2000 Social Review of 1999 Data_tcm13-5331

8/8/2019 2000 Social Review of 1999 Data_tcm13-5331

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Unilevers approachto corporate socialresponsibility

Social Review 2000

Our Annual Review and Environment Performance Report (including summary PDF) are also available at Unilever.com
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2/26For more information see Environment & Society at www.unilever.com

Chairmen of Unilever

Corporate social responsibility (CSR) in Unilever encompassesa broad range of interactions with society. It meansresponsibly managing a mult iplicity of relationships every daywith employees, consumers, shareholders, suppliers,governments, local communities and many others in widersociety. Our commitment to high standards of corporatebehaviour is an integral part of our operating tradition. It isspelled out in our Code of Business Principlesand is implicitin many of our business practices.

We recognise the need to be more explicit about whatthat commitment actually means in practice, articulatingour policies and demonstrating performance. Unileveris a decentralised company, operating in highly competitivemarkets around the world. Local responsibility is fundamentalto our operating tradition and a cornerstone of our success.Bringing together clear social performance informationfrom widely different societies poses many challenges inpresenting a Unilever-wide account of our activities.

That is why during 1999 and 2000, nine Unilever companies

in different parts of the world, accounting for more thana quarter of the whole business, tested a framework toevaluate and manage their performance in CSR.

We also recognise that societys expectations are changingthat we are increasingly being called upon to play a moreactive social role, to be open about our social impact andto work towards a sustainable future. The result is this firstinternational Social Reviewof Unilevers approach to CSR.

Antony Burgmans Niall FitzGerald

Chairmens introductionUnileversCorporate Purposeleaves no room for ambiguity about our

commitment to corporate social responsibility: We believe that to succeedrequires the highest standards of corporate behaviour towards ouremployees, consumers and the societies and world in which we live.That is also our personal belief too.

The purpose of the Review is threefold. It introduces Unileverand explains what CSR means for us (Setting the scene).It maps current policies and practices of economic and socialimpact in our operations and illustrates these with examplesdrawn from local company activities (A f irst review). Crucially,it provides us with a baseline from which to set milestonesfor future activities (Going forward).

ThisSocial Review is a companion document to ourEnvironmental Performance 2000report and builds on theconsiderable progress made over the last five years inmanaging our global environmental impact. EnvironmentalPerformance 2000also provides information on ourcommitment to sustainable development, in particular, thework we do on sustainable agriculture, water stewardshipand renewable marine stocks.

The milestones we have set for progress reflect the earlystage we are at in reporting on our social performance.We are still learning the lessons from our project work andfinding ways to develop a consistent approach that respects

our mult i-local operating structure. We dont claim to haveall the answers, but we do aim to be as professional inour management of our social responsibilities as we are in anyother area of our business. We are open to dialogue, andwilling to share our experience, to listen and to learn from themany different groups who have an interest in our business.

Thank you for taking an interest in thisReview. Please tell uswhat you thinkwe welcome your views.
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Unilever is a multi-local mult inational company. Our productsare on sale in over 150 countries. So thisReviewcan only offeran initial insight, explain our overall approach and provideillustrations of our policies, performance and local action.

Key points of our performance include:

we meet consumers basic needs for food and home andpersonal care: over 150 million consumers choose ourproducts every day; in many countries, virtually everyhousehold uses one or more Unilever products;

in 1999 Unilevers 255,000 employees received the largestshare of the cash value added created by our operations;

accidents in the workplace have been cut by twothirds over the period 1996 to 1999; we oppose under-ageworking and fully comply with International LabourOrganisation Conventions on Minimum Working Age;

we encourage diversity in our employment practices: ourtop 300 managers are drawn from 33 countries; a growingproportion (21%) are womenup almost 100% since 1992.We recognise the need to promote more women to themost senior levels of the company;

we are committed to the goal of sustainable development,fund research into sustainable agriculture, waterstewardship and renewable marine stocks, and havebeen cited by the Dow Jones Sustainability Group Indexesas an industry group leader;

OverviewThisReviewseeks to present Unilevers approach to corporate social

responsibility, highlights key elements of our performance to date andstarts to map the way forward.

worldwide we invest around 1% of pre-tax profits incommunity programmes through our voluntarycontributions; we are founder signatories to the UnitedNations Global Compact which commits us to ninekey principles in human rights, labour and environmentalpractice.

The detailed performance data in this Review refer mainly

to 1999 and wherever possible relate to overall Unileverperformance. The case studies are drawn primarily, butnot exclusively, from a CSR pilot project conducted in ninecountries during 1999 and 2000. This project tested anew framework based on a self-assessment methodology,which enabled companies to audit and report theirCSR performance. In planning and executing this project,we have been assisted by The Corporate CitizenshipCompany, a specialist consultancy in corporate socialresponsibility. It has also supported the preparationof this Review.

We have sought to make clear the values and standardswhich underlie our approach, to indicate where possibleour global performance, and to illustrate our activity withexamples from various countries around the world.

Wherever possible, we provide links to Unilevers websitewww.unilever.com(and to external sites as appropriate)where further detailed information is available on the issuesbeing discussed.
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Chairmens introductionOverview

Setting the scene1 Introducing Unilever

About the company, our history andthe nature of the business today

2 Key facts about UnileverBusiness data by region and productarea, showing the size, global scopeand diversity of the business

3 Our Corporate PurposeandBusiness PrinciplesThe framework of values andstandards on which Unilevers

approach to corporate socialresponsibility is based

4 Unilevers approach to corporatesocial responsibilityDefinit ion of what corporate socialresponsibility means for Unileverand explanation of our pilot projectto review management processesfor CSR

A first review5 Creating wealth

Profits and a competitive totalshareholder return underpincontinued growth and benefit allthose with an interest in thebusiness

6 adding value, sharing wealthHow the cash value added by ouroperations is distributed amongstakeholders

Contents

7 Setting high standards incorporate behaviourA positive assurance processunderpins our Code of BusinessPrinciples

8 A safe and secure workplaceGlobal standards in safety, healthand the environment have helped toachieve year-on-year improvements

9 Investing in peopleCompetitive rewards, good training

and support for employees areessential for future business success

10 Respect and dignity in theworkplaceTransparency and respectfulbehaviour are fundamental elementsof Unilevers approach to corporatesocial responsibility

11 Valuing diversityWith more than 100 nationalitiesamong our employees, diversityis a cornerstone of our company

12 Meeting everyday needsEvery day around the world millionsof consumers choose Unileverproducts to meet their needs

13 for consumers everywhereWe offer affordable products andserve broad markets

14 Committed to quality and safetyFrom manufacture, through productuse to eventual disposal, human andenvironmental safety is paramount

15 Responsible promotionHigh standards and social sensitivitycharacterise our approach to productpromotion

16 Working towards a sustainablefuture Unilevers commitment

to sustainability is focused onmajor initiatives in agriculture,fish and water

17 and engaging withenvironmental concernsWe listen to consumers and workwith industry, governments andothers to address their concerns

18 Investing in communitiesPart of being a trusted corporatecitizen is making a voluntarycontribution to local communitiesthrough charities and not-for-profitpartnerships

Going forward19 The way ahead

Our plans to enhance themanagement and reporting ofcorporate social responsibility

Tell us what you thinkHow to get in touch
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Unilever is one of the largest consumer goods businessesin the world. Based on our 1999 sales of over 140 billion($43 billion), Fortune Magazineranked us 54th by sales in it sGlobal 500 listing. In 1999 we employed an average of255,000 people. Today our food and home and personal carebrands are on sale in over 150 countries. By the very nature ofour business in cleaning, grooming and feeding people, oursuccess depends on our companies being close to consumersand deeply rooted in the societies in which we operate.

At the global level, Liptontea and Dovesoap are among theworld leaders. Other well-known brands with wide appealare Knorr, Becel, Magnum, Lux, Omoand Cif. WorldwideUnilever has an extensive range of outstanding brandsfor consumers to choose from. As we go forward, we willincreasingly focus on 400 leading brands that have distinctiveconsumer appeal.

