Saving through sustainable sourcing: understand how and where you're spending money
How Unilever embraced ethical procurement and saved $1.5B
With a network of suppliers across 190 countries, Unilever faces a mammoth task to ensure suppliers — and their suppliers — align with their corporate values and ESG frameworks.
A recent announcement that they have saved $1.5 billion since 2008 thanks to sustainable sourcing reflects that embracing ethical procurement and sustainable practices do not necessarily result in increased costs.
Given the sheer size of their supply chains, three elements have been key to balancing consumer innovation, a commitment to positive social and environmental impact, and a boost to the bottom line.
1. They take suppliers with them
Unilever recognizes the critical role of every partner in their supply chain to the value, capacity and growth of their brand — and mutual growth is encouraged. Resources and training support suppliers to understand and commit to Unilever's responsible sourcing, sustainability and human rights standards.
Unilever sets clear targets for sustainable sourcing, recyclable plastic usage, and safe and fair working environments — and prioritizes suppliers with shared values of respect, responsibility and sustainability. Clearly articulating and applying these targets create a clear understanding of the expectations for Unilever suppliers.
2. They lead by example
Setting its first science-based emission reduction targets in 2010, Unilever has set out to be a sustainability leader. Current goals include:
net-zero emissions from Unilever products by 2039
no deforestation in its supply chain by 2023
prioritizing suppliers with their own evidence-based emission reduction targets.
Unilever now ties supplier emission tracking to invoicing as part of reducing the supply chain footprint. They have built a system where suppliers declare their own carbon footprint meet company standards — upping visibility into supplier ESG in their procurement platform.
3. They use data and spend intelligence
It’s no accident that Unilever has saved $1.5 billion through sustainable outsourcing. Data has driven the process every step of the way from onboarding of suppliers to contract management.
Spend intelligence has empowered Unilever to realize the benefits of partnering with ethical suppliers: using metrics like ownership, governance, carbon offsets, modern slavery positions, and performance.
Data in the hands of powerful AI solutions helps organizations understand how and where they're spending money. You might see cost savings like Unilever, but also have the chance to enhance supplier compliance, limit risk and deliver whole of supply chain insights.
5 ways spend intelligence enhances procurement
With the CDP estimating $120 billion in environmental risks to the supply chain in the next five years, it’s critical organizations have visibility across their own suppliers.
Onboarding - simplify vetting and onboarding suppliers with an AI-powered platform
Contract negotiation - negotiate with access to comprehensive supplier data
Payment optimization - instant access to identify payment trends and issues at a glance
Contract compliance - a full view of suppliers meeting their contract obligations
Corporate reporting - comprehensive dashboard and advanced analytics tools
Do you have the technology?
Spend intelligence is non-negotiable for organizations trying to raise the bar for suppliers, consumers and the planet. Reduce costs, boost productivity and lead the way on ESG with the right platform enhancing your procurement processes. Download our latest whitepaper to learn more.
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