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Unilever's carbon labeling initiative will drive new behavior in the supply chain

While similar initiatives proposed by retailers have fallen flat, the company's status as a manufacturer could carry more weight.

Unilever products, Dove brand

Welcome to part two of my analysis of Unilever’s headline-grabbing decision to gather and publish carbon footprint data from its legions of suppliers. Part one examined the potential impact on consumer behavior. The focus this week is supply chains.

The first thing to say is that there’s precedent here — and it’s not encouraging. Around a decade ago, Tesco, a leading U.K. supermarket, attempted something similar only for the move to fizzle as the enormous complexity of collecting so much data became clear. PepsiCo also scrapped the carbon label that for a time appeared on its Walkers potato chips, after realizing that consumers lacked points of comparison needed to make the information useful.

Will things work out differently this time?

I’d bet money they will. For starters, suppliers are already under pressure to measure and improve their sustainability numbers. At Walmart, for instance, the sustainability team has a collaborative initiative, Project Gigaton, designed to help suppliers cut a whopping 1 billion tons of greenhouse gas emissions by 2030. In addition, an infrastructure is in place — provided by nonprofits such as CDP and companies such as SupplyShift — designed to make it easier for suppliers to gather the necessary data.

One way to drive real impact is to have a very aggressive goal that drives a clear demand signal to suppliers that we need you to act and that we will hold you accountable.

It’s also significant that this drive is coming from a manufacturer rather than a retailer, noted Alexis Bateman, director of MIT Sustainable Supply Chains. To measure a carbon footprint for every product, Unilever will have to work with suppliers to collect data on raw materials, farming practices and other point-of-origin information. That will be a big ask, but it may be easier for Unilever to make the request than, say, Walmart. "They have a little more leverage and closer relationship with suppliers," Bateman told me.

This is potentially a big deal, because what Unilever is attempting is in some ways more ambitious than existing initiatives. Retailers generally commit to reducing emissions across their entire supply chains by a certain date. Unilever has that goal: It’s targeting zero emissions from its products by 2039. But Unilever’s data-collection requirements effectively force every supplier to participate. And not just existing suppliers: Companies hoping to sell to Unilever will need to be competitive on emissions to do so.

"One way to drive real impact is to have a very aggressive goal that drives a clear demand signal to suppliers that we need you to act and that we will hold you accountable," said Elizabeth Sturcken, a supply chain expert at the Environmental Defense Fund.

As always, I’d love to know what you think. Are Unilever’s targets game-changing or overhyped or somewhere in between? Send your thoughts to [email protected].

This article was adapted from the GreenBiz Food Weekly newsletter. Sign up here to receive your own free subscription.

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