Unilevers rootsgo back more than a century. Margarine wasfirst produced commercially in the Netherlands in the 1870sand by 1927 two early manufacturers, Jurgens and Van denBergh, decided to merge their operations to form Margarine

Unie. Meanwhile, in the UK, William Hesketh Lever foundedhis company, Lever Brothers, in 1885 and soon establishedsoap factories around the world. In 1917, he began todiversify into foods, acquiring f ish, ice cream and cannedfood businesses. The Unilever Group came together in 1930through the merger of Margarine Unie and Lever Brothers.Since then Unilever has operated as one. Although there arestill two parent companies, Unilever N.V. and Unilever PLC,they are linked by a series of agreements, follow commonpolicies and have the same directors.

Introducing UnileverUnilever is a successful international company with a strong historical

commitment to corporate social responsibilitya commitment we seekto honour every day through our diverse operations around the world.

The founders of both the Dutch and British companies hadstrong values and a clear commitment to corporatesocial responsibility. W H Lever built a pioneering gardenvillage for his workers at Port Sunlight in the UK. Heintroduced a shorter working week and offered innovativewelfare schemes, such as pensions, sickness insuranceand paid holidays. The entrepreneurial spirit of the founders

and their concerned approach to employees andtheir communities remain at the heart of Unilever today.

Over the years, Unilever has always operated in competitiveworld markets and this has necessitated continual changeand adaptation. In August 2000 we announced our intentionto re-organise the Group on the basis of two global divisions,one focusing on foods and the other on home and personalcare products, effective from January 2001.

Within these new global divisions are the many individualoperating companies which remain the fundamental buildingblocks of todays Unilever. They serve distinctive local marketswith a wide range of consumer products and do businesswithin a framework of considerable devolved responsibility.

Their freedom to operate is set within the commonvalues of our Corporate Purposeand the high standards ofour Code of Business Principleswhich provide a strongcommitment to ethical behaviour and social responsibility.

ThisReviewaims to give an account of how our individualcompanies and the Group as a whole live out thatcommitment every day around the world.

1 Social Review 2000Setting the scene
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Unilever does business in intensively competit ive markets for fast moving

consumer goods with competitors that are local, regional and global.

Employees, business assets and consumers are spread all across the world.

Charts 1-7 provide basic factual information about Unilever in 1999: our

size, product profile, global scope and diversity of our employees as the

context in which to understand our CSR (corporate social responsibili ty).

Figures are calculated at average exchange rates current for the year.

Turnover

In 1999 our turnover was140,977 ($43,650) million, level with the previous

year (Charts 1 & 5).

Key facts about UnileverUnilever is a truly multi-local multinational, deeply rooted in local cultures

and with consumers, employees and assets spread around the world.

Profits

In 1999 our operating profit before exceptional items (bei) was 14,572

($4,871) mill ion, an increase of 5% on the previous year (Charts 2 & 6).

Profit on ordinary activities before tax was14,341 ($4,624) million whilenet profit after tax was12,771 ($2,952) million.

Assets and capital expenditure

In 1999 the value of our net operating assets was19,266 ($9,308) million,

while capital expenditure totalled 11,305 ($1,390) million (Charts 3 & 4).

Employees

During 1999 Unilever had on average 255,000 employees. The steady

decline in employment over the last five years is largely due to business

restructuring, including the sale of our speciality chemicals business in

1997, and the impact of technical innovation (Chart 7).


1999 by product area

Chart 5

Turnover %

Chart 6

Operating profit %*

Foods

Home care and professional cleaning

Personal care

Trading operations

22

2

50

26

* bei = before exceptional items

19

2

44

35

Chart 7

Employees by geographical region 1995-1999 (000s)

Average number of

employees in: 1995 1996 1997 1998 1999

Europe 103 102 93 83 79

North America 29 29 27 23 22

Africa & Middle East 70 68 61 58 52

Asia & Pacific 77 77 76 73 72

Latin America 29 30 30 30 30

Totals 308 306 287 267 255

1999 by geographical area

Chart 4

Capital expenditure %

Chart 1

Turnover %

Chart 2

Operating profit %*

Europe

North America

Africa & Middle East

Asia & Pacific

Latin America

22

6

46

16

* bei = before exceptional items

10

21

650

14

9

Chart 3

Net operating assets %

22

9

37

16

16

17

753

11

12



Unilever operates a decentralised structure around the world.So it is vital that everyone who works within the organisationhas a shared purpose that binds the company together andmotivates all Unilever employees towards our common aims.

That is why we drew up a statement of Corporate Purposefirst articulated in 1996. The clear expression of ourCorporate Purposewas not to invent something new, but

rather to reveal the essence of the company. The statementof Corporate Purposedescribes what Unilever aspires to be,as well as expressing its values and beliefs. It is a startingpoint that gives a reference by which we can evaluate ourperformance, and the direction for continually improving it.

Our Code of Business Principlessets the framework for ourworldwide operational standards, covering issues suchas employee health and safety, product quality, relations withgovernments, ethical behaviour and environmental impact.It is a core Unilever statement and we consider it essentialthat all employees understand and comply with its standards.The Codeis currently being reviewed and will be revised totake into account, among other things, the OECDs recently

updated Guidelines for Multinational Enterprises, publishedin June 2000.

Taken together, these documents provide a baseline fromwhich we can start to give definition to our corporate socialresponsibility. Our approach is that first and foremost weshould aim to demonstrate that we live out the undertakingsof the Corporate Purposeand Code of Business Principles.We believe that these commitments are not just anexpression of our values, but that in living them out they

contribute to our success.Over the years Unilever has made a number of acquisitions.Many of these have enriched our values, contributing to theevolution of our operating practice and corporate behaviour.During 2000, Unilever acquisitions included Bestfoods,Slim.Fast and Ben & Jerrys Homemade ice cream and wewill take the opportunity to learn from their accomplishmentsin corporate social responsibility. At Ben & Jerrys we arecommitted to delivering on its distinctiveSocial Missionasthe company grows to become an international business.

Our Corporate Purposeand Business PrinciplesA commitment to the highest standards of business behaviour is

at the heart of UnileversCorporate Purposeand is made explicit in ourCode of Business Principles.

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Unilevers Corporate PurposeOur purpose in Unilever is to meet the everyday needs of peopleeverywhereto anticipate the aspirations of our consumers and customersand to respond creatively and competitively with branded products andservices which raise the quality of life.

Our deep roots in local cultures and markets around the world are ourunparalleled inheritance and the foundation for our future growth. We willbring our wealth of knowledge and international expertise to the serviceof local consumersa truly multi-local multinational.

Our long-term success requires a total commitment to exceptional standardsof performance and productivity, to working together effectively and to awillingness to embrace new ideas and learn continuously.

We believe that to succeed requires the highest standards of corporatebehaviour towards our employees, consumers and the societies and worldin which we live.

This is Unilevers road to sustainable, profitable growth for our businessand long-term value creation for our shareholders and employees.

3.1 Social Review 2000Setting t he scene


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The definitions and scope of CSR are much debated.The starting point we have taken in developing Unileversapproach is that CSR covers the companys impact on,or interaction w ith, society in three distinct areas. These are:the companys own operations; the companys relationshipswith its business partners through the value chain;and the voluntary or philanthropic contributions it makesto communities (Chart 8). We believe CSR should be seenas a core business activity.

In 1998 we began the process of developing, from thisvery broad definition, a methodology for measuring andmanaging Unilevers performance. A f ramework for ourapproach was created based on how CSR is demonstratedthrough our many and varied day-to-day relationships withsociety. Seven part icular stakeholder groups were identified:shareholders; employees; consumers; suppliers andtrade customers as business partners; government; thelocal communities and societies where we do business;academics and others with whom we conduct research.

There is also widespread interest in society in businesssimpact on the environment and its willingness to participatein efforts to mitigate negative environmental consequences.We have therefore included in thisReviewhow weengage with society in support of our environmentalcommitments. (An overview of our environmental policyand performance can be found at the Environment sectionof www.unilever.com.)

