The world has a plastic problem. Powerful and moving images of seahorses clinging to cotton buds or sea turtles with plastic bags in their mouths bring home the negative effects of consumer behaviour on their environment. Although these images are hard-hitting, they are also increasing awareness and driving a change in behaviour.
Consumers are increasingly demanding that businesses close the loop on plastics and ensure that the products they buy are sustainable and do not damage the environment.
This, in turn, is leading to change in the corporate world as an increasing number of companies update their strategies to focus on sustainability. As the function responsible for what the company buys and whom it buys from, procurement will play a central role in finding a solution to this growing problem.
Traditionally, procurement would have looked to tackle this on its own. However, the function has grown beyond that line of thinking now and is turning to more innovative solutions that draw in expertise from across the board. The procurement organisation at Unilever, under the leadership of CPO Dave Ingram, is one such function thinking along these lines.
The team has built an ecosystem of stakeholders throughout the plastics value chain who are coming together as a group to tackle the issue collaboratively. Not only has the team drawn in plastic suppliers, local governments and nongovernmental organisations (NGOs), they have also involved Unilever’s competitors.
Such an initiative would have been considered impossible a few years ago, so what has changed?
“As a CPO, it is important for me to see at first-hand what our customers think about our products. With that in mind, I decided to do a walk around at a supermarket in the UK. I got talking to one lady about the coffee she was buying, and it was very clear that her biggest concern was the plastic packaging. This confirmed to me that we had to change. And by that I don’t mean just Unilever – I mean the entire industry,” says Ingram.
He describes consumer concern about single-use plastics as a “wildfire” that is acting as an urgency driver for all businesses. This, in turn, is opening up their minds to new ideas such as this ecosystem.
Even with this wildfire, Ingram says the team has had to work hard to bring the right stakeholders on board and that has required a big shift in terms of his role as a CPO. Instead of finding the right supplier and negotiating over price, he has had to talk with regional governors and his competitors to convince them.
Ingram references one effort to build a new plastic recycling facility in Indonesia and says he has spoken to some of Unilever’s major competitors, as well as the governor of West Java, to get them all involved to get the facility up and running.
“It’s quite a cool role,” he says. “It’s different from what I’m used to as a CPO, but you can see the impact you are having.”
In 2017, Unilever committed to ensuring all the plastic it uses would be fully reusable, recyclable or compostable by 2025.
Even more recently, Unilever has said that by 2025 it will halve its use of virgin plastic by reducing its absolute use of plastic packaging by more than 100,000 tonnes and accelerating its use of recycled plastic, as well as helping to collect and process more plastic packaging than it sells.
When Unilever first stated these goals in 2017, because of its size and reach as a business, the company expected the market to respond. It didn’t.
When the team looked at the reasons for this, they quickly realised that Unilever’s footprint was relatively small in absolute terms. At this point, the team knew Unilever had to bring the market together to act as one so if it wanted to have the market respond and hit these goals. The team also realised that a lot of the companies that operate around the plastic marketplace had similar goals so bringing everyone together would provide mutual benefits.
Once the team, which included Marika Lindstrom, VP of packaging, and Amit Choudhury, global procurement director – packaging, had identified key stakeholders and began conversations around the steps they wanted to take, the first task was to align around the problem.
“We all had to agree on the problem and make the same commitments to solve that,” says Choudhury. “Success ultimately hinged on that alignment and those commitments.”
The ecosystem agreed to focus on collecting and recycling plastics. As such, they decided to focus on developing facilities capable of recycling plastic in key markets, segregating different plastics, the technology needed to change polymers into reusable plastic and making the exercise valuable for each party.
Their efforts would be focused on developing markets in which Choudhury and Lindstrom say businesses face the biggest challenges.
The team knows the ecosystem approach will enable it and other key stakeholders to hit these lofty targets.
In Indonesia, members of the ecosystem have come together to set up a pilot project around these aims.
The group has started using local NGOs to connect it to several million informal collectors throughout the country so companies can begin the process of better separating the different plastics and segregating them ready for processing at facilities. Sabic, the Saudi diversified manufacturing company, is involved in developing technology that will enable manufacturers to develop the first circular polymers from mixed plastic waste. Unilever, meanwhile, has agreed to buy post-consumer resin and use that in products.
These efforts are all designed to bring down costs and add value to all stakeholders.
This is an initiative that is currently underway and the team comes together regularly through calls and face-to-face meetings to talk about progress and understand what is happening on the ground.
While Ingram has been working at a high level, there is a team beside him working diligently and effectively to ensure the company makes progress and delivers results against the aims and commitments of the ecosystem.
While Lindstrom and Choudhury are driving this, beyond them, there are the representatives of the companies within the ecosystem, as well as internal stakeholders from Unilever itself.
Lindstrom says internal stakeholder engagement key.
“You need everyone on board, including the likes of marketing, finance, supply chain, and research and development. You also need that focus and attention from the board, that has helped us along the way,” she explains.
While bringing the right stakeholders on board has been a challenge, Lindstrom says the aesthetics of recycled plastics have also been an obstacle.
“This post-consumer resin can look very different to that of virgin plastic. In some cases, it is more of a grey shade and we have to think about how we communicate that to our consumers,” she says.
Developing the technology capable of recycling these plastics is also a challenge., Choudhury adds.
Despite these issues, the fact that this ecosystem has come together and that the so-called “wildfire” is behind them, the team is confident it can make progress.
In Indonesia alone, the group has made significant progress. A community waste bank programme enables waste collectors in 18 cities to drop off waste and receive money in return.
In 2018, 2,816 community waste banks with more than 429,000 members collected 7,779 tonnes of packaging waste, worth 10.5bn Indonesian rupiahs.
In the same year, the programme began a flexible waste pilot and opened a waste transfer station in East Java, collecting pouches through 100 drop box points in Jakarta and the surrounding area.
The team has also worked with the Fraunhofer Institute for Process Engineering and Packaging IVV on CreaSolv® Recycling technology – a chemical innovation that enables consumers to recycle multilayer sachets, which are used for products such as shampoo and toothpaste.
A pilot plant in Indonesia, opened in 2018, is the only facility in the world that uses the technology to recycle these sachets.
Both Lindstrom and Choudhury know there is lots of work still to do.
“We know we have a long way to go; we need to do things such as bring the costs down, so we will keep on learning and we will make progress,” says Choudhury.
This ecosystem approach to relationships is the future, says Ingram. That isn’t just in terms of Unilever’s sustainability efforts, that is right across the board in everything the function does.
“When I look at how we as a company have looked at things such as innovation in the past, we always did that on a one-on-one basis,” he says.
“But, as challenges become more complex, the answers you need come from different places, they won’t just come from our big partners.”
It is here that ecosystems come into play. Ingram is also clear, however, that the value such groups generate has to be shared around. Although this is a different mindset for procurement teams to adopt, the function must make this switch.
“These are the partnerships of the future,” he says.
Unilever believes in this approach so much – especially when it comes to sustainability and innovation – that it has invested in a startup hub located in its building.
“We have our ‘Foundry’ located two floors below me that has around 80 startups in it. We lease the space to them and we are working to leverage this as a new system of discovery,” he explains.
In one instance, Unilever has invested in a company called Convoy, which is a solution for on-demand trucking.
The company has produced an application that matches companies that need to transport goods with small trucking providers that have spare capacity. The app then automatically arranges, tracks and reports on the shipment.
This is just one example of the Unilever team looking to the future of partnerships to both solve some of the world’s most difficult challenges as well as keep the company at the forefront of progress.
Image: Maxim Blinkov / Shutterstock.com