Natural capital and ecosystem services
‘Natural capital’ is a term used to encompass the value that nature represents, on which we are all dependent. ‘Ecosystem services’ covers more specific beneficial processes that can be valued as part of natural capital. For example, the provision of drinking water or the degradation of organic waste.
According to the Natural Value Initiative, a non-profit body funded by the Dutch government, over 60% of these services worldwide are being degraded or used up faster than they can be replenished.
The loss of natural capital and associated ecosystem services around the world threatens Unilever’s raw material production systems. This is because agriculture is dependent on ecosystem services derived from:
soil (for example, to make nutrients available to plants)
water (where irrigation is used)
farmland biodiversity (for example, pollination services – provided by bees and other insects) and
large-scale ecosystems (for example, wetlands or forests providing year-round stream-flows).
Farming can also have impacts on the ecosystem services experienced by others in the same landscape or downstream, for example when agricultural pollution enters watercourses.
Unilever is amongst the world’s largest users of agricultural raw materials such as tea, vegetables and vegetable oils. Growing our business – whilst conserving biodiversity – is a substantial challenge. In order to minimise our negative impacts on biodiversity (both ecosystem service provision and losses of species and habitats), we need to ensure that our sourcing activities do not encourage detrimental land use changes or practices.
This is why we are taking action to avoid deforestation associated with sourcing our agricultural-based ingredients, the paper and pulp for packaging, and extraction of non-renewable resources.
In 2010 we obtained a commitment to zero deforestation by 2020 by all 400 members of the Consumer Goods Forum (CGF), of which we are a member. Unilever led the foundation of the Tropical Forest Alliance (TFA), a public-private partnership between the CGF and the governments of the US, UK, the Netherlands, Norway, Indonesia and Liberia. The TFA is committed to reduce and eventually eliminate the deforestation associated with the sourcing of palm oil, soy, beef, paper and pulp. In 2013, we launched our Sustainable Palm Oil Sourcing Policy. This is designed to drive market transformation by working with key suppliers and the industry to focus on stopping deforestation, protecting peat lands and driving positive economic and social impacts for people and communities. Our policy builds on the Roundtable on Sustainable Palm Oil (RSPO) Principles & Criteria as a foundation.
Unilever Sustainable Agriculture Code
Protecting biodiversity is central to our Sustainable Sourcing Programme. One of four principles in our Programme is: ‘Ensuring any adverse effects on…biodiversity from agricultural activities are minimised and positive contributions are made where possible’.
Biodiversity is one of our 11 core indicators that we use to measure sustainable farming practices.
The Unilever Sustainable Agriculture Code is designed to ensure that our agricultural sourcing activities minimise impacts from land use, or land use change, on biodiversity, natural capital and ecosystem services.
The Code has a specific chapter devoted to biodiversity. This encompasses both functional aspects (ecosystem services) and the protection of rare and vulnerable species and ecosystems on and around farms.
We do not explicitly use the terms ‘natural capital’ or ‘ecosystem services’ in the Unilever Sustainable Agriculture Code as it was written with farmers as the target audience. Nevertheless, key issues are covered by the Code. For example, reducing negative impacts of farming on ecosystem services, and building more resilient farming systems that enhance ecosystem services such as cultural control of pests and diseases and building healthy soils.
Third-party certification schemes
Those third-party certification schemes that we use as evidence of sustainable agriculture, all include criteria to minimise impacts from land use or land use change on biodiversity, natural capital and ecosystem services.
For example, we have committed to certification schemes for tea and cocoa with Rainforest Alliance, and for palm oil with the Roundtable on Sustainable Palm Oil. These initiatives demand a high degree of commitment to biodiversity. In this way, we ensure that we buy resources from farms where natural ecosystems are protected and restored.
The full list of certifications that we work with is available as an Annex to the Unilever Sustainable Agriculture Code Scheme Rules. See Downloads for more. We are working with our suppliers to encourage the use of such practices within their own operations. We have found that many of our suppliers and farmers have no direct experience of working directly on biodiversity or in partnership with conservation organisations. They are often unsure of how to start or how much work will be needed to make a significant impact.
Encouraging positive action
Experience in pilot programmes that we have done with some of our suppliers has shown us that it is possible to adopt better agricultural practices that are sensitive to biodiversity without harming agricultural yield or profitability.
