Dave Ingram, CPO at Unilever ©John Need
Dave Ingram, CPO at Unilever ©John Need

“Our ambition is to create the world’s most sustainable business,” says Unilever CPO

posted by Ceri Jones
9 December 2021

Unilever CPO Dave Ingram talks to Supply Management about radical sourcing and procurement’s relationship with agriculture, science and technology

What are your thoughts on ESG and how it’s changing the way businesses operate?
It’s a little bit ingrained in me. One side of my family was in farming and the other in fishing, if you go back to my grandparents. I was brought up in the countryside and most of my school friends are farmers. There’s something about nature that I really enjoy and it brings me happiness so, if I’m stressed with the world, I tend to go for a walk in the countryside.

From a professional point of view, when you start walking the supply chains and you walk through coconut sugar fields – which tend to be very close to rubber, palm and tea plantations, or sugar and salt – you see what’s actually happening on the ground. You see people who are struggling to make ends meet and, as a professional, you have a responsibility to ensure the sustainability of the crop and that people are earning decent money from it. The best way for them to do that is, very often, to do what they’re already doing but more sustainably.

Over the past five years, the climatic effects of the world have really struck us all. And you already see crop shortages and the impacts of environmental conditions on consistency, reliability and resilience of agricultural systems. And you start to understand the interlinking of climate, nature and social conditions in the world.

Can procurement help change the mindset?
When I came into procurement just under three years ago, most buyers had a very singular and fantastically strong mindset on cost – for us, this wouldn’t fulfill enough of the company’s ambition, which is about creating the most sustainable business in the world. So to invest more in our partnerships, three years ago we created our Procurement with Purpose strategy, which has three big banners: buying responsibly, buying better and growing with others.

It’s a very simple, clear strategy and its served us well. Initially, our focus was around nature and laterally it has been around climate with our suppliers. Our core buyers in inorganics are now leading the programme of greenhouse gas reduction with our suppliers. Today, and for the past 10 years at least, we’ve been seeing sustainability as a significant part of why people want to come to us – they want to be doing something good.

So your values are attracting more workers?
Yes, in terms of talent, in terms of graduates. In 2008 I landed in China. We were doing these surveys of graduates coming in and the number one reason for graduates coming to Unilever in China 13 years ago was ESG. It’s funny, most people I say that to say it’s surprising but, having lived in China for six years, I’m not surprised because the youth want to make a difference, and they realise they have an obligation to make a difference.

How do you ensure buying aligns with the company’s values and science-backed decisions?
I think it’s a call to action for all procurement professionals: they must understand well not just who they buy from but where things come from. Many procurement professionals think about the price and the competitive nature of that price, but not much more. I want to know which field it came from and which farmer, I want to know what was paid – was the farmer paid a living wage? I want to know if that field has ever been deforested over the governing periods we have. And I want to know if trucks going into the mills we’re associated with – whether it’s for soy or palm or any other crop – are also coming from clean, non-deforested land.

That’s the transformation we need to ensure we’re running responsible supply chains end to end. We’re immensely keen on driving radical transparency in chains, and understanding down to the field or the palm where our products come from, and we’re dramatically changing our sourcing in many cases to be able to understand that. We don’t buy from farmers of palm directly, we buy three or four levels up the chain, but I still want to know where it comes from.

How do you achieve this radical transparency?
The big unlock was data, and the big unlock in data is technology. Technology that’s coming into supply chains and farming systems is really helping us map and manage risk, along with some other techniques of direct auditing. Putting the full suite together, you can risk-manage supply chains much better than ever before. We’re using geospatial technologies with orbital insight, we work with Google Earth Engine to put our data together and map systems of complex supply chains, so our view in these things is always to engage and dive deep and understand the sourcing first.

We’re not keen on walking away from things that look like problems and on to things that don’t look like problems. Let’s take the easy example of moving from palm to coconut oil. You’re moving from something that is being challenged publicly for good reason – there are elements of that supply chain that globally have been deforested in the past – but just moving to something that’s attracted less publicity doesn’t mean it’s any better. Coconut oil would need twice the volume of land to supply it because of the yield of palm oil. That’s why palm oil can be such a wonderful crop, when sourced sustainably.

This approach must take a lot more resource, in terms of time and cost
Actually, I think it starts before cost, I think it starts with a belief. As a company, do you want to know where your products come from? We’ve worked with many farmers – whether in tea or palm or coconut sugar – where giving them access to education systems can dramatically improve yields. This is because they’re not quite educated on exactly which fertiliser, irrigation system or where to sell is best or them, so that education is absolutely fundamental. And that can eradicate what might be perceived as paying all of that investment into a system that isn’t itself improving.

We’re very much involved on the ground and we work with other companies which are, so it’s also about choosing responsible partners through the supply chain. And that’s across agri economies, in plastics it’s the same thing. We work very closely with plastics recycling companies to understand where they get their product and how is it picked up. But it does come back to that belief. I need to know where this comes from right back to source – and I’m going to leverage data, technology, relationships and partnerships to get me there.

