• Posted on December 18, 2023
• Libin

Assignment Sample on ENGT5219 Engineering Business Environment

Introduction

The meaning of clean growth is the improvement of the national income after reducing the emission of greenhouse gasses. In the context of the industrial strategy of the UK, clean growth can be achieved only after confirming the affordable supply of energy. Achieving clean growth can be helpful to increase productivity, earning powers, and make employment opportunities. And it has a great positive impact on the environment and protecting the climate. And on the environment and climate, both the present and future generations depend. In 2008, the “Climate Change Act” was passed for reducing the emission of greenhouse gases by up to 80% by 2050. And this will be known as “Carbon Budgets”. In the report, the clean growth strategy of the company Unilever is considered, as in the environment Unilever serves their contribution hugely.

Current contribution

Unilever plc (public limited company) is a consumer goods multinational company, and it is organized into 3 main divisions, and which are beauty & personal care, home care, and food and refreshments. They are selling more than 400 products in more than 190 countries. They have reached almost $60 billion in revenues in their market. In 2010, they published their “Unilever Sustainable Living Plan (ULSP)”. In their sustainable plans, the reduction of carbon emissions is included. In 2019, as per the report of GHG (Greenhouse gasses) footprint of 60 MtCO₂e (Metric tons of carbon dioxide equivalent), this is almost attributed to 98% scope of the carbon emission (Comello et al. 2021). The ULSP gave two commitments; the first commitment is to pertain to less carbon emission by their operations by the year 2030. And the second commitment is to set a baseline for 2010, for reducing the GHG footprint all over the value chain up to 50% on the “per consumer use basis”. The intensity of carbon can be measured by the CO₂e quantity that is allocated for each of the single portions. In 2019, the measured intensity was about 45.5 grams of carbon-di-oxide in each of every use. Here the use that is used by the consumers of the products of CCF of Unilever is included for the year 2019. To reach the goals of the climate, Unilever tries to utilize 100% of the renewable energies, for increasing the power of the operation that they are controlling. Besides this, Unilever is also planning to depend on sustainable sources to use the commodities, like palm oil, pulp or paper, soy, etc. And renovate the existing products by the use of these commodities. In 2020, Unilever announced an additional statement to “fight climate change and protect nature as part of a new integrated business strategy” (Bucovetchi et al. 2018). They are forecasting to reach net-zero emissions by the introduction of these new products by the year 2039. And they are focusing to cover all the related emissions from the sources of the material to the scale point. But in this goal, the “consumer use stage” is not included. To meet the goal, the main key point is to consider the “deforestation-free supply chain”, by the year 2023. And this can be achieved by the combination of contrast of the restricted suppliers and the investments in satellite imaging, monitoring the data process, and data verification.

Since 2008, Unilever has cut the emission of carbon in their different factories up to 47%. As per the presented report of Unilever in 2017, they have delivered their brands of “sustainable living”. This represents the most sustainable product line of Unilever. As per their report, it can be said that their product lines grew 46% quicker than the other part of their business (Esty and Karpilow, 2019). And because of this their turnover grew almost 70%.

Some policies can be related to carbon data especially in the context of the environment, society, and governance. There are many policies in the UK towards sustainability, but in this context, the “Climate Change Act 2008” can be applied (Belas et al. 2019). The “Climate Change Act of 2008” makes the United Kingdom the world’s first country to have a legally mandated long-term framework for reducing carbon emissions. It outlines the government’s goal of reducing carbon emissions in the UK to zero by 2050. Carbon Budgets are a new concept introduced by the Act. A carbon budget limits the overall quantity of greenhouse emissions the UK can produce over five years. The United Kingdom is the first country to enact legally binding carbon budgets. Every ton of greenhouse gases emitted between now and 2050 will be counted under a carbon budgeting scheme (Nandiyanto et al. 2021). When one sector’s emissions rise, the UK must achieve equal reductions in another.

In the UK these policies are committed to

• Promote the responsibility of the organization towards the environment and make better communication and implementation of these policies at all the workforce levels.
• Reduce the energy uses and wastage of both renewable and non-renewable energies.
• Promote recycling and reusing methods to reduce the wastage of energy.

