In the consumer goods industry, sustainability is an imperative. Companies face mounting pressure to cut carbon emissions, reduce plastic waste, uphold human rights in far-flung supply chains, and ensure products are safe and sustainable. The challenges are immense. The sector’s manufacturing and logistics generate significant greenhouse gases, billions of single-use plastic packets and bottles end up as pollution, global supply chains risk labour abuses and poverty wages, and consumers demand products that are both safe and eco-friendly.

Unilever, one of the world’s largest consumer goods companies, exemplifies both the scale of the challenge and a proactive response. In recent years, Unilever has doubled down on four ESG focus areas – climate (decarbonization), plastics (and packaging), supply chain (human rights and fair wages), and product sustainability (safe ingredients and consumer well-being), as part of its global “Growth Action Plan 2030” for sustainable business. The company’s approach balances ambition with pragmatism: it has refined some goals to be more realistic amid economic headwinds, even as it pushes ahead with innovative programs and partnerships.

“We’ve set clear priorities and seen early results, while accelerating efforts on systemic sustainability challenges to create lasting impact for business and society,” says Rianne Buter, Unilever’s Global Head of Sustainability.

Below, we explore how Unilever is tackling each of these four ESG pillars. We begin with the industry-wide problems and then highlight what Unilever is doing to address them, focusing on tangible actions, results, and lessons from the company’s 2024 Annual Report and recent sustainability updates.

Cutting Carbon Across the Value Chain

Climate Challenge: The consumer products sector has a hefty carbon footprint, from energy-hungry factories to agricultural sourcing and product use. For a company like Unilever whose portfolio ranges from soap and shampoo to ice cream and tea, the urgent challenge is to decouple growth from greenhouse gas (GHG) emissions. Governments and investors are pressing for alignment with the Paris Agreement, and companies must mitigate risks from climate change (physical impacts, carbon taxes, etc.) while seizing opportunities in low-carbon innovation. In Unilever’s case, about two-thirds of its GHG emissions occur in its supply chain (purchased ingredients, materials, and related activities) rather than its own operations. This means that tackling Scope 3 emissions those from suppliers and product use, is critical, on top of greening Unilever’s own manufacturing and power usage.

Unilever’s Action: The company has committed to net-zero emissions across its value chain by 2039, with nearer-term science-based targets to 2030. Unilever’s updated Climate Transition Action Plan (CTAP) lays out concrete steps and was endorsed by 99% of shareholders in 2024. Internally, Unilever is well on track to eliminate emissions from its own operations (Scopes 1 and 2) by 2030 – it has already achieved a 72% absolute reduction in manufacturing and operational GHG emissions (Scope 1 & 2) vs. 2015. All Unilever factories worldwide now run on 100% renewable grid electricity, and energy efficiency measures are ongoing. The bigger hurdle is Scope 3. Here Unilever set more ambitious targets for its value-chain emissions, approved by the Science Based Targets initiative, focusing first on raw material and ingredient emissions.

💡Unilever has slashed its direct GHG emissions by over 70% since 2015, putting it on course to reach net zero in its own operations by 2030. The immediate priority now is cutting Scope 3 emissions which make up about 63% of the company’s carbon footprint by working closely with suppliers.

A core program is the Supplier Climate Programme, now in its third year, which partners with suppliers to reduce their emissions and share product carbon footprint data. Unilever is zeroing in on ~300 key suppliers that account for nearly half of its supply-chain emissions (for example, chemical ingredient makers, packaging producers, and third-party manufacturers). By providing tools, training, and co-investment, Unilever helps suppliers measure and curb emissions – from encouraging renewable energy to tweaking processes to cut waste. For instance, many of Unilever’s palm oil suppliers have adopted methane-capture technology at their mills – 336 palm oil mills in Unilever’s supply chain now have methane capture systems, preventing this potent GHG from entering the atmosphere.

Rethinking Plastics and Packaging

Plastics Challenge: The world is awash in plastic waste, and consumer goods companies are under intense scrutiny as major contributors. Single-use packaging from foods, home and personal care products often ends up in landfills or the environment. Regulators are responding from bans on certain plastics to proposed global agreements and consumers increasingly favour brands with sustainable packaging. Yet the technical hurdles are significant: companies must reinvent packaging design, invest in recycling systems, and perhaps overhaul delivery models (think refillable or reusable containers) to truly “close the loop” on plastics. Unilever alone uses about 700,000 tonnes of plastic packaging annually, making this both a reputational and environmental priority.