During 1999 and 2000 we trialled the methodology in apilot project involving Unilever operating companies in nine

Unilevers approach to corporate socialresponsibility

Based on our values and relationships with our stakeholders Unileveris developing a systematic approach to managing CSR across widelydiverse societies.

countries. Together the pilot project countries representapproximately a quarter of Unilevers worldwide sales.Countries and companies were chosen to represent thediversity of Unilever: some long-established in the developedeconomies, such as Canada, the Netherlands and UK; othersfrom the newly industrialised economies, such as Brazil andTurkey; significant businesses in the developing world wererepresented by Ghana and India; and Poland and Vietnamwere included as new companies in societies moving fromcommand to free market economies.

Each country completed a comprehensive self-assessmentmanual, which enabled it to review in depth how it lives outUnilevers values in practice, measuring, benchmarking andcritically assessing its performance.

ThisSocial Reviewdraws on data which Unilever regularlycollects and aggregates on a worldwide basis, supplementedby information and case studies taken from the pilot countries.The following section A first reviewtakes a broad look atUnilevers performance in the context of our relationships

with our stakeholders. It maps out our major areas of socialinteraction: wealth creation; employment values and practices;consumer commitment; and our responsibilities towards theenvironment and the communities in which we operate.

We are still learning f rom the findings of the pilot project, andwill continue to experiment with how and what we measure,what is usefully monitored and reported at an internationallevel, and what is best kept local. The concluding section Theway aheaddescribes how we plan to go forward, buildingon our learning and improving our performance.


Voluntarycontributions

Impact through value chain

Chart 8

Three levels of corporate social responsibility

CSR is theimpact of

the businesson society

Voluntary contributions made to the communityand wider society, of ten in partnership wit hnot-f or-profit organisations, are the visibletip of the iceberg of t he much larger impactof business operations

The most important impact on societyis through a businesss direct operations

A wider indirect impact along the value chain,from suppliers through trade customers to consumers

Impact of operations
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By meeting the needs of our consumers worldwide, Unileversbranded products and services help to raise living standardsand improve the quality of life. Our activities create wealthfor the many hundreds of thousands of people with a stakein the business, including our direct employees, suppliers andcustomers. They also include our shareholders, whether directprivate investors or individuals benefiting from pension fundsand other institutional holders of our shares.

Shareholders need to receive a competit ive rate of returnon their investment, otherwise we will not be able to raisecapital cost-effectively to invest in sustaining the growthof the business and the livelihoods of those working for us.We have set ourselves the target of being in the top thirdfor total shareholder return (TSR) compared to a referencegroup of 20 other international consumer goods companies.TSR combines share price appreciation and dividends paidto show a total return to the shareholder, calculated overa three-year rolling period.

During 1999 we met this performance goal (Chart 9). However,

in 1999 share prices in our sector as a whole suffered asinvestor interest focused on technology and internet stocks.In addition the market marked us down because of ourresponse to competitive moves in the laundry market in southLatin America. These factors led to a particularly sharpdecline in the Unilever share price during the fourth quarter.If measured over the single year, we would be below ourTSR benchmark. We continue to focus our efforts to enhanceshareholder value.

Creating wealthUnilevers continued profitable growth creates wealth for all those around

the world with a stake in the business. Among them, international and localshareholders must receive a competitive return if we are to raise the fundsneeded for investmentin our brands, innovation, our people and factoriesand so sustain our growth.

Most companies in the Unilever Group are wholly owned.However, in around 20 countries Unilever shares ownershipwith local partners and investors, itself directly owningbetween 40% and 90% of the equity.

In nine of these countries, including Ghana, Indonesia andNigeria, shares in local Unilever Group companies are quoted

on the national stock market, so many individuals directlyshare in the wealth created in their country. In India,Hindustan Lever Ltd (HLL) is quoted on the Mumbai stockmarket and had 360,000 shareholders during 1999, withequity evenly distributed between individuals and institutions(Chart 10). Over 12,000 shareholders attended HLLs 1999Annual General Meeting (AGM), while in Ghana, AGMattendance was over 3,200.

The shares of the Unilever parent companies are listed onseveral international stock exchanges. Unilever N.V. shares arelisted on the Amsterdam, London, Swiss and other Europeanstock markets; PLC shares are listed on the London market;and both companies have listings in New York. It is estimated

that two thirds of Unilever shares (N.V. and PLC combined)are held in Europe, with one in five held in the USA (Chart11). The proportion of Unilever shares estimated to be heldoutside the four countries in the chart has almost doubledsince 1995, from 7% to 13%, reinforcing in its shareholdingthe international nature of the company.

5 Social Review 2000A first review

Chart 11

Geographical distribution

of Unilevers combined shares

in 1999 (estimated)

The reference group, including

Unilever, consists of 21 companies

Chart 9

Unilevers TSR position relative

to the reference group

07

14

21

%

UK 40

Netherlands 26

United States 17

Switzerland 4

Others 13

95 99989796

13

4

17

26

40

Chart 10

Distribut ion of Hindustan Lever

equity 1999

%

Unilever 51.5

Institut ional shareholders 24.5

Individual shareholders 24

24

24.5

51.5
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Companies such as Unilever are legally required to publishfinancial statements including a profit and loss account,which presents the success of the business in terms of profitsgenerated and dividends paid to shareholders. However, suchstatements cannot show the breadth of our economic impactaround the world nor the extent to which other stakeholdersshare very considerably in the wealth we create.

A cash value added statement looks at the wealth createdby the business after subtracting the cost of bought-ingoods and services from total sales. It shows how the cashgenerated is distributed amongst our stakeholders.

The cash value added statement shown in Chart 12 givesa snapshot of the value which our operations add to theraw materials, goods and services we purchase fromsuppliers. It shows how that cash value is distributed duringthe year to employees, governments, providers of capitaland local communities. Some is retained in the business orinvested for growththat is, for the benefit of stakeholdersin the future.

In 1999, Unilevers employees worldwide received the largestshare of our cash value added, while shareholders andlenders received one eighth through dividends and interestpaid (Chart 13). The share attributed to local communitiesrepresents only our voluntary community contribution andnot, for example, local taxes (see Investing in communities).

Our full economic impact in countries and local communitiesis extensive, encompassing taxes paid to governmentsand the many jobs supported in the supply and distributionchains. The 11,443 ($1,538) million shown in Chart 12

adding value, sharing wealthUnilevers operations add value by efficiently processing raw materials

and effectively marketing branded products and services to meet consumersneeds. This value is shared among our many stakeholders worldwide:shareholders, employees, governments and local communities.

as contributed to government revenues is a considerableunderstatement of the total amount governments receiveas a direct result of Unilever operations. For example, salestaxes on many products and payroll taxes are also collectedand paid to governments at a local level; they are notincluded in this analysis.

Unilever companies spent 129,423 ($31,347) million on

purchasing raw materials and services. This expendituresupported several hundred thousand jobs in the supply anddistribution chains beyond our own direct employees. In thepilot country studies, efforts were made to calculate the fullextent of these indirect jobs but the results were not robustenough to make firm extrapolations. We plan to work furtheron this issue.

At present, much Unilever purchasing is from suppliers inthe countries where we do business. In future, this economicimpact will tend to be more concentrated at regional level,as manufacturing responds to intensive competit ive pressuresand is reordered into integrated regional networks behindour brands.

Our manufacturing is being focused on around 150 key siteswith others producing mainly for local markets. As a result,the number of existing manufacturing sites is likely to bereduced by around 100. Such restructuring has been a factof business life for some time and we seek to mitigate itspersonal impact by promoting the long-term employabilityof people through training and the provision of extensiveconsultation and support at closure (see Respect and dignityin the workplace).




