, thank you very much, to those on the webcast who have invested the time, in particular to those of you who have bothered to come along this afternoon. It's a huge amount of your time you've given up. You know where we stand on the issue, and therefore it's very, very rewarding and reassuring for us to see such an engaged, and frankly, knowledgeable group of people coming along to get into this dialogue. I mean that sincerely when I say thanks for coming. Secondly, just to mention some of the things we've heard this afternoon.
I think you've heard quite compelling case on why we see sustainable business as better business. Rebecca took us through our core approach. You heard a panel talking about climate change, one of the big issues du jour. I think Richard gave a good explanation of how we're thinking about this plastic challenge and really accelerating the way that we're dealing with that. Hanneke talked about foods as a force for good, and we recognize that too much of our portfolio today is in a space that isn't as strong a force for good as Hanneke and our foods team would like. You heard DFID talking about one example of a partnership between the public and private sector. Trust me, that's real honest to goodness good work happening on the ground, helping people.
It's the government putting their hand in their pocket to help grow our business in some ways. Graeme gave you his inimitable CFO view of why this makes good economic sense. I hope along the way you felt a depth of expertise in Unilever. I think in this space, we do know what we're talking about. Our experts, like Karen, like Thomas, like Rebecca, are constantly called upon to talk to other industries, to talk to government bodies, to talk to coalitions about how you do sustainability as a private sector business. Actually, I got quite tickled hearing our controller talking with quite some authority and conviction about carbon footprint and climate change. To me, that's a really healthy sign that up and down the organization, maybe in unsuspecting places, we have pockets of real expertise.
Just to underscore the point on purpose versus profits, we've made our choice. We believe that purpose-led future fit is our only way to financial success. There might be other companies for which have got a different way to financial success. We believe that being purpose-led, future fit, run as a sustainable enterprise, that is our only choice on how to achieve financial success. As we draw in towards the end of the year, let me wish you and your families all the best for a happy and healthy holiday season. Also for a prosperous 2020, and maybe at this moment, I can put in a special plug for COP26 in Glasgow. Thank you very much, everybody.