Unilever’s Action: Unilever has been a frontrunner in setting bold packaging goals, though it learned the hard way that bold goals must also be feasible. Back in 2019, the company pledged to halve its use of virgin (new) plastic by 2025, but by 2023 it became clear this 50% cut was out of reach. In 2024, under CEO Hein Schumacher, Unilever revised its plastics commitments to more realistic milestones: a one-third reduction in virgin plastic by 2026 and 40% by 2028 (from a 2019 baseline). These adjusted targets still demand aggressive action, but acknowledge constraints in technology and infrastructure.

💡Unilever has cut its virgin plastic footprint by 23% (relative to 2019 levels) and increased recycled plastic to 21% of its packaging as of 2024. This progress keeps the company on a solid path toward its goal of a 40% virgin plastic reduction by 2028, even as it extends timelines to ensure solutions are practical and scalable.

Crucially, Unilever isn’t pursuing these changes alone. It has been a leading voice in pushing for industry-wide solutions and policies to support a circular economy for plastics. The company is a co-founder of the Business Coalition for a Global Plastics Treaty, advocating for an international agreement to curb plastic pollution. CEO Hein Schumacher has been public about wanting a strong treaty “with teeth”, meaning binding rules that apply to all players. “From the very beginning, we have said we prefer binding rules because we feel that it leads to a level playing field for business,” Schumacher told Reuters, emphasising that clear global standards would help companies confidently invest in new packaging solutions without fear of being undercut by less responsible competitors. A robust UN plastics treaty, he noted, would also simplify compliance for global companies like Unilever by harmonising the currently fragmented patchwork of national regulations.

Unilever’s updated plastic goals, while less splashy than earlier pledges, appear to be driving real progress. The company’s use of recycled plastic has climbed to 22% of its packaging portfolio by early 2025, keeping it on track for the 25% target. And by extending the deadline for 100% reusable, recyclable or compostable packaging to 2030 for rigid plastics and 2035 for flexibles, Unilever is acknowledging technical and infrastructure hurdles while still committing to the end goal. This measured approach has largely been welcomed by investors and experts who prefer honesty over greenwashing. The company continues to face challenges, flexible plastic sachets, for example, remain a pain point until scalable alternatives or recycling systems are in place. But Unilever’s combination of internal R&D investment (the company recently boosted funding for packaging innovation centres) and external coalition-building positions it as a frontrunner in the quest to solve plastic waste.

Fair and Inclusive Supply Chains

Supply Chain Challenge: Behind every bar of soap or cup of tea that Unilever sells, there is a vast global supply chain: millions of farmers, factory workers, and small business owners who grow, make, or distribute its products. Ensuring fair wages, safe working conditions, and respect for human rights across this network is one of the hardest ESG issues to manage. Industries like palm oil, cocoa, and tea (all important to Unilever’s brands) have long histories of labour rights concerns, from child labour to poverty-level incomes for smallholders. Moreover, women and marginalised groups often bear the brunt of inequities. In recent years, investors and civil society have ramped up scrutiny on supply chain practices, and new regulations (such as human rights due diligence laws in Europe) are raising the bar.

Unilever’s Action: Unilever has made a high-profile commitment to raise living standards in its value chain, declaring that “everyone who directly provides goods or services to Unilever will earn at least a living wage or income by 2030.” This goal, announced in 2021, was groundbreaking, but by 2024 the company recalibrated its approach to focus on the most impactful areas first. Rather than immediately target every single supplier, Unilever set a mid-term goal: suppliers accounting for 50% of its procurement spending will have signed onto its Living Wage Promise by 2026. Signing the promise means the supplier commits to measuring any gap between current pay and local living wage benchmarks, and to developing plans to close that gap. As of 2024, suppliers representing 32% of Unilever’s spend have come on board this initiative. To support them, Unilever launched a Living Wage Supplier Program in partnership with the Sustainable Trade Initiative (IDH), offering training, tools, and resources for suppliers to gradually raise wages.

It helps that Unilever can lead by example. Since 2020, every Unilever employee worldwide has been paid at least a living wage for their location, and the company earned a second global accreditation as a living wage employer in 2024. This credibility gives Unilever a platform to persuade (and pressure) its partners. In fact, Unilever’s updated Responsible Partner Policy will require suppliers to pay living wages by 2030 as a condition of doing business

“As a company we cannot thrive when societies fail. We value and support those who depend on Unilever to make a living, because in return our business success depends on them,” says Anouk Heilen, Unilever’s Head of Social Sustainability.

Safer Products and Sustainable Ingredients

Product Sustainability Challenge: Consumers increasingly demand that products be both high-performing and safe, for people and the planet. This means companies like Unilever must scrutinise the ingredients that go into their shampoos, soaps, foods and cleaners, ensuring they pose no health risks and are sourced responsibly. It also means improving product safety and quality controls to avoid any harmful incidents (like contamination or mislabelling). Furthermore, sustainable products often entail reducing or replacing ingredients that have a high environmental footprint, for example, cutting down chemicals derived from petroleum, avoiding microplastics, and using biodegradable materials. The challenge is to innovate formulations without compromising on efficacy or affordability. In some cases, entire product portfolios need revamping to meet new regulatory standards (e.g. bans on certain chemicals) and to align with consumer values (like demands for cruelty-free cosmetics or toxin-free cleaners).