6.1 Social Review 2000A first review

Chart 12

Cash value added Unilever Group 1999 5($) million

Cash generated

Customers and consumers

Income from sales1 40,977 (43,650)

Suppliers

Payments for materials and services

raw materials & packaging 17,531 (18,677)

advertising & promotions 5,345 (5,695)

other supplies 6,547 (6,975)

29,423 (31,347)

Cash value added 11,554 (12,303)

Distribut ion of cash value added

Employees

Wages and other benefits2 5,828 (6,209)

Governments

Taxation3 1,443 (1,538)

Providers of capital

Dividend and financing costs4 1,422 (1,515)

Local communities

Voluntary community contributions 44 (47)

Invested in business for future growth

capital expenditure 1,501 (1,599)

acquisitions and disposals 362 (388)net retained in the business 954 (1,007)

2,817 (2,994)

Cash value added distributed 11,554 (12,303)

Notes

1 Excludes sales and value added taxes collected from customers andconsumers and paid to governments.

2 Includes payroll taxes collected from employees and paid to governments.

3 Mainly tax on corporate profits.

4 Excludes a special dividend declared in 1998 but paid in 1999 (effectively

a return of capital arising from the sale of Speciality Chemicals in 1997).

Chart 13

The distribution of Unilevers

cash value added 1999

%

Employees 50.4

Governments 12.5

Providers of capital 12.3

Local communities 0.4

Invested for future growth 24.4

24.4

12.5

12.3

0.4

50.4



The Unilever Code of Business Principlessets the framework forour worldwide operational standards and covers a range ofsocial and ethical issues such as obeying the law, competitionpolicy, product assurance and bribery.

All chairmen of Unilever operating companies andthe presidents of our Business Groups are required to givepositive assurance each year that the standards set out in

the Code of Business Principlesare adhered to. Complianceis regularly audited by Unilevers internal audit function.

Around the world the Code of Business Principlesistranslated into many local languages, given to new andexisting employees, and prominently displayed. Distribut ionprocedures vary to meet local circumstances: for example,some require all employees to sign on receiving a copy; othersrequire managers to pass on an understanding of the Code.

Where issues arise they are referred to operating companychairmen for resolut ion. Where suspected breaches of theCodeare identif ied, each local company has its own localprocedures for identifying and dealing with them. In the UnitedStates, a f ree and confidential phone line enables employeesto raise suspected breaches of the Codeand any other ethicalissues. In Turkey, a separate Business Principles Secretariatoversees the management of values across the business.

The Board of Unilever undertakes that no employee will sufferas a consequence of bringing to their attention, or thatof senior management, a breach or suspected breach of theBusiness Principles.

Unilever companies do business in some countries whereethical standards in society and business can be poor.

Setting high standards in corporate behaviourUnilever seeks to conduct its business with honesty and integrity. Maintaining

a reputation for high standards in corporate behaviour is an asset just as realas our people, factories and brands.


Professor Martin Prozesky, Director ofthe Unilever Foundation for Education& Development, South Africa

UnileversCode of Business Principlessets the framework for our worldwideoperational standards

Managing values in Turkey

Unilever Turkey is one of many Unilever companies to have translated

the Code of Business Principles into the local language. It is distributed

to all employees and new recruits who are informed that they are

personally responsible for reporting incidents or suspected breaches of

the Codeto their superiors or to the Business Principles Secretariat (BPS).The Secretariat is a small group of senior managers, operating within a

regime of strict confidentiality and reporting directly to the chairman

who has ultimate responsibility for ensuring compliance.

The BPS meets quarterly to:

support the chairman and Board in addressing policy issues;

evaluate audit reports from an ethical perspective;

review and advise on specific issues as they arise.

As a consequence we are continually working to improveinternal and external standards.

In a number of countries our companies are active indeveloping an understanding of the need for responsibleand ethical corporate behaviour as an important partof social development. For example, in Brazil Unilever hasbecome a founder member of Instituto Ethos, a new

business-led organisation which seeks to promote ethicalbusiness behaviour and wider corporate social responsibility.In South Africa, Unilever has funded the creation of an ethicscentre at the University of Natal, inaugurated in May 1999.
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Unilevers Safety, Health and Environment Action Committee(SHEACO) mandates global standards in safety, health andthe environment. It aims for continuous improvement inperformance year on year. The Committee draws on expertisefrom all parts of Unilever, thereby achieving a balance betweenour innovation process, supply chain and geography, andappropriate corporate functions, for example occupationalhealth, insurance and our Safety and Environmental AssuranceCentre (SEAC).

SEAC supports the implementation of these standards and otherpolicies in all parts of Unilever. It operates worldwide and isstaffed by specialists in risk management, not employeesinvolved in developing products or technology. This helps toensure their decisions and support are independent ofcommercial considerations. In addition, our Occupational HealthService works with human resources and line management toensure employees safe and effective working without risk tohealth. In 1999 key indicators such as musculo-skeletal disorders,asthma and noise-induced hearing loss were collected to enableus to monitor employee work-related health worldwide.

The global SHEACO standards require that preventive action,reporting and regular auditing procedures are implementedand maintained. Performance on key indicators is rigorouslytracked as we strive towards a goal of zero accidents. In pursuitof this goal our worldwide accident f requency rate (which is abroad measure defined as lost time accidents plus restrictedwork cases per 100,000 man hours) improved every year from1996 to 1999: in 1999, the accident frequency rate was at onethird of the 1996 level (Chart 14). Fatal accidents, among thecompanys own employees on- and off-site and contractorsworkers on-site, have halved over the same period (Chart 15).

These and other indicators are tracked in each facility. Forexample, in 1999 Indias Chhindwara factory won the UnileverPremier Safety Award for the third time. This detergentsfactory operates around the clock and has achieved continuousproduction for more than 5.62 million man hoursover eightyearswithout a single lost time accident. From 1996-2000three Unilever factories in the UK have won business journalManagement Todays Factory of the Year award. 2000s

winnerElida Fabergs deodorants factorywas particularlycommended by the judges as having the best safety inductionvideo they had ever seen.

A safe and secure workplaceUnilever seeks to achieve the highest standards of corporate behaviour

towards employees. That means providing uniformly safe operating conditions,which are also free of health risks, for all our employees wherever they workaround the world.


Chart 15

Fatal accidents 1996-1999

96 97 98 99

Employees on-site 11 7 6 4

Contractors on-site 6 9 4 2

Employees off-site 4 4 4 5

of which driving-related (4) (10) (5) (5)

Totals 21 20 14 11

Chart 14

Accident frequency rate 1996-1999

1.5

1

0.5

0

1.4

1.1

0.74

0.45

25

20

15

10

5

0

96 999897

Accident frequency rate = lost time

accidents + restricted work cases

per 100,000 man hours.

Award-winning Chhindwara detergents factory, India

Safe driving

Road traffic accidents, whilst on Unilever business, are a significant

contributor to the overall fatal accident numbers. During 1996-1999,

driving-related fatalities accounted for 24 (36%) out of the total of 66.

Consequently, SHEACO issued a new mandatory standard in November

2000, the Safe Travel in Vehicles programme, to be applied

everywhere in the world. It requires that:

All vehicles driven by employees on Unilever business must be ina safe and roadworthy condition with seat belts fitted for the driver

and passengers.

All employees must wear the seatbelt(s) provided whilst on

Unilever business.

Each Unilever organisation must implement a programme of

defensive driving training for all employees required to drive on

Unilever business.

Employee work schedules, remuneration and incentive schemes

must be kept under review to ensure that they encourage safe

driving patterns and practices.



At Unilever we are committed to creating an environment,at all levels in the organisation, in which people can growand reach their full potential. Fundamental to this areremuneration practices which attract, reward and retainthe calibre of people necessary to deliver on our consumerpromise in the highly competitive markets in which we operate.

Worldwide in 1999, Unilever employees earned 14.9

($5.2) billion in pay, with additional benefits through pensioncontribut ions, health insurance and social security payments(Chart 16). Unilever companies develop their own employeeremuneration strategies in line with national and local marketpractices, monitoring pay and benefits provision in theindustry and beyond.

