Why Unilever is teaming with NRG on clean energy

Why Unilever is teaming with NRG on clean energy

Unilever's 10,000-person U.S. operation buys enough renewable energy certificates to offset the electricity needs of all its sites, but the company behind brands including Ben & Jerry's, Dove, Q-tips and Hellmann's believes it is time to be bolder in its quest to shift away from carbon-intensive energy.

That realization was the catalyst for the company's new strategic partnership with NRG Energy, one responsible for developing what it called "solutions for onsite and offsite renewable generation resulting in 100 percent clean energy for all energy use at Unilever U.S. sites by 2020."

Although neither company is ready to talk details, the blueprint will map closely to Unilever Sustainable Living Plan, under which it has pledged to double the size of its business by 2020 while simultaneously reducing its environmental footprint, sourcing all of its agricultural raw materials sustainably and improving the lives of 1 billion people. 

While other massive companies, such as retailers Walmart and IKEA, have invested extensively in on-site generation technologies to realize their sustainable business goals, Unilever has yet to do so. That must change. "We can't be leaders in this space without shifting to an onsite mix," said Jessica Sobel, manager of Sustainable Living for North America.

This is more than a procurement discussion. "We looked at what company could help us innovate," Sobel said.

"Our first step is to create a roadmap. We are going to take a portfolio approach," said Leah Seligmann, director of sustainability at NRG Energy. That means it will stretch across all of its facilities, including manufacturing sites, commercial operations and distribution centers.

The new relationship came together after one quick meeting of both companies' leadership that reinforced their mutual desire to invest in renewable energy technologies. "This transformational partnership with NRG to move all of our U.S. operations to 100 percent renewable energy will make our business more resilient, sustainable and profitable," said Kees Kruythoff, president of Unilever North America, in a statement.

Unilever unfurled its Sustainable Living Plan in 2010. It has managed some notable progress, such as reducing the carbon emissions of its manufacturing processes by 32 percent over the past five years. Still, overall emissions have risen 5 percent, mainly because of the company's acquisition of shampoo business Alberto Culver, and Unilever's CEO Paul Polman has declared the need to do more.

As it builds out its renewable energy generation strategy, Unilever can study the example of Walmart. The retailer already sources about 14.5 percent of its energy from solar systems that it has built at U.S. stores, distribution centers and Sam's Clubs locations but it just announced plans to double its on-site solar energy projects by 2020. Most of its systems were built and installed by SolarCity. At the end of 2013, it had roughly 240 installed projects in place.

"The renewable energy we buy meets or beats prices from the grid," said Walmart U.S. President Bill Simon last week during a high-profile briefing with President Barack Obama at a solar-powered store in Mountain View, Calif. "And with our 2020 energy goals, we anticipate savings of over $1 billion per year on our energy bill."

By that time, Walmart hopes to "drive the production or procurement" of 7 billion kilowatt-hours of renewable energy.