Better livelihoods

450,000 smallholder farmers trained; smallholders’ metric in development; 48,000 small–scale Shakti distributors by the end 2012

Our commitment

By 2020 we will engage with at least 500,000 smallholder farmers and 75,000 small-scale distributors in our supply network.

Our performance

We have increased the number of tea farmers trained in sustainable practices to around 450,000. The next step is to develop a methodology to assess improvement in smallholder livelihoods. We have consolidated our small-scale distributors programme, reaching 48,000 entrepreneurs.

What matters most

For the Better livelihoods commitment we have one target that is most material to us; Smallholder farmers. (M) indicates our most material targets.

  • achieved: 0
  • on-plan: 2
  • off-plan: 0
  • %of target achieved: 0

Our perspective

Our business contributes to the economic well-being of many communities across our value chain, whether through employment, up skilling or linkage into our extended supply chain.

In developing and emerging markets we have an even greater impact on livelihoods. This is because our supplier and distribution networks involve millions of small-scale farmers, distributors and retailers. Most smallholder farmers grow their crops on less than 2 hectares of land. They are often held back from improving their incomes because of their lack of knowledge of up-to-date farming practices. If smallholders have access to training, better quality seeds and fertiliser they can significantly increase their yields. This benefits Unilever. As we grow our business in developing and emerging markets, we will be sourcing more agricultural materials grown by smallholders. If they prosper and their incomes improve, they will be able to invest and we will have greater certainty of supply and, often, better quality raw materials for our food products.

Investing in smallholders

We have expanded the number of smallholders we reach with training and increased our investment. But we still have much to do to demonstrate the impact of our work on their livelihoods, and how we are engaging with women farmers. Smallholders and their practices are diverse which makes the task of measuring the benefits of our interventions more difficult. Nevertheless we want to co-develop a simple, cost-effective method to show that our interventions do improve smallholders’ livelihoods.

As the world’s largest purchaser of black tea we led the way with Rainforest Alliance to certify our tea supply. We are now purchasing cocoa certified by Rainforest Alliance and we are part of the Roundtable on Sustainable Palm Oil’s (RSPO) Smallholders Task Force where we are collectively working on how best to achieve sustainable certification for palm oil smallholders.

Unilever is committed to respecting and promoting human rights and good labour practices. The adoption of the United Nations Guiding Principles on Business and Human Rights has led us to re-think how we should integrate human and labour rights strategies across our business and value chain. To tackle this, in early 2013 we created a new role of Global Vice President for Social Impact. We recognise that we have more work to do in this area.

Boosting women's incomes

The impact of economically empowering women has a magnifier effect on lifting families out of poverty. For example, in India, as a result of a partnership between the Maharashtra government and Hindustan Unilever, a woman entrepreneur was able to invest in a tomato processing plant, contracting supplies from 600 smallholder farmers. We trained the farmers in sustainable agricultural practices which contributed to high-quality tomatoes for our Kissan Ketchup brand. In our Shakti rural sales operation, earnings usually double household incomes. For many, these new earnings mean they can realise their ambition to provide a good education for their children.

Better livelihoods

Sustainable, profitable growth depends on our people

We expect all our employees to observe high standards of behaviour in their everyday work, reflecting our values of integrity, respect, responsibility and demonstrating a pioneering spirit. Sustainable, profitable growth can only be achieved if we have the right people working for an organisation that is fit to win, underpinned by a culture in which performance is always aligned to our values.

Human & labour rights

Our Code of Business Principles and Supplier Code set out our commitment to human and labour rights and specifically to treat our employees and business partners with dignity, integrity and fairness.

The Board of Unilever is responsible for ensuring adherence to these commitments and our senior management has responsibility for overseeing their implementation and ensuring that any breaches of our Codes are investigated. We expect and encourage employees to bring any breach of our Codes to our attention.

Like many other companies, we have been undertaking a comprehensive assessment of how best to operationalise and implement the UN Guiding Principles on Business and Human Rights, including reviewing our Code Policies and ensuring alignment with our Sustainable Living Plan. In early 2013 we appointed a Global Vice President for Social Impact to lead this integration. This assessment was also informed by a two-year research project by Oxfam, Labour Rights in Unilever’s  Supply Chain, published in early 2013. Oxfam used our Vietnamese operations as its main case study and made six recommendations for our business.

These are based around supporting workers’ livelihoods, providing human rights training within the organisation, implementing more ways in which workers can raise areas of concern and working closely with suppliers and partners to ensure standards are met. We are reviewing our Vietnamese supply chain in light of the recommendations.

The report also has implications for our business globally and we are studying how we can promote sustainable livelihoods for all our workers and those in our value chains and will review our use of temporary workers. We will look at our suppliers’ understanding of our Supplier Code and ensure that our own operations meet the same standards as we expect of our suppliers. We will also develop key performance indicators on labour and human rights.