Some of our long-established companies in the developingworld provide extensive healthcare provision for employeesfamilies. Indias Hindustan Lever had 41,259 workers in 1999and also provided for some 90,000 employee dependants;Unilever Ghana had 1,738 employees with 3,500 dependants.Worldwide in 1999 Unilever had over 400,000 pensionscheme members; India supported 11,226 pensioners and

Ghana 514. Practice varies considerably around the world,depending on the different social systems. Comprehensiveemployee healthcare is normal practice for companiesoperating in the USA and Canada, for example, but not inother countries such as the UK where public sector provisionis extensive.

The willingness of our employees to embrace new ideas andlearn continuously are the foundations on which Unileverscontinuing success is built . Our integrated approach drivesinvestment in the personal and professional growth of all ouremployees, through development of individual skills and

Investing in peopleCompetitive rewards, good training and proper support to employees are

essential for Unilevers continuing success.

competencies. Formal t raining and development takesplace at country and Business Group levels, and at our owninternational management training college in the UK.

Unilever in Poland is characteristic of our operating companies.It has its own training plan in place for all employees, whatevertheir level in the business (Chart 17). In 1999, the total directcost of investment in training for around 3,000 employees

was1735,000 ($783,000). Over 100 employees receivedtraining overseas, and time off and financial support weregiven to others seeking to further their personal education45 people took advantage of this provision.

Investment in skills is also pursued at Business Group level.Our Home & Personal Care Europe Business Group has builtits operations on the European Foundation for QualityManagement (EFQM) business excellence model. UnileversGreek company, Elais, won an EFQM European QualityAward in 1999 for its pursuit of quality. Since 1991 all Elaisemployees have received regular training in Total QualityManagement and in 1994 it achieved the ISO 9001 qualitystandard certification.

Our international training college runs 21 courses open tomanagers worldwide. They cover topics as diverse asenterprise skills, advanced marketing, managing integratedsupply chains and strategic information technology. In 1999,nearly 3,000 employees attended such courses, over 85%coming from outside the UK.

One course, our new Leaders into Action programme, focuseson building the leadership capability of employees moving intosenior management roles. Among other tasks, participantsmust implement their own community service events.


Chart 16

Staff costs and employees 1999

Staff costs 5m $m

Remuneration of employees 4,898 5,218

Emoluments of directors as managers* 11 12

Pension costs 169 179

Post-retirement health benefits 59 63

Social security costs 691 736

Total staff costs 5,828 6,208

* Details of directorsremuneration are given in the Unilever Annual Accounts

Chart 17

The distribution of training days by grade in Poland 1999

Number of Average training

Employment level employees days per person

Senior managers 9 1.5

Managers 281 10.8

Factory and administrative workers 2,728 5

Total 3,018



Promoting effective dialogue with employees is essentialat all times. Our companies use many channels to achieve this:employees regularly receive workplace briefings, newsletters andelectronic bulletins. Intranets and email help share informationrapidly around the world. Employee climate surveyssystematically feed back the views and concerns of employees.

Consultation is widespread and takes many different forms.

In Canada, the Netherlands and Ghana for example, formaljoint consultative bodies of a works council type enableemployee representatives to meet jointly with management.In 1996 Unilever was one of the first companies to setup a Europe-wide works council, providing a framework foreffective exchange of information and consultation ontransnational issues in all EU member states and Switzerland.Unilever fully respects the right of employees to join tradeunions where they wish and we work with unions when theyare formed and formally recognised as negotiation partners.

Today few companies can guarantee lifetime employmentand we seek to handle restructuring and any necessary plantclosures with great care. In February 2000 we announced

a five-year restructuring programme that will lead toa worldwide reduction of approximately 25,000 workers,mainly in manufacturing. Some production capacity will besold to other companies.

Such restructuring has been a fact of business life for someyears. We have sought to promote the long-term employabilityof people working for Unilever, so they have marketable skillsand a portable benefits package. In countries as diverse asCanada and Brazil, when plant closures occur Unileverscompensation package typically exceeds both the minimumrequired by national law and the collective agreements with

Respect and dignity in the workplaceTransparency and respectful behaviour towards employees are fundamental

elements of our approach to corporate social responsibilityespecially at atime when business conditions require us to restructure operations.

trade unions. All employees leaving Unilever receivecounselling on issues such as financial management, trainingand career skills.

To evaluate the success of such support, in the Netherlandsemployees destinations were tracked at point of departure:from 1996 to 2000 employment at a major plant wasreduced from around 1,250 employees to around 550 but

only 5% became unemployed (Chart 18).In addition to making provision for employees, in Brazil,the community was involved in finding alternative uses fora Rio factory site after closure. In India, a redundant siteat Narendrapur was donated to the community.

Respect for the dignity and human rights of employeesextends to protecting workers and their families from widerpublic health threats, such as HIV/AIDS in high incidenceregions. In Africa we ensure that appropriate guidance,medical supplies and support are available to employees anddependants. In a number of countries, including Kenya,Nigeria and Botswana, we also work with others to share

our experience and expertise with the wider community.Similarly, under-age working is an issue of serious concernin many countries. Unilevers policy fully supports theInternational Labour Organisation Convention on MinimumWorking Age and its new Convention 182, banning the worstforms of child labour. Unilever Business Groups around theworld regularly assess their operations against this policy andhave confirmed compliance. In India, for example, we operatea minimum working age policy of 18 years, and contractorsand licensed manufacturers are also required to comply withthis standard.


Chart 18

Netherlands factory restructuring 1996-2000:

destination of employees at point of departure

Employees going to: %

another job in Unilever 18

employment elsewhere 55

self-employment 2

training and education 5

unemployment 5

not seeking employment /early retirement 15

15

5

5

2

55

18

Electronic media enable rapid information sharing withcolleagues around the world
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To succeed as a multi-local multinational we must be sensitiveto local markets: our brands are on sale in 150 countries.People from over 100 nationalities work for the company:the more variety we have in our employees and the morewe see the world through their eyes, the closer we becometo our consumers and the better equipped to understandtheir needs. A rich mix of people, skills and cultures bringsabout a greater range of inputs, viewpoints and experiencesto generate more ideas and competit ive innovations. So wevalue diversity as a cornerstone of our success.

Our starting point is to ensure equality of opportunity in theworkplace. In line with the ILO Declaration on FundamentalPrinciples and Rights at Work, our Code of Business Principlesrequires our companies to recruit, employ and promoteemployees on the sole basis of the qualif ications and abilitiesneeded for the work to be performed.

Each Group company strives to implement this policy as faras it possibly can within the local social and legal context.In some countries, national and religious laws affect ourability to apply equal opportunities principles. For example

in the Kingdom of Saudi Arabia, we respect and comply withthe local religious culture and laws, the application of whichtoday makes it impossible in practice to employ women inour business.

In the UK, we have a detailed policy statement on the valueof diversity and we monitor ethnicity, gender and otherdiversity issues. In 1999 43% of the workforce were women.Among managers 23% were women, compared with anaverage for UK industry of around 18%, as estimated by theBritish Institute of Management.

Valuing diversityFor Unilever, the free exchange of knowledge and experience among people

of different nationalities is key to our success. We seek to be fully partof the diverse societies and cultures where we do business, and to bring thewealth of our international expertise to the service of local consumers.

Overall in 1999, Unilever had 18,906 managers worldwide;of these 4,099 (21.6 %) were women, compared to 2,110in 1992, an increase of 94%. During the same period, thefemale senior management numbers doubled. On a regionalbasis the number of women in management varied between18% and 25% (Chart 19).

Unilever is determined to improve the proport ion of women

getting into senior positions in the company, especially at thehighest levels. Progress has been made, but this is not yet fastenough nor comprehensive enough.

Equally we seek a spread of nationalities among our seniormanagement group and have made progress in recentyears. The top 300 managers in Unilever are drawn from33 countries around the world; of this total, fewer thanhalf are UK or Dutch nationals. In 2000 our top ExecutiveCommittee of eight comprised five nationalities. To embedexchange between cultures, one in ten of nationalmanagement in a given country will normally be expatriate.Unilever companies are constantly exchanging staff; forexample, in 1999 Brazil had 52 expatriates working in-

country, while 50 Brazilians worked overseas. India had tenexpatriates working in-country, while 60 Indian nationalswere on assignments abroad.


