Carbon Emissions Mapping at Unilever Europe

Implementing a structural method to map and reduce carbon emissions

Concise summary of this best practice
In 2007, the CEO of Unilever committed to a 25% reduction of CO2 emissions from global manufacturing operations in 2012. Unilever Europe Logistics has aligned to this target. To achieve this objective, the management of European logistics department decided to build a carbon emission estimation methodology to quantify the CO2 emissions, emitted from the sourcing units to the distribution centers. 
In cooperation with the Technical University of Eindhoven, a new methodology was developed that allows transport-buying companies to estimate the CO2 emissions in transport (Özsalih, 2009). A major advantage of developing your own carbon tool is that you can ensure that the tool fits with current working procedures, routines, information streams and data availability. This best practice describes how Unilever Europe managed this. The developed methodology supports Unilever Europe in achieving their ambitious sustainability targets.

Key terms
Methodology development, mapping carbon dioxide emissions, sustainability, calculation methods, emission reduction opportunities.

Relevant for
Transport-buying companies, transportation companies (3PL’s and 4PL’s) and shippers.

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The impact of business on climate change
Sustainability is receiving lots of attention lately, especially in the transportation business. Freight transport has a large impact on climate change, mostly through the emissions of greenhouse gases. Still, the impact from transport on the climate increases. This is due to a combination of (at least) four causes: Firstly, the transportation sector as a whole is growing due to increasing consumptions. Secondly, the distances that products travel are increasing, due to globalization and home delivery. Thirdly, inventory reduction strategies (such as ‘just in time’ or ‘economic order quantities’) may also increase CO2 emissions per ton-km. In these methods or calculations, the objectives are optimized delivery times or reduced investments at a certain service level, but the sustainability targets or the efficiency of transportation are not explicitly taken into account. Fourthly, customer demands (such as short time-to-markets and quick response times) are increasing the use of airfreight and fast-response carriers, which also increases the CO2 emission per ton-km. It can be concluded that, in order to reverse this growth of freight related CO2 emissions, business-as-usual cannot sustain.

At the same time, the climate has an increasing impact on the supply chain. A recent example is the ash cloud about Iceland (April 2009), shutting down international airfreight and passenger transport for several weeks. Thus, supply chain engineers have to take multiple environmental uncertainties into account: increased risks for disruptions, lawsuit risks, upcoming carbon regulatory compliances, etc. Moreover, customers (and investors) are ever more interested in the well-being of the environment, and increasingly demand their suppliers (and investments) to be eco-friendly. When companies take the lead to mitigate corporate carbon risks, stakeholder value can increase and market share can be gained.

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Key terms: 
Carbon Emissions
Transportation
Sustainable

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Target industry sector

  • Process industry (chemical and other)
  • Pharmaceutical industry / Health Care
  • Capital goods industry, especially service parts logistics
  • Retail & Internet / E-commerce
  • Consumer packaged goods
  • Mass assembly
  • High-tech (consumer electronics, semiconductors, contract manufacturing, communications)
  • Logistics service providers

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