Implementation of the Code by the farmers who produce our agricultural raw materials involves a commitment to identify local biodiversity and/or ecosystem services issues. They must then take action to make a positive impact.
Since biodiversity issues vary widely across the world, this has resulted in a wide range of projects. Examples of these are showcased in our guide, ‘Unilever suppliers – a closer look at biodiversity’. See Downloads for more.
Safety & Environmental Assurance Centre
Our Safety and Environmental Assurance Centre (SEAC) is currently supporting activities that will enhance our knowledge of our biodiversity footprint. In 2012, SEAC quantified our land footprint. This is the total amount of land being used to source our raw materials, and related potential land use change. SEAC is working with the Natural Capital Project at Stanford University on developing ways to measure the impact of Unilever’s sourcing decisions.
Ecosystem Markets Task Force
At a policy level, Unilever seeks opportunities to engage policy makers on this agenda. Amanda Sourry, Chairman of Unilever UK & Ireland, for example, was a member of the Ecosystem Markets Task Force (EMTF) in the UK. The Task Force set out to develop a range of practical recommendations for businesses and government to protect ecosystems.
The Task Force’s final report, published in March 2013, affirmed that a new approach was needed by businesses to maximise opportunities and manage future risks related to their reliance on nature. We welcomed the main recommendations of the report, which included innovative solutions such as anaerobic digestion and bio-energy on farms, and nature-based certification and labelling. Unilever welcomes the opportunity to continue the discussion with the Task Force and the UK government about possible ways forward.
Protecting biodiversity in Kenya
Our tea operations in Kenya provide an illustrative example of our biodiversity commitments in action. We have been working to protect the indigenous trees that cover over 10% of the Kericho tea estate. We also launched the Trees 2000 project to mark the millennium. The project has since contributed well over 1 million trees to Kenya’s landscape.
At Kericho, we have established seven tree nurseries where we grow indigenous seedlings for planting around the estate and surrounding community. The aim is to increase biodiversity and complement existing conservation and environmental protection programmes. These are designed in partnership with colleagues from Unilever’s Sustainable Sourcing Programme. To remind people of the need to preserve the environment, all visitors to our Kericho estate are invited to plant a tree.
The Kericho estate is also contributing to the conservation of the nearby Mau Forest, which is under threat from human activity and deforestation. Working with local non-profit Friends of the Mau Water Shed (FOMAWA), we have supplied tree saplings for reforestation projects and helped to finance staff to work on forest conservation.
Our achievements in fish sustainability
In 1996 we co-founded the Marine Stewardship Council (MSC) with the conservation organisation WWF to establish a global standard for sustainable fisheries management.
In 2006 we sold a large part of our frozen foods business, including our European fish business. Our Italian frozen foods business, Findus, was subsequently sold in July 2010. The sale comprised the leading brands: 4 Salti in Padella, Sofficini, Capitan Findus and That’s Amore, and a dedicated factory in Cisterna, Italy.
We are proud of what we achieved between 1996 and 2006. Although we were not able to reach our 100% sustainable sourcing target, there continues to be encouraging signs that consumers are making the connection between their food choices and the goal of sustainable sourcing. Retailers including Tesco, Walmart, Sainsbury’s and Carrefour, as well as many foodservice companies, now source from MSC-certified fisheries and worldwide thousands of seafood products now bear the MSC ecolabel.
In 2013 Unilever was named sector leader by the CDP's Forests programme, which recognised the work we are doing with our suppliers to increase capacity to provide sustainable commodities. We were also joint sector leader in 2012 and 2011 and have disclosed our forest footprint since 2009.
Unilever received a World Business and Development Award at the Rio+20 UN Conference on Sustainable Development in June 2012 for our work with tea and allanblackia farmers in Africa. The award recognises companies that are implementing ‘inclusive business’ models that deliver both commercial success and help improve social, environmental and economic conditions.
These recognitions follow on from earlier work we have been involved in:
‘Is natural capital a material issue?’ – a report by ACCA, KPMG and Fauna & Flora International in 2012 that highlighted how the benefits deriving from biodiversity and ecosystems (and the risk of their loss) are rarely considered to be material by companies.
A study (2009) based on the Natural Value Initiative’s (NVI) Ecosystem Services Benchmark in which Unilever scored 78% versus the sector average of 40% for managing our dependence and impact on biodiversity and ecosystem services.