Roxanne Aquino, Senior marketing manager

Chart 19

Managers 1999 (18,906):

% who are women

Region % women

Europe 22

North America 25

Africa & Middle East 18

Asia & Pacific 18

Latin America 23
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From tea and ice cream to shampoo and toothpaste, Unileverhas a comprehensive portfolio of brands to meet consumerseveryday needs. We estimate that worldwide around1 billion households use our products; in Turkey some 82%of households use one or more Unilever products regularly;while in India the figure for urban areas rises to virtually 100% .

Our foods business comprises five main categories: tea-based

beverages; culinary products; ice cream; spreads and cookingproducts; and frozen foods. Our home and personal carebusiness comprises seven categories: deodorants; hair care;household care; laundry; skin care; oral care; and fragranceproducts. These products meet a vast range of requirementsand condit ions from laundry soap bars for consumers usingriver water, to detergent tablets for the most advancedwashing machines.

Like many companies, Unilever invests heavily in traditionalmarket research; but really to connect with our consumersneeds, we must go further. From our chairmen to the newestrecruit, Unilever people stay in touch with consumers evolvingaspirations. In 2000 in Indonesia, every single Unilever

employee along with others from our partner companiesnearly 20,000 people in totaltook part in a record-breakingone-day consumer research study in 500 local markets.In Brazil in 1999, not only were 219 market research projectsinitiated, but brand managers also spent up to 15 days eachliving with low-income consumers so as to better understandtheir lives and needs. In India all graduate recruits are requiredto spend a fixed period living with rural consumers.

Meeting everyday needsEvery day around the world 150 million consumers choose Unilever products.

Our local companies always seek to connect with their consumers, anticipatingtheir needs and bringing innovative products to market.

The electronic media offer new ways to listen. Unilever hasset up three Interactive Brand Centres in New York,Amsterdam and Singapore. We have more than 200 brandwebsites in multiple languages and committed 1200($210) million in 2000 to e-business init iatives, helping usto talk with and listen to our consumers better.

Our many telephone carelines give us a special opportunity

to connect directly with our consumersto listen to andlearn from their views; to identify future productinnovations; and to offer advice, for example on conservingwater when washing. In 1999, Unilever Brazil answerednearly three quarters of a million calls to its various brandcarelines. In Sweden, Finland and Denmark, our Vialaundrycareline was initiated in 1997. With 70,000 calls a year,consumers mainly ask for advice, but also give suggestions.As a result we have launched three new Viaproducts,including a travel wash version and environment-friendlywashing tablets.

Innovation comes from anticipating consumer needs:in 1999 Unilever spent a total of 1935 ($996) million on

research and development2.3 % of our turnover(Chart 20). Through six international laboratorieson threecontinents and 71 innovation centres around the world,we t ranslate our research into marketable brands andservices for our consumers. In Vietnam, for example, Unileverbrought 28 new products to market in 1999; half wereincremental improvements on established product lines andhalf distinctive innovations for the local market.


Chart 20

Research and development

as % of turnover

2.5

0

1.5

2.0

1.0

0.5

95 96 999897Chairman Niall FitzGerald tests newrecipes at the European CulinaryInnovation Centre, UK

Chairman Antony Burgmans (right)checks out products on sale in aJohannesburg supermarket, South Africa
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We tailor products to different markets, to suit local tastes,preferences and habits, based on our understanding of thesocieties in which we operate and our policy of listeningto consumers. Worldwide consumers drink almost 200 billioncups of Unilever tea each year and we produce 18 separatebrands of black tea. These local jewels are specificallyblended for consumption in different markets.

In Brazil, our Alabrand detergent was created specificallyto meet the needs of low-income consumers in the north eastof the country, where laundry is often washed by hand in riveror lake water. Especially in developing countries, we seek tomeet the basic household and personal needs of consumerson some of the worlds lowest incomes with products whosebrands guarantee quality. In India Unilevers sales are evenlyspread across the country and across all social classes: in thefour largest business categories, sales in rural areas representas much as 55% of turnover. Also in India, we have:

developed specifically affordable products such as a low-costtooth powder;

developed fortified staple foods, such as flour enriched withextra iron and vitaminsbecause six in every ten womenand children in India are deficient in iron;

provided a range of pack sizes for products such as saltenriched with iodine K-15 that can be bought in affordableunits as small as 200g packs.

for consumers everywhereIn meeting the everyday needs of consumers everywhere, Unilever must meet

their aspirations and ensure the wide distribution of affordable products.

In some countries, simply distributing products to denselypopulated urban districts and far-flung rural areas representsa major challenge. Tanzania has 100,000 retail out lets acrossa country with more than 9,000 villages. Half the populationlives below the poverty line and earns less than a dollara day. Our newly established company set up an innovativebicycle brigade of sales people, drawn from localunemployed young people, to supply small shops withproducts such asKeylaundry soap, sold in small units fora few pence. A year after its launch in November 1999,its affordability and availability earned it an estimated 10%market share.

Across our broad range of products, we are committed tooffer consistent value in terms of price and quality. Forexample, in Ghana, a high inflation economy, overall pricerises between 1994 and 1999 were carefully monitored andwere consistently less than annual inflation (Chart 21).

Unilever believes in vigorous competition, and that is thereality we face in our markets around the world. In additionto several international competitors, there are many regional

and national firms against which we compete in localmarkets. However, it is not just competitive pressureswhich shape the pricing and presentation of our products.Our own efforts to innovate and use new technologycreatively help to ensure we continue to meet the everydayneeds of consumers everywhere.


Innovative distribution systems make ourbrands accessible to remote rural consumersin Tanzania

Chart 21

Inflation vs Unilever price

growth in Ghana 1994-1999

70

0

60

50

40

30

20

10

95 9694 999897

Inflation

Weighted average price growth

across product range



For more than 30 years formal internal clearance has beenrequired before any new product can be placed on themarket by a Unilever company anywhere in the world. Fortodays consumer, concerned about the integrity of the foodchain, this assurance is vital. Our Safety and EnvironmentAssurance Centre plays a central role in assuring human andenvironmental safety, ensuring decisions are made regardlessof commercial considerations.

A major and continuous research programme underpins thisclearance process. In 1999, Unilever invested 1420 ($450)million in fundamental research, of which nearly 90% wasspent at our research laboratories in the Netherlands, UK, US,India and China and the remainder with external researchinstitutes, including a number of universities.

As part of our research commitment to health, safety and theenvironment, some animal testing remains necessary for now.However, we are pledged to eliminate this as quickly aspossible and are spending more than 11.5 ($1.6) million a yearto have suitable alternatives accepted. Before any animaltesting is carried out , senior management is required to certify

that there is no other way of proceeding. We do not testfinished cosmetic products unless demanded by the regulatoryauthorities in the few countries where this is law, and we areworking in partnership with others to change these laws.

Securing the safety and quality of product ingredients fromour suppliers is a vital task that requires very close workingrelationships to achieve the exacting and consistentstandards promised by our brands. It is an area of continuousdevelopment.

We also strive to ensure product quality and safety in ourdistribution chains, and work to achieve full traceability in theunlikely event of needing to recall a product. In developedcountries, our major customers are mainly large sophisticatedretailers. In such countries we are able to achieve closeto 100% traceability.

Although this level of traceability is not yet possible

in developing and emerging markets, we are continuallyworking to improve our performance. In India, wherewe supply more than 480,000 retailers, we have achievedaround 80% traceability of major brands to retailers.

Committed to quality and safetyUnilevers commitment to the human and environmental safety of all our

products is total, from manufacture, through use, to eventual disposal.


Jinghuatea factory, China

Attention to quality and safety is inherent in the development and production of our brands

New biosciences laboratory, UK

Jinghua jasmine tea

In August 1999, Unilever bought the Beijing Tea Company and with

it the Jinghuabrand of jasmine tea. During the purchase, we identified

that 80% of the tea samples received by the company were unusable

due to pesticide residues higher than the safe levels permitted by the

Chinese government. So after acquisition we:

identified bulk suppliers who could meet the national standard;

offered them a premium price for a quality product which they in

turn passed on to the tea growers;

provided technical assistance on reducing pesticides and detecting

residues.

