Unilever exceeds sustainable sourcing milestone
Over one third of Unilever’s total supply chain is now sourced sustainably, following the success of the company’s Sustainable Living Plan launched in 2010. The company has exceeded its interim milestone of 30 percent to achieve an impressive 36 percent sustainable sourcing in its supply chain.
In a run up to the review of its Sustainable Living Plan, Unilever has highlighted the range of initiatives that it has used to combat a number of the future environmental risks that could impact businesses, including climate change, water scarcity,unsustainable farming practices and rising populations, amongst others.
Marc Engel, Chief Procurement Officer said: “Half of the raw materials Unilever buys are from the farming and forestry industries, so ensuring a secure supply of these materials is a major business issue. However, sustainable sourcing is not only about managing business risks, it also presents an opportunity for growth, allowing brands to stand out in the marketplace”
Profit through sustainability
The company highlighted its positive results for 2012, following the recent announcement of €51 billion in annual sales for 2012., which goes some way towards realising Unilever’s vision of ‘doubling the size of its business whilst reducing its environmental footprint and improving its positive social impact’.
Investing in farmers
In a statement online, the company highlighted a number of investments in sustainable farming, following progress made by Unilever in sourcing cocoa, sugar, vanilla and sunflower oil in more ethical and sustainable ways.
The company now follows a number of certifications to ensure its products come from sustianble sources, such as Rainforest Alliance certified cocoa and vanilla bean and GreenPalm certified palm oil, in addition to working with suppliers to improve the traceability of sunflower oil and sugar.
For cocoa, 43% was sourced sustainably by the end of 2012. And 64% of cocoa for Magnum was sustainably sourced through Rainforest Alliance certification. To achieve certification, Unilever has been working with supplier Barry Callebaut to run farmer field schools with 20,000 small farmers across West Africa. The schools work with local farmers to build skills and knowledge around sustainable cultivation practices. Then the farmers spread the knowledge through the community.
Engel said: “Investing in smallholder farmers is critical: so far 450,000 have been trained. If smallholders have access to training, better quality seeds and fertiliser they can significantly increase their yields. We know we cannot do this alone which is why we are forming strategic partnerships with suppliers through our Partner to Win programme, NGOs and other stakeholders.”
Will Public Procurement Budgets Increase in 2021?
Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less.
According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”.
Small, Local Suppliers Take Charge
Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals.
These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects.
Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity.
Post-Pandemic Funding Swells Procurement Budgets
And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns.
Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.