Recognising that progress can best be made by working together, we will work with others including industry, NGOs, trade unions and business partners to mainstream the integration of human and labour rights into our business.

Diversity

We celebrate the diversity of people, believe in inclusion and respect people for who they are and what they bring. Women make up more than 75% of our consumer base. Our workforce must take account of this.

The proportion of women in management positions increased from 39% in 2011 to 41% in 2012. After a decade of steady improvement, achieving an increase of more than 1% shows progress – but we recognise there is still a long way to go. We have three women Non-Executive Directors on the Board (25%) and propose to appoint two more in 2013. In 2012 we appointed a second woman to the Unilever Leadership Executive.

Helping smallholder farmers (M)

  • Our goal is to engage with at least 500,000 smallholder farmers in our supply network. We will help them improve their agricultural practices and thus enable them to become more competitive. By doing so we will improve the quality of their livelihoods.
  • We continue to engage with partners to develop an effective methodology to assess improvement in livelihoods in our supply chain network.

More on helping smallholder farmers

Our Perspective

Farmer at work collecting onionsThrough our supply partnerships we have helped to train 450,000 tea farmers in sustainable practices, around 150,000 more than in 2011. Over 300,000 of them have achieved Rainforest Alliance certification, the majority of whom are smallholders in Kenya. Elsewhere we have supported cocoa farmers to gain Rainforest Alliance certification in West Africa.

We are focusing our effort on interventions which improve agricultural practices. We want to demonstrate that these enhance livelihoods. Having examined existing assessment methodologies, we decided to consult NGO and supply chain partners on how to develop a livelihood assessment methodology which is simple, quick and affordable. Our goal is to develop and test this methodology in 2013.

Although we still have much to do to demonstrate the impact of our work, our procurement standards and our ability to share best practice mean we can have an important influence on the wider sector. In our Sunrise partnership with Oxfam GB, we have moved from a single programme to learning by engaging with a number of smallholder farmer programmes run by our suppliers. The aim is to develop clear blueprints for inclusive business models, which deliver both commercial success and help improve social, environmental and economic conditions.

Assessing our impact

In 2012 we commissioned an independent assessment to evaluate livelihoods, focusing especially on the impact Rainforest Alliance (RA) certification has had on smallholders and their farm workers in our tea supply chain in Kenya.

The study confirmed that RA-certified farmers and their workers experience greater improvements than non-RA certified farmers in several areas of social, economic and environmental well-being. However this is not uniform, as in some areas, non-certified farmers reported similar positive impacts.

This is a complex area, and we are assessing the results and undertaking other studies with NGOs and other partners to understand the best way to achieve the right outcomes.

Supporting small-scale distributors

  • Shakti, our door-to-door selling operation in India, provides work for large numbers of people in poor rural communities. We will increase the number of Shakti entrepreneurs that we recruit, train and employ from 45,000 in 2010 to 75,000 in 2015. We operate similar schemes in Bangladesh, Sri Lanka and Vietnam which we are also committed to expanding.

  • 48,000 entrepreneurs (‘Shakti ammas’) were selling products to over 3.3 million households in over 135,000 Indian villages in 2012.

More on supporting small-scale distributors

Our Perspective

Recruiting and training female entrepreneurs (Shakti ammas) is a resource intensive process. During 2012 we worked with our existing entrepreneurs to help them grow and develop their businesses. This has helped to consolidate and strengthen our network.

We are planning to expand our rural distribution over 2013-15 to reach more small, remote villages. Engaging more Shakti ammas is an important part of this plan.

Shakti sales people have proved successful in increasing our presence in rural areas and building strong local relationships with consumers, which encourages brand loyalty. The model we use improves the lives of our sales people and their families, usually doubling the income of the household.

The programme was extended in 2010 to include ‘Shaktimaans’ who are typically the husbands or brothers of the Shakti ammas. They sell our products by bicycle to surrounding villages, covering a larger area than Shakti ammas can do on foot. There are over 30,000 Shaktimaans across India and we have plans to enlarge the programme in 2013. These 30,000 Shaktimaans complement our 48,000 Shakti ammas.

Technology increases Shakti sales & earnings

Sales woman working in IndiaIn 2012 we improved our Shakti rural selling operation by part-funding mobile phones for a number of our sales women, equipping them with a simple application to drive sales. This low-cost but very effective mobile technology helps them sell the right products, saving time during sales calls while increasing sales and earnings.

† Independently assured by PwC

"We will work with others including industry, NGOs and trade unions mainstream human and labour rights into our business."

Future challenges

For smallholder farmers, our challenge is to develop an effective yet affordable methodology for impact assessment. In some pilot studies, evaluation costs more than the intervention it is assessing. Even then the evidence can be uncertain due to lack of baseline data. We will continue to work with partners such as Oxfam, Grameen and the Bill and Melinda Gates Foundation to refine our understanding of what is practical.

We are working to integrate respect for human and labour rights throughout our value chain, including issues around land rights, women and community dialogue.