Unilever’s Action: Product safety is a foundational priority for Unilever, one that the company approaches with an almost scientific rigor. The company has a Safe Product Framework that governs every stage from R&D through production and post-market monitoring. In practice, this means every new ingredient and formula undergoes stringent safety assessments (covering toxicity, allergies, environmental hazards, etc.), and every factory follows strict quality controls. Unilever has a dedicated Safety & Environmental Assurance Centre (SEAC) staffed with experts in toxicology, microbiology, and other disciplines to validate that “our products and the ingredient levels we use are safe by design”. This science-led approach paid off in 2024: thanks to continuous improvements in process controls and monitoring, Unilever reduced the number of product safety incidents in the marketplace by more than 10% compared to 2023.

💡Unilever’s relentless focus on quality and safety yielded a 10% drop in product-related incidents and recalls in 2024 versus the prior year.

Ensuring ingredient safety goes hand in hand with sustainability. Unilever has committed to eliminating certain controversial substances from its products, often ahead of regulation. For instance, it phased out plastic microbeads in personal care products years before many governments banned them. Now, a key frontier is eliminating animal testing. Unilever has been a vocal industry leader advocating for an end to animal testing in cosmetics and advancing alternative safety assessment methods. It co-chairs the European Partnership for Alternative Approaches to Animal Testing and collaborates with government agencies like the U.S. EPA to develop cutting-edge, non-animal toxicity tests. By 2024, most of Unilever’s product assessments were done without animal tests, using predictive models and lab-grown cell assays – a trend the company is pushing to make universal, even as it navigates differing regulatory requirements in some markets. The ultimate goal is products that are proven safe for consumers and the environment without any animal harm, aligning with the values of many consumers (and employees).

On the sustainability front, Unilever’s drive for “trusted ingredients” means sourcing and designing products with a lower environmental footprint. We saw earlier how the Clean Future program is removing fossil-fuel-based ingredients from cleaning products (thereby cutting carbon). Similarly, in its Beauty & Personal Care segment, Unilever launched its “Positive Beauty” vision, which includes using more natural and biodegradable ingredients and transparently sharing product ingredient information. For example, the company has begun disclosing fragrance ingredients for its beauty products and ensuring all new formulations are biodegradable wherever possible.

Finally, Unilever’s ESG governance ensures product safety and sustainability get top-level attention. The Board’s Safety & Sustainability Committee reviews metrics like safety incidents, consumer complaints, and progress on sustainable sourcing of ingredients. In 2024, Unilever’s CEO and executive team also integrated sustainability performance indicators (SPI) into management incentives, with one KPI for each priority area (climate, nature, plastics, livelihoods) to drive accountability. This means that delivering safer, greener products isn’t just a CSR talking point, it affects the scorecard of business unit presidents and even bonus calculations.

Toward an Integrated, Impactful ESG Strategy

Unilever’s experience offers a window into how a global company can embed ESG principles into its core operations. The journey is far from simple. In 2024, Unilever attracted some criticism (and investor pressure) when it scaled back or extended timelines for certain sustainability pledges – for example, extending its plastic targets and modifying its living wage commitment to focus on half of suppliers by 2026 instead of all by 2030. Some activists saw this as backtracking, yet Unilever’s leadership frames it as a pragmatic reset to avoid over-promising. The company insists it remains as committed as ever to its four sustainability pillars of climate, nature, plastics, and people’s livelihoods.“He insisted that the company could still ‘make a difference’ in the four key areas,” The Guardian reported of CEO Hein Schumacher’s stance. In fact, Unilever’s 2024 results show encouraging progress: major cuts in operational emissions, steady reduction in virgin plastic use, tangible improvements in supply chain livelihoods, and safer products reaching consumers.

For other companies navigating similar challenges, Unilever’s multi-pronged strategy offers a compelling case study: set ambitious but achievable targets, embed ESG into governance and incentives, invest in innovation, work collaboratively across the value chain, and be transparent about progress and setbacks. This balanced, impact-driven approach is how Unilever is attempting to future-proof its business in an era where sustainability is a prerequisite for long-term success. And as the data shows, it’s making headway: cutting carbon, reducing plastic, improving livelihoods, and delivering safer products, all while remaining one of the world’s top consumer goods firms. In the evolving landscape of corporate sustainability, Unilever’s compass appears firmly pointed toward creating value and positive impact, one practical step at a time.

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