Disruptive Innovation for a Greener Business

In 2010, Unilever launched the “Unilever Sustainable Living Plan (ULSP)”, and this will help to improve the sustainability performance of Unilever.  They have adopted this plan to prove the connection between the sustainability and the successful business. From last 10 years after the implementation of USP, the world has changed. Because of some issues that they were facing, they have adopted this plan and those issues became the mainstream. And one of those issues is the stakeholders of Unilever do not get the minimum sustainability commitment from the side of the Unilever management. The “Unilever Compass Corporate Strategy” sets the goal to  make their ambitions fulfill and implement if practically.

For the clean growth strategy, Unilever can introduce green-washing for the reduction of carbon (Reza, 2020). And in this context, a new term carbon washing is introduced. So, in this report, the space of the carbon-data disclosure is illuminated. For reducing the carbon footprints of Unilever, this aforementioned initiative of carbon has a significant role. Sometimes, it is found that climate change can have a bad impact on social welfare. And it is also estimated that Carbon data can be generated by economic activities. And these views are represented as the public interventions for internationalizing the negative externalities with the help of carbon-pricing tools, like a carbon tax. At the time of “revising the social cost of carbon” an economist emphasizes the requirements of the changes in the policies of climate change. In recent times, carbon data can be generated by economic activities. Concerns from stakeholders regarding ESG (Environmental, social, and governance)-related green-washing and data dependability problems are also driving substantial regulatory initiatives in the field of global sustainable finance (Raj and Aithal, 2018). One of the most active institutions to provide the correct framework of the legislation of whether PAAS can call it green through the contribution of sustainable development and the goals of the environment to be fulfilled by the EU. And the EU has been enacted with the different types of legal rules and regulations that are based on the proposal of the “Commission’s 2018 Action Plan” for the growth of sustainable growth.

For the development of green-washing in the context of reducing carbon emission taxonomical clarity is important, without the taxonomical clarity application of green-washing is dangerous (Anitah, 2019). Unilever can adopt this process of carbon emission only after gathering this clarity, as the other companies are misaligned with the incentives to selectively or intentionally disseminate information, which has no direct impact on the environment or to make unfulfilled commitments.

At the time of implementation of green-washing, more attention should be paid to the threats of its implementation, for reducing carbon emission (In and Schumacher, 2021). And in this context, the term carbon washing arises. Since carbon reduction and carbon reduction have been designated as universal “sustainable development goals (SDGs)”, the “corporate carbon performance data supply chain” is well ahead of other sustainability data (Dmitrievna, 2021). Carbon-washing, on the other hand, poses a significantly greater threat than generic green-washing because of the reputational and financial stakes associated with company carbon performance. Carbon-washing can be considered as the result of present methodological flaws, reputational motivations, and regulatory constraints (Montoro et al. 2020). The positive aspect of this part is that if certain conditions are met, carbon-washing situations can be avoided. In November 2010, Unilever released its ‘Sustainable Living Plan’ (SLP), which outlines the company’s sustainability objectives and targets for the following decade. Its goal is to decouple economic growth from environmental effect, such that as the company grows, its total environmental footprint decreases across the value chain (Siddique, 2018). The corporation has also set some lofty goals for itself. It intends to help more than a billion people better their health and wellness by 2020, reduce its product’s environmental footprint, obtain 100% of its agricultural raw materials responsibly, and connect more than half a million smallholder farmers and small-scale distributors to its supply chain.

Figure 1: Carbon-washing finances

(Source: https://energy.stanford.edu/sites/g/files/sbiybj9971/f/carbonwashing-_a_new_type_of_carbon_data-related_esg_greenwashing_working_paper_0.pdf)

The life cycle of Carbon data:

Figure 2: Life cycle of Carbon data

(Source: https://energy.stanford.edu/sites/g/files/sbiybj9971/f/carbonwashing-_a_new_type_of_carbon_data-related_esg_greenwashing_working_paper_0.pdf)

Stakeholder Analysis and Management

Suppliers of Carbon data: Carbon emission becomes the major topic of discussion for improving the performance of the organization in the aspect of the environment (Bista, 2019). In this context, the main concern is about the financial risks that are posed by the company in the climate changes. Unilever has to communicate with the stakeholders through different types of channels. The sources can be the reports of the CSR, annual filings, the websites on which the information is posted (Burman, 2020). Besides this, the regimes can be divided into two parts. Mandatory regimes include the “EU Emissions Trading System (ETS)”, and this is for disclosure of the emission of governmental emissions.

