Abstract

This case discusses multinational consumer goods company Unilever’s cost reduction through sustainable sourcing. In March 2021; Unilever reported that it had reduced operating costs by $1.5 billion since 2008. In 2010; Unilever launched the Unilever Sustainable Living Plan (USLP); aimed to make its business operations more sustainable; ecologically friendly; and socially beneficial. The company set a goal of sourcing 100% of its agricultural raw materials sustainably by 2020. Although the company made significant progress in its commitment to 100% sustainable sourcing; it could not hit the target within the set deadline. Unilever; however; continued to work toward achieving the parameters in the USLP beyond 2020. But there were several challenges like its complex global supply chain; certification policies on sustainable sourcing; sourcing from smallholder farmers who lacked knowledge or training; achieving full traceability and transparency across complex supply chains; etc.; that the company was facing in scaling up its sustainable practices. Given the wide range of raw materials sourced and the length and complexity of its supply chain; it remained to be seen whether the company would be successful in achieving its ambitious goal of 100% sustainable sourcing and continue to save on costs.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of sustainable sourcing
• Analyze how organizations benefit by sourcing sustainably.
• Evaluate the challenges in sustainable sourcing.

Keywords

Unilever; Cost saving strategy; Sustainable Sourcing; Supply chain; Strategy Sustainability