Our material sustainability issues

Defining our material sustainability issues

A sustainability issue is material to Unilever if it meets two conditions. Firstly, if it is considered a principal risk or an element of a principal risk, which could impact our business or performance. And secondly, if it is deemed to be important to our key stakeholders, including: consumers, customers (including retailers), suppliers & business partners, planet & society (including citizens, NGOs, governments) and our employees.

We use our sustainability materiality assessment to identify priority sustainability issues across our value chain so that we are able to report on the issues of most interest to our stakeholders. We update our assessment periodically to make sure it reflects changes in our business and the external context.

Our material sustainability issues

In our most recent sustainability materiality assessment, we identified 11 sustainability issues that are material to both our business and our stakeholders. We have aligned our sustainability materiality assessment with our process for identifying and assessing the principal risks we report in our Annual Report and Accounts.

All of the material sustainability issues listed below are recognised as a principal risk or an element of a principal risk in our annual risk management process. These are the most material sustainability issues to Unilever’s business and performance at this time and could impact us in the short term (the next two years), medium term (the next three to ten years) or longer term (beyond ten years). Our principal risks did not change in 2022. Our material issues are listed in alphabetical order below. We do not list material issues by priority or importance as all have met the threshold for materiality and are considered important to Unilever’s business and performance.

Our 2022 Annual Report and Accounts and the Planet & Society section of our website, set out the actions we’re taking on each of the 11 material sustainability issues.

We identified an additional two sustainability issues that are important to some of our stakeholders but not yet considered to be a principal risk or an element of a principal risk:

• Biodiversity: We recognise that biodiversity loss has the characteristics of an emerging risk as understanding of the link between climate and nature grows. A loss of forests and soil due to potential physical and regulatory risks could make future harvests more difficult and expensive in the long term. Interest in biodiversity and nature loss is rising particularly across governments and NGOs and certain groups of investors and consumers. Protecting and regenerating nature is therefore a key pillar of the Unilever Compass and reflects our commitments on deforestation-free supply chain, sustainable sourcing of key commodities including palm oil, water stewardship and use of biodegradable ingredients.
• Animal testing: Concern over the use of animal testing for cosmetic and household products is high among certain groups of consumers and NGOs. We’ve had a leading position on alternatives to animal testing for many years and continue to work alongside regulatory authorities, NGOs and like-minded companies to share science and advocate the use of non-animal approaches for safety testing. We also continue to seek PETA cruelty-free certification for a number of our Beauty & Wellbeing and Personal Care brands.

Our latest materiality assessment

Our most recent materiality assessment was conducted in 2021, covering the 2021-22 reporting period. We have refreshed our materiality process and methodology to provide more granular insights on the interests and concerns of our key stakeholders: our people, consumers, customers, suppliers & business partners, planet & society and shareholders. We use stakeholder insights to gauge the relative importance of each issue to our key stakeholders. Our four-stage process is detailed below:

Phase 1: Issue and topic identification

We refreshed and consolidated the list of sustainability issues and topics that are directly relevant to Unilever across our value chain. We identified a long list of 125 sustainability topics (PDF 897.56 KB) by researching emerging sustainability trends, macro forces, competitor sustainability priorities and global reporting standards. Our long list included new issues and topics, reflecting changes to the sustainability landscape in recent years such as the increased focus on social issues from a number of stakeholders.

We grouped these topics into 13 broad issues. We took the decision to exclude issues such as tax, safety and data security from our 2021-22 sustainability materiality assessment because they are part of our broader responsible business agenda and are not sustainability issues.

Phase 2: Issue prioritisation

We assessed each issues importance to our stakeholders, using our own stakeholder research and third-party research to determine whether the issues were of high, medium or low importance to each stakeholder. Examples of the research we used in our materiality assessment include:

• Planet & society: Unilever commissioned stakeholder research to gauge the opinions of around 6,000 stakeholders across 20 key markets who represent the voice of ‘the planet and society’ (including activist citizens, NGOs and governments) to understand which sustainability issues matter most to them and their views on where Unilever should prioritise action.
• Consumers: Unilever brand commissioned market research to understand the sustainability concerns of ‘eco-conscious’ consumers, across a range of sustainability topics and markets.
• Customers: Third-party research using an AI-based materiality tool to analyse the public reporting of our top customers.
• Suppliers & business partners: Third party research using an AI-based materiality tool to analyse the public reporting of our top suppliers.

We incorporated additional analysis on the material issues of other FMCG companies, mandatory and voluntary ESG reporting regulations, and news coverage including social media conversations. We then mapped the 13 issues to the principal risks we report in our Annual Report and Accounts, and the key business risk which underpin these.

Phase 3: Strategic alignment and disclosure

The outcomes of our 2021-22 materiality assessment were approved by senior management. The assessment confirmed that our material sustainability issues and the sustainability agenda set out in the Unilever Compass (PDF 501.03 KB) are closely aligned. The insights gathered from our sustainability materiality assessment have informed the sustainability disclosures in our Annual Report and Accounts.

Phase 4: Communicate materiality analysis outcomes

We communicate the outcomes of our materiality assessment on this page of our website. This year we have chosen not to publish a materiality matrix as all of the sustainability issues we have identified as material are recognised as a principal risk or an element of a principal risk and therefore covered in our Annual Report and Accounts.