 

Lifecycle	Lifecycle step	Data Process Steps	Process Description
Ex-ante	Preliminary-Signaling	Carbon-data released Public relationship	Activities: Statements of the Public-policy, pledges, announcements, declaration of the targets of carbon-reduction and the activities of carbon-MRV. Stakeholders: Organizations
Ex-Post	Primary Cycle	Raw-Data Measurement	Activities: Raw-data structuring and processing, Qualitative and quantitative sampling. Primary-industry stakeholders: Organizations Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
		Institutional data collection	Activities: Raw-data structuring and processing, qualitative and quantitative sampling for both the physical and non-physical activities. Primary regulatory and political stakeholders: Government agencies, policy regulators, international industries. Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
		Internal Data calculation	Activities: Qualitative and quantitative sampling for nonphysical activities, raw-data extrapolation, structuring and processing. Primary regulatory and political stakeholders: Government agencies, policy regulators, international organizations. Primary-civil-society stakeholders: NGOs, NPOs, Research institutions.
		Corporate-Disclosure and PR	Activities: Voluntary and mandatory disclosure for both the non-financial and financial information of the performance of the level of the organization. Primary-industry stakeholders: Companies
		Primary-Data aggregation	Activities: Qualitative and quantitative sampling and screening for non-physical activities, extrapolation of the Primary-data, structuring and processing. Primary-industry Stakeholders: Service providers of the data of ESG, like CDP, Reprist, Bloomberg, Morningstar, Refinitiv, etc. Primary regulatory and political stakeholders: “National emissions monitoring agencies” like EU-ETS, and the “International emissions monitoring bodies”, like UNFCCC organization. Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
		External-data validation	Activities: Qualitative and quantitative assessment of the data of ex-ante, and its validity and reliability is determined. Primary-industry Stakeholders: Service providers of ESG data, auditors, the advisors who are providing consultancies and services. Primary regulatory and political stakeholders: “National emissions monitoring agencies” like EU-ETS, “International emission monitoring bodies”, like the CORSIA agency. Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
		Independent-data verification	Activities: Qualitative and quantitative assessment of the variables of the primary or raw data of the ex-post framework. And the reliability & veracity is also determined. Primary-industry Stakeholders: Service providers of ESG data, auditors, the advisors who are providing consultancies and services. Primary regulatory and political stakeholders: International or national bodies of supervisory including ESAs, government agencies, central banks, etc. Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
		Secondary-data aggregation	Activities: Qualitative and quantitative sampling and screening for non-physical activities, extrapolation of the secondary data, structuring and processing. Primary-industry Stakeholders: ESG rating providers, like Vigeo-Eiris, ISS, MSCI, Sustainalytics, Bloomberg, indexes of ESG, etc. Primary regulatory and political stakeholders: International organizations, and governmental agencies, regulators like the European commissions. Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
		Data interpretations	Activities: Qualitative and quantitative sampling and screening for non-physical activities, extrapolation of the secondary data, structuring and processing. Primary-industry Stakeholders: Asset managers, asset owners, companies, service providers of the data of ESG, general providers of data-service, like the news media, regulated professionals, like the accountants, auditors, consultants, lawyers, etc. Primary-civil-society stakeholders: NGOs, NPOs, the institutions of Research.
	Tertiary cycle	End Usage	Activities: Utilizations of end-products, which include the indexes, reports of the industries, strategies followed for the investments, approaches of the regulatory bodies, ratings of the ESGs, risk managements, engagement ideas, structure of the governance, etc. Primary-industry Stakeholders: Asset managers, asset owners, companies, service providers of ESG data, general data-service providers, lay the news media, regulated professionals, like the accountants, auditors, consultants, lawyers, etc. Primary-civil-society stakeholders: NGOs, NPOs, like GRI, SASB, UN Global-compact, WWF, WBCSD, etc. and the Research institutions.

 

Table: Life cycle of Carbon data

(Source: Self-made)

 

Discussion and Conclusion

Carbon-washing forms: The scenarios of carbon-washing are:

• Ex-post MRV messaging does not match the level of ambition of endogenous ex-ante decarburization plans, which often includes the carbon data-related ex-ante pronouncements, like the objectives of net-zero, pledges for carbon reduction, and the other types of unduly ambitious or ill-documented plans for carbon management.
• “Immaterial virtue signaling” like the announcements of the initiatives of limited tree-planting for demonstrating the consciousness of carbon at the time of contribution in all the carbon foot printing.
• “Over-reliance on carbon offsets” can describe the formulating practices of the plans of carbon reduction. And this depends to a large extent on the utilization of carbon offset.
• Fragmented disclosure constitutes the spreading out practices of the carbon data at the level of the group with the help of different reports, blogs, and websites.