How have you managed with the ongoing shortages, price rises and logistics problems?
Like every other procurement or supply chain professional, we thought the first year of Covid was hard but the second year has been even harder. It comes down to the teams. I’m constantly in awe of our teams and I’m hugely proud of how they’ve dealt with it. One of the earlier things we did was set up a control tower for incident management and resilience inside procurement.

That team has been generating data systems inside the business. They’re doing some tracking of what’s happening environmentally, what’s happening with supply companies, what’s happening on freight, and they’re helping us juggle the pieces. They don’t have any other role apart from resilience management so they’re helping our buyers look at where the high-priority items are that are single sourced, and I look at all those resilience levers. Setting that up in early March or April last year has been a massive unlock for us because data is often the challenge for any company.

Can you tell me why Unilever decided to sponsor COP26 and what it will do for the business?
Well, first, our main aim of engaging strongly in COP26 is to help push industry and governments along the agenda of committing to the 1.5 degrees climate movement, and to be advocating for more businesses to be setting science-based targets and to be open about communicating those. From a procurement perspective, we’ve launched our Climate Promise, which we’ve asked all our 56,000 suppliers to commit to. We have an ultimate aim to have carbon footprint on invoice, and on pack for our consumers.

Now the Climate Programme is looking at our own footprint – 37% of Unilever’s footprint sits with our supply base. About 300 suppliers are critical in terms of our footprint reduction. We’re working with the top 15 of those in-depth on where they are, where they are targeting, what they think their opportunities are for reduction. We see that as a hand-in-hand process. Over the course of the next coming quarters, we’ll go from this initial subset to the 300 key partners we need to engage with to get that programme rolling.

How did you identify those 300 top emitters?
There are a lot of public databases around the CO2 impact of raw materials. By narrowing down to key ingredients, we know from public sources and good science-based sources where the main impacts are. We then work with the companies supplying us those ingredients to give us real data on their actual CO2 – some are in a better position than others – rather than using scientific averages. That gives us real data to use as a starting point that’s relevant to the journey they’re committed to.

Our long-term partnerships have tended to be with people who have similar values to ours. We’ve been working for 10, 20, 30 years with some of those companies, with similar values, ambitions and struggles. And, you know, we’re not going in with an axe or a hammer, we’re not going in with a mandate that “you must achieve X tomorrow” because we know that’s unrealistic and unhelpful. The key for us is to engage, understand, educate, create programmes of change, learn from those, share those and get a movement of change. Every company is in a different place so we want to be understanding about where people are in terms of leveraging solutions, rather than narrowing down options about where we source from.

Could a company with less funding emulate this sort of initiative?
We’re accessing a host of industry bodies and sources of scientific help that we know either have open access for smaller businesses or actually have entities within them that are addressing SMEs specifically. So there are a lot of resources out there. Climatic change is relatively new for us so we’re mostly going outside and asking for help, and it’s the same team that is open to be working with anyone.

Is it technology that’s making the difference or is it down to applied knowledge?
For me it comes back to the openness of data and what impacts different systems have. We’re constantly seeing new data, which gives us new insight into where to prioritise actions. It is really useful because, three years ago, companies like us would be looking at where to start. With the availability of data, we now know by sourced ingredient – and we’re very close to knowing by product SKU – what our impact is. That’s incredibly powerful to point you in the right direction.

The other thing that’s happening is technology solutions – whether around energy, extraction, mining or carbon capture, they are really coming through fast. Our job is almost to bring the ecosystems together – the data, the science, the technology, the partnerships with our suppliers and their peers, sometimes they can be educational authorities, sometimes they are specialist research institutions.

You’re very passionate about data...
Well, it’s such an unlock. It’s helps you go from swimming aimlessly in a sea, treading water and not moving anywhere, to actually getting to a place. The data systems we now see in agriculture – data systems tracking and tracing products through complex supply chains – are increasingly where data makes an impact and affects products and ingredients. That, combined with research and science in this space, is a massive facilitator and accelerator of change. And for much of it, the agricultural piece and the climate piece, though they’re linked in impact, the solutions are going to come from outside. Therefore, how open are we and how insightful we are to what’s happening around us becomes critical.

What’s the current challenge left to tackle? Where are you still struggling?
Lots of areas! We’re vocal about our work because we want to incentivise change, not because we’ve reached the end point. Nowhere have we reached the end point, whether it’s in plastics, nature, social or climate. If peer companies can do the same as us, it will be dramatically more powerful and faster than if we try to do it alone. Our 10-year commitments were launched at the start of this year.

We need help from our peers to improve regulatory controls so we audit and regulate in a better way, using more science, and we advocate for more money coming into this field so things are more sustainable. It’s as much a plea for help as a plea for coming onboard: not for what we need as Unilever, but for what we need as citizens.

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