These improvements meant t hat by the end of 1999, 80% of samples

received met t he standard, rising to 95% by mid 2000.



Unilever has more than 100 years experience in brandcommunication. Lever Brothers founder William HeskethLever made his name by taking anonymous bulk soap andtransforming it into Sunlightsoap through lively brand nameadvertising, colourful packaging and novel promotionsallhighly innovative in the 19th century. Today we continue toinvest significant expenditure in marketing when measured asa percentage of our worldwide turnover (Chart 22). In manycountries we are the largest single corporate spender on brandadvertising.

Consumers encounter our brand communication in manyareas of their daily lives, whether on television, radio and theinternet, via print, posters and direct mail, or throughsponsorship and public relations. Television is still the primarymedium for brand advertising, but print also forms a crucialpart of many communications strategies. In the developedworld, the internet is growing rapidly as a mediumand increasingly marketing campaigns integrate all thesecommunications channels and disciplines.

Unilever is committed to social responsibility in advertising and

promotions. In short, all our brand communications aim to belegal, decent and honest. Where possible Unilever companiesaround the world support initiatives in the self-regulationof advertising practices, developing robust mechanisms to setstandards, judge complaints fairly, publish findings openly andrequire errors to be corrected.

Responsible promotionAs one of the worlds leading advertisers, Unilever aims to be legal, decent

and honest in its brand communication. We support initiatives to enhancebest practice standards of self-regulation and ensure social sensitivity in diversecultural contexts.

For example, Advertising Standards Canada is the industrybody committed to creating and maintaining communityconfidence in advertising. Unilever Canada is a membercompany and seeks to abide by its code. This body receivescomplaints, reviews adverts and publishes its verdicts. Likesimilar bodies in many countries in Europe and North America,its aim is to address issues such as accuracy, tastefulness andappropriate presentation of gender and ethnicity. In 1999,Advertising Standards Canada received a total of 1,075complaints. Of these, fewer than 30 concerned Unileverbrands and none was judged to have contravened the codein any way.

Industry associations also work to recognise high standardsin advertising. Unilever Canada has been recognised in thisway. It has received several advertising awards for creativityand effectiveness for such brands as Dove, Becelmargarineand Sunlightlaundry detergent. It is also actively trying toreflect the countrys ethnic identity, to be close to itsconsumers and cultural base and to present positive imagesin its advertising.

In developing countries such as Ghana, systems of self-regulation are just being established. We have taken a lead inestablishing the Ghana Advertisers Board, where in 1999 asenior Unilever executive served as its vice-president. UnileverGhana has sought to use best practice from Europe and otherparts of Africa to shape its approach to advertising. Likewise,in Brazil and India, a system of advertising self-regulation hasbeen developed with the active participation of the localUnilever company.


Chart 22

Advertising and promotions

as % of turnover

14

9

12

13

11

10

95 96 999897W H Lever led the way in creativebrand advertising

Becelmargarine, 1999 winner of CanadasCASSIE Gold award for advertising



In Unilever, sustainability is not an abstract global issue but acurrent pressing concern. Our starting point is to improve theenvironmental impact of our own operations, through eco-efficiency in manufacturing. This is reported in detail at theEnvironment section at www.unilever.com. One example ofreducing environmental impact in manufacturing is at UnileverGhana, which is the first company in the growing industrialcentre of Tema to take the initiative in building an effluenttreatment plant. This has been referred to by the governmentas a model for other industries in Ghana to emulate.

The scope of sustainability takes us further than eco-efficiency.For example, agricultural crops account for more than twothirds of our raw materials. Unilever is a major buyer on worldmarkets of agricultural goods for processing. In line withthe overall environmental impact of our business, we havefocused on three sustainability initiatives in the areas ofagriculture, fish and water.

In agriculture, we are conducting pilot projects to test bestpractice guidelines in nine countries on five of our key crops:palm oil, tomatoes, peas, spinach and tea. In the UK, for

example, we now have a partnership with pea growers on20 farms to develop these guidelines, so that they can be ofwider application. Our long-term aim is to develop marketmechanisms that allow customers and consumers toinfluence the sourcing of agricultural raw materials throughtheir buying habits.

Our second major initiative is sustainable fisheries. A key partof this initiative has been the establishment of the MarineStewardship Council (MSC), which Unilever worked with the

Working towards a sustainable futureIf we are to continue meeting our consumers needs, Unilevers actions must

be aligned with the principles of sustainable development: ensuring we meetthe needs of today without jeopardising the ability of future generations tomeet their own needs.

World Wide Fund for Nature to create in 1996. As one ofthe worlds leading users of fish, we have a clear commercialinterest in preserving fish stocks. Our commitment isto progress towards sourcing all supplies from sustainablefisheries by 2005.

The third major initiative concerns the more sustainable useof water. It is essential in agriculture and in the manufacture

and consumption of Unilever products. Detailed work withexternal partners runs alongside internal actions such asincreasing water recycling in our factories from 40% to 70%over the last five years. Our support for more than 20 waterstewardship projects is led by our global support for the LivingLakesprogramme. For example PAGER (potable water supplyto rural populations) in Morocco is sponsoring a government-run programme to build wells in rural areas, reaching 30,000villages over eight years. Our scientific work with RhodesUniversity in South Africa will give support to our work onwater imprint studies.

Unilevers commitment to sustainability was again recognisedin 2000 with our inclusion as an industry group leader in the

foods products sector of the Dow JonesSustainability GroupIndexes, which track the performance of the top 10% ofthe leading sustainability-driven companies in the Dow JonesGlobal Index of 2,000 firms. The Dow Jones report statesthat Unilever not only focuses on its own production butextends its environmental perspective to the whole life cycleof its products. Unilever has well-defined corporate socialresponsibility standards and gives high importance toindividual development programmes.


Member of

Dow Jones

2000

SustainabilityGroupIndex

Unilever Ghanas Tema effluenttreatment plant, setting standardsin Ghana

For the second year running,Unilever has achieved industrygroup leadership in the DowJones Sustainability Group Indexes
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Our consumers trust us to supply them with high quality goodsthat are produced and can be consumed in an environmentallyand socially responsible way. Unilever companies throughout theworld have continuously raised their environmental performanceby reducing their overall impact. We are also playing our part inthe global debate about sustainability, because we want to shareour experience and learn from others.

Unilever played a major role in the preparations for theSecond World Water Forum in The Hague held in March 2000.The Forum involved more than 3,500 participants from thepublic and private sectors as well as politicians and scientists.The international business panel was led by Unilever. The panelconclusions included raising public awareness about water,sharing technology in ways that can be readily adopted by localcommunities and building partnerships where everyone canenjoy sustainable access to water.

Another issue of current concern in some markets is the useof genetically modified organisms (GMOs) and we haveengaged in this debate with a broad range of public interestgroups. Our full corporate policy is set out at the Environmentsection of www.unilever.com.

Unilever companies are free to include such ingredients wherethey are shown to be safe, are approved by regulatory authoritiesand are wanted by consumers. Where identifiable ingredientsderived from or containing GMOs are included in food products,we label products in an informative and fair way. We continue towork with relevant authorities and others from our industry toensure this is the case. The guiding principle is our commitmentto serve our consumers.

To bring a consumer perspective to the public debate, in 1996Unilever in the UK funded an independent, in-depth studyof attitudes to GMOs by Lancaster University. The research was

and engaging with environmental concernsAs part of its commitment to sustainability, Unilever is working with industry

bodies, government agencies, business partners and other concernedorganisations, to promote environmental care, increase knowledge anddisseminate good practice.

stimulated by a partnership between the Green Alliance andother non-governmental organisations.

Our commitment to engage in the debate about sustainabilityextends to gett ing involved with many environmental initiativesat the local, national and global levels. We also work withemployees, in local communities and through national initiatives.

