Unilever, WRI and transparency in supply chains: Five questions for Dhaval Buch, chief procurement officer, Unilever

The world lost 2.3 million square kilometers (230 million hectares) of tree cover from 2000 to 2012, equivalent to 50 soccer fields every minute of every day for 12 years.

So now Unilever and the World Resources Institute (WRI) have announced a new partnership that will increase transparency in agricultural commodity supply chains with the aim to end tropical deforestation.

Dhaval Buch
According to the company:

"The partnership will enable Unilever and its suppliers to use the Global Forest Watch Commodities platform to monitor forest cover change around commodity supply areas and processing facilities such as palm oil mills.”

So I sent Dhaval Buch, chief procurement officer at Unilever, five questions about the announcement. Here are his responses below.

He'll be talking about all this and taking questions about it on October 28th in London at our conference "How business can tackle deforestation - Collaborate effectively with NGOs, understand policy and enforcement trends".

Toby Webb: So what changes will this partnership mean for how suppliers work?

Dhaval Buch: Unilever significantly reduced (by half) complexity in its supply base, and will source most of its volumes from a few key suppliers who will deliver from known and certified sources.

In addition, we will work with suppliers to develop individual time-bound plans that support our commitment.

Our first step is to get traceability back to all the palm oil mills we source from. This means that suppliers need to make transparent to us the exact mills the palm oil is coming from, so we can then make Unilever’s sourcing origin transparent.

The WRI partnership then lets us determine the risk associated with our supply chains, so that we can take action and mitigate any links to deforestation.

The Global Forest Watch platform will be linked to the traceability tool Unilever is using and provide transparency of our sourcing overlaid with the deforestation hotspots.

Combining the two innovative tools will provide us real-time insights into the state of forests within Unilever’s supply chain and provides a monitoring and risk assessment tool to determine high risk sourcing origins connected with deforestation and development on peat, so we can work with our suppliers to either exclude high risk mills and/or adopt sustainable best practices.

These insights are crucial to make supply chains transparent and ensure no link to deforestation.

Palm Oil will be the first focus area, but once successful, we can expand this to include other commodities such as soy and paper and pulp.

Toby Webb:  How will you 'encourage' suppliers to make use of the technology if their take up is slow?

Dhaval Buch: Unilever has been engaging with our suppliers since the start of this year, to help them understand how we need to work together to transform the industry.

This has been through face to face workshops and meetings, to really help them understand the issues and now the majority of our supplies are fully on board with traceability.

We have also made the reduction in our supplier base no secret, so suppliers know that we are only working with companies that are committed to this.

Toby Webb: What do you hope to achieve here and how is this linked with your sustainable living plan?

Dhaval Buch: The fact that we know the source allows us to identify both certified and non certified mills and to work with suppliers to move any non compliant mills and their supplying plantations to RSPO compliance and beyond.

This will enable more transparency of our supply chain. The intention here is to not only benefit Unilever but to drive the acceleration of sustainable production sheds and eventually drive market transformation.

This ultimately contributes to our Unilever Sustainable Living Plan commitment to source all palm oil from traceable and certified sources by 2020. This partnership will help to accelerate our progress and make transparent our sourcing origins.

Toby Webb: Will you share your learnings with other companies, for example, with Nestle, if asked?

Dhaval Buch: Yes indeed and in fact we have also much to learn from our peers.

In addition, Unilever is working with industry leaders and NGO’s to move towards a collaborative solution to halt deforestation, protect peat land, and to drive positive economic and social impact for people and local communities.

An industry alignment on the definition of traceability is critical. Unilever supports the IDH palm oil traceability working group, which consists of members from key palm oil industry companies, that is helping to spearhead consistency of implementation and understanding of traceability in the palm oil industry as a whole.

Later this year we will also publically share progress on our commitment.

Toby Webb: We see mixed news on tropical forests. Deforestation rates down in Brazil, up in Indonesia. How optimistic are you about companies such as Unilever having a meaningful impact on preventing deforestation to 2020?

Dhaval Buch: Advocacy is an important part of our work to reduce deforestation.

Unilever has many partnerships with NGOs such as WWF, IDH, Solidaridad, WRI and others, we were also a founder of RSPO and a Co-Chair of the Consumer Goods Forum, which led to the development of the Tropical Forest Alliance, plus we work with smallholder farmers towards sustainable production of palm oil with NGO, industry and government support.

We are optimistic that through these industry collaborations, companies like Unilever can have a meaningful impact.


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Three focused, detailed and practical sustainable business events for your diary

Upcoming Innovation Forum events in 2014:
Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S, Waitrose, and many others 

An exclusive two-day executive training workshop, certified by the CSR Training Institute
30-31 October, 2014, London. More details here.

With direct experience from: Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, and many others 

Business and human rights      (Lots of coverage of License to Operate issues)
How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here. (In Association with the Institute of Human Rights and Business)

With: John Lewis, Nestle, First State Investments, Aviva, RBS, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others. 
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