Unilever Leads Food and Beverage Industry on Sustainability

Unilever helped found the Marine Stewardship Council and Roundtable on Sustainable Palm Oil, and was one of the early supporters of fair trade and nutritional labeling.

Over the years, its sustainability strategy has matured and efforts to reduce environmental impacts yielded increasingly impressive results.

All of these factors combined to put the London-based company at the top of the food and beverage sector in the latest Tomorrow’s Value Rating tool, which ranks the industry’s 10 largest public companies. It is the sixth industry to be examined by sustainability consultancy Two Tomorrows on how well it manages social and environmental issues, following oil and gas, information and communication technology and hotels, among others.

Unilever scored 64 points out of 100, well above the industry average of 46. Nestle (59 points) and Danone (58 points) followed behind in second and third place. PepsiCo and Coca-Cola rounded out the top five slots with 51 and 49 points, respectively.

1. Unilever (64/100)
2. Nestle (59)
3. Danone (58)
4. PepsiCo (51)
5. Coca-Cola (49)
6. Anheuser-Busch InBev (46)
7. Kraft (46)
8. Heineken (39)
9. Tyson (28)
10. Kirin Holdings Co. (23)

According to the evaluation, the sector is working to strengthen their supply chains, fueled by consumer demands over social and environmental issues, as well as their own concerns over the impacts from climate change and water scarcity. They also want to expand their reach into emerging markets, so they are experimenting with new products and distribution models that address difficult socio-economic issues and nutritional needs.

The study named Nestle as the leader for supply chain management, stemming from its practices of buying dairy, coffee and cocoa from more than 660,000 suppliers directly. This enables it to have greater influence over its supply chain, ensuring greater traceability. It also plays a large role in local initiatives focused on watershed protection, water access and improving farming practices.

Danone was spotlighted for its work with new business models, such as microfinance initiative in Bangladesh where locals were given small loans to buy cows whose milk would be sold to a newly built factory and made into fortified, low-priced yogurt. Some of the borrowers also buy the yogurt to sell locally door-to-door. Sales have soared and the company plans to build another factory to be based on this model.

Generally, the research found that food and beverage companies tend to lead on water efforts due the nature of the business, but other environmental issues, such as greenhouse gas emissions, are also top-of-mind, largely due to regulatory activity in 2009. Other major challenges to the industry include stakeholder engagement, chemical additives and waste.