In Canada, for example, employees are informed about thecauses and dangers of urban smog and encouraged to leavetheir cars at home. A car-sharing programme at UnileverResearch in Port Sunlight, UK, was part of the strategy to achieveISO 14001 certification. In countries such as Brazil, India, Ghanaand Turkey, elements of environmental and safety managementin the home and in the community are integrated into employeetraining programmes, and ways to take action are highlighted.

In Valinhos, Brazil, the Unilever factory has already markedlyreduced its own environmental footprint. Now it is workingwith the mayors office and other businesses to improveenvironmental performance by public and private sectororganisations in the town.

In India, around 80% of our 109 sites are involved in improvingtheir local environment through tree planting and othermeans. Some are engaged in very substantial integrated ruraldevelopment programmes that include environmental issuesalongside the needs of women and community education.At Khamgaon, where one of our large soap factories islocated in a very dry area, employees are leading a major soilregeneration and watershed conservation programme.

In the Netherlands, Unilever is the main sponsor of a newOceanium in Rotterdam, a national and European resource forpublic education about sustainable maritime ecosystems.


Khamgaon soil regenerat ion programme, India The Netherlands Oceanium, raising public awarenessof the need for sustainable seas
http://www.unilever.com/http://www.unilever.com/en/uo_rgi/gmo.htmlhttp://www.unilever.com/en/ui_cs/co.htmlhttp://www.unilever.com/en/ui_cs/hll.htmlhttp://www.unilever.com/Search/show.asp?articleid=1890http://www.unilever.com/http://www.unilever.com/Search/show.asp?articleid=1890http://www.unilever.com/en/ui_cs/hll.htmlhttp://www.unilever.com/en/ui_cs/co.htmlhttp://www.unilever.com/en/uo_rgi/gmo.html



Worldwide in 1999, Unilever companies invested around 140($42) million in community involvement. In addition, morethan 14 ($5) million was contributed to disaster relief projectsin countries as far apart as Turkey, Taiwan and Colombia.This total equates to around 1% of pre-tax profits, on a parwith best practice among leading international companies.It takes the form of charitable gifts, strategic contributionsto social investment projects and commercial initiatives in thecommunity such as cause-related marketing (Chart 23).We are committed to working directly and in partnershipwith public authorities and a range of not-for-profitorganisations to address important social, economic andenvironmental challenges.

In keeping with our multi-local multinational approach, localUnilever companiesinvest in key issues of long-termimportance to society, for example to further sustainable andeconomic development or to raise standards of educationand health (Chart 24). We are now seeking to developstronger global themes in our community contributions tomaximise their impact.

In the Philippines, we are working in a multi-sector partnershipto rehabilitate Manilas polluted Pasig River, while UnileverChinasClean Water and Green Mountainsinitiativeincludes planting half a million trees. In Greece our foodsfactory recycles its hot water to heat a local school complex.In Ghana, the Unilever Foundation for Education andDevelopment provides educational funding and supportsresearch, social and enterprise development projects and

Investing in communitiesAs an integral part of society, Unilever always strives to be a trusted corporate

citizen, fulfilling our responsibilities to the communities in which we operate.

contributes to effective rural health delivery. In Londons innercity borough of Tower Hamlets, seven schools have joined in apartnership with Unilever aimed at supporting and motivatingstaff and pupils to help raise educational standards.

Our brands also undertake commercial initiatives, such ascause-related marketing, to bring benefits both to the brandand our partner organisations. In Cote dIvoire our Belivoir

soap brand runs a programme of visits and competitionsto promote personal and domestic hygiene among schoolchildren, while in Vietnam our P/Sjoint venture companyworks with the Ministry of Health to promote better dentalcare to children through f ree check-ups and educationprogrammes.

To reinforce our brands health messages we sponsor majorcommunity events, such as the BecelRide for Heart in Canadaand the FloraLondon Marathon. The FloraMarathon hasover 30,000 entrants and is the worlds biggest fundraisingmarathon. In 2000, 300 Unilever employees from Brazil, SouthAfrica, Europe and the US competed, helping to raise theraces target of 136 ($39) million for charity.

In support ing our communit ies, Unilever benefits too.Our employees enjoy and gain motivation from making adifference, develop new skills and stay connected with realsocial issues, while our brands become better known andincrease their sales.


Chart 24

1999 community investment

by subject area

%

Arts/culture 6

Economic development 8

Environment 9

Community sport 12

Health 13

Education 19

Diverse local initiatives 33

Chart 23

1999 community spend

by motivation

%

Charitable gifts 36

Social investment 37

Commercial initiatives 27

37

27

3633

19 13

12

9

8

6

Reading partner schemes pair Unilever staff withpupils at Londons Tower Hamlets schools
http://www.unilever.com/http://www.unilever.com/so/co.htmlhttp://www.unilever.com/en/ui_cs/cp.htmlhttp://www.unilever.com/so/cs/gh.htmlhttp://www.unilever.com/so/cs/th.htmlhttp://www.toronto.com/E/V/TORON/0050/16/24/1.htmlhttp://www.toronto.com/E/V/TORON/0050/16/24/1.htmlhttp://www.london-marathon.co.uk/http://www.london-marathon.co.uk/http://www.london-marathon.co.uk/http://www.toronto.com/E/V/TORON/0050/16/24/1.htmlhttp://www.unilever.com/so/cs/th.htmlhttp://www.unilever.com/so/cs/gh.htmlhttp://www.unilever.com/en/ui_cs/cp.htmlhttp://www.unilever.com/so/co.htmlhttp://www.unilever.com/


26/26

Every day, around the world, in many different culturalcontexts, Unilever people are carrying out their responsibilityto the societies in which we operate. They ensure the safetyof our brands, not just once, but every time each individualproduct rolls off the line, is packaged and distributed, via thelargest or smallest outlet, into the hands of our consumers.They operate complex manufacturing sites, conscientiously,with care for their fellow workers, the environmentand the neighbouring community. They innovate, listeningto consumers, learning about emerging technologies andworking to bring new solutions to consumers aspirationsand needs in a cost-efficient and effective way. In short,for Unilever, the very business of doing business, responsiblyand sustainably, makes a substantial contribution to society.

The behaviour expected of Unilever people is described inthe values set out in the Corporate Purposeand the standardsgiven in the Code of Business Principles. While thesestatements may be adjusted over time to reflect evolvingexpectations, fundamentally they set out values which havebeen the foundation of Unilevers way of doing businesssince the company began.

However, overarching statements of principles do notalways translate into actions, and while our aims are clear,we acknowledge that sometimes we may fall short oftheir achievement. There is always room for improvementin performance.

The CSR projects run during 1999 and 2000 explored newways to measure and evaluate our social responsibilities. Fromthem, we have learnt how to improve the assessment of our

The purpose of this Social Reviewhas been to provide a broad perspective

of Unilever, and to show how we go about meeting the values and standards

we set ourselves as we carry out our daily business. No single document

can completely cover all aspects of our relationships with society. Our aim

has been to give you a first introduction and opportunity to understand

what we do, why we do it and how we plan to go forward.

Please let us know what you thinkwe welcome your comments on what

you have read. We can be reached via Contact Usat the Society section

of www unilever com where you will also find more about our brands and

The way ahead

Tell us what you think

performance against our standards. We are now consideringwhat is appropriately monitored and reported at aninternational level, and what is best kept local. The challengeis how to share leading practice and bring greater clarity, whilestill retaining our commitment to a locally tailored approach.

During 2001 we will build on the pilot projects and re-workthe measures of performance we use. We will continue

our efforts to identify trend data and external benchmarksagainst which we can assess our performance. We are alsodeveloping a road map of best practice and milestones forCSR management, so our companies can make progresswithin a consistent framework and with a common senseof purpose, whatever their current size and stage ofdevelopment (Chart 25).

The nature, extent and management of corporate socialresponsibility is also being actively debated outside Unilever,internationally and locally. At the international level we willcontinue to learn from organisations such as Business forSocial Responsibility and the Global Reporting Initiative,contributing, from our own experience internationally, to the

development of understanding in this field. We will continueto support actively the UN Global Compact.

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