Unilever reported a 15% increase last year in emissions from consumers’ use of hairsprays, body sprays and deodorants.
(Bloomberg) — Unilever Plc has over the past decade earned a reputation for obsessing about the environmental, social and governance (ESG) aspects of its business. But last year, the company saw a 2% increase in greenhouse gas emissions tied to its net zero goals, thanks to higher raw material costs and increased use of products like deodorant and hairspray.
For all of 2022, Unilever reported a 13% decrease in Scope 1 and 2 emissions, or those derived from its own activity and from purchased energy. For Scope 3 emissions, which come from the company’s value chain, Unilever saw reductions in emissions from packaging materials, logistics and the use of more efficient ice cream freezers. But those improvements were offset by a 15% increase in emissions from “direct consumer use (HFC propellants),” a category that includes hairsprays, body sprays and deodorants and was led by growth in the US.
Unilever’s 2022 financial performance backs up the idea that customers are enjoying a post-pandemic return to toiletries. Boosted in part by higher pricing, the company saw a 7.8% increase in sales from its beauty and wellness division last year, a category that includes skin and hair products; Unilever also saw a 7.9% increase in its personal care division, where reduced demand for skin cleansing products was offset by higher demand for deodorant.
Unilever Chief Executive Officer Alan Jope, like his predecessor Paul Polman, has been focused on the company’s environmental footprint. The maker of Hellmann’s mayonnaise and Axe body spray aims to reach net zero in its operations by 2030 and across its value chain by 2039. Since 2010, the company says it has reduced the greenhouse gas impact of its products across their lifecycle by 19%.
Still, some Unilever shareholders have called for a greater focus on financial performance. Shares have risen just 2% during Jope’s tenure, which started in January 2019. In July, he will be succeeded as CEO by Hein Schumacher, who currently runs dairy cooperative Royal FrieslandCampina.
For large consumer conglomerates like Unilever, emissions from raw materials are proving a major challenge in wider net zero goals, as reducing them requires working with thousands of different suppliers. Almost 60% of emissions included in Unilever’s net zero target last year came from raw materials, where emissions rose 4%.
Unilever is also working towards using 25% recycled plastic in its packaging by 2025, and halving food waste in its operations over 2019, also by 2025. Last year, the company saw a 17% reduction in food waste over 2019 levels.
–With assistance from Akshat Rathi.
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