Weaknesses of this system

The carbon footprint is considered a standard metric that can be used for accounting for the emissions produced by the specific activity, product, and other units (Chakraborty, 2019). It is frequently mentioned by finance-practitioners who are sustainable at the time of evaluating the emissions of potential reduction of that specific fundings and the footprints of carbon are commonly reported PAAs.  In this context, Unilever has to include the investments made by them for reducing the carbon as a measure of forward-looking, which includes the “carbon neutral”, “net-zero”, or “the targets of carbon negative”. More than 800 companies are committed to “Science-based targets (SBTs)” the main objective of this is to align with the strategies to mitigate climate at the firm level with the model of IEA climate for achieving the “Paris Agreement’s 2℃ emission target” (Zhi et al. 2020). Unilever has internally implemented the prices of carbons as self-regulation by the application of these tools. In this context, TCFD has to encourage Unilever to disclose the additional information related to carbon and about the risk management, strategy, governance, accounting metrics, and reduction targets.

Carbon-washing can be represented as the systematic disclosure at the level of the market for the negative externality and failures, which have a significant impact on the stakeholders, enterprises, and society in a huge manner. Both the direct and indirect impacts can be illustrated in this report at the corporate and financial gains from their position of them in the market. As Unilever is committed to reducing their carbon emission in their products and services, they can follow the innovation of carbon-washing as it can be effectively implemented in the business of Unilever. In this report, the carbon data and its lifecycle of it are discussed, which can be beneficial for the management of Unilever to implement it successfully practically. Carbon-washing can occur to increase both the quality and quantity of their productivity.  In this report, the people involved with this project are elaborately discussed. A table is created by addressing the activities and stakeholders in different life cycles of carbon data. The stakeholders, regulators, lawyers, policies, all are important to handle this project for classifying carbon-washing as a separate branch of green.

 

 

Reference

Journal

Anitah, J.N., 2019. Industry 4.0 Technologies and Operational Performance of Fast Moving Consumer Goods Manufacturers in Kenya: a Case Study of Unilever Kenya and L’oreal East Africa (Doctoral dissertation, University of Nairobi).

Belas, J., Dvorský, J., Strnad, Z., Valaskova, K. and Cera, G., 2019. Improvement of the quality of business environment model: Case of the SME segment. Engineering Economics, 30(5), pp.601-611.

Bista, S., 2019. Sustainability in Business (A critique of environmental sustainability practices in Coca-Cola and Unilever).

Bucovetchi, O., Badea, D. and Stanciu, R.D., 2018. Blockchain technology–a new approach in business environment. In MATEC Web of Conferences (Vol. 184, p. 04016). EDP Sciences.

Burman, G., 2020. Evaluation of carbon regeneration kiln: Comparison of different kiln types using simulation software.

Chakraborty, B., A Study on Recent Global Approaches towards Green Business for Healthy and Sustainable Future.

Comello, S., Reichelstein, J. and Reichelstein, S., 2021. Corporate carbon reduction pledges: An effective tool to mitigate climate change?. ZEW-Centre for European Economic Research Discussion Paper, (21-052).

Dmitrievna, K.K., 2021. Transformation of Business Sustainability Strategies of FMCG Companies in the 21st Century on the Examples of Unilever and L’Oréal.

Esty, D.C. and Karpilow, Q., 2019. Harnessing investor interest in sustainability: The next frontier in environmental information regulation. Yale J. on Reg., 36, p.625.

In, S.Y. and Schumacher, K., 2021. Carbonwashing: A New Type of Carbon Data-related ESG Greenwashing. Available at SSRN.

Montoro, J.A.A., Martínez, G.P.G. and Reyes, L.V.G., 2020. IMPACTO DEL VERTIMIENTO DE AGUA RESIDUAL DE LAVADO DE CARBÓN EN LAS PROPIEDADES FISICOQUÍMICAS DEL SUELO. Ingeniería Investigación y Desarrollo, 20(1), pp.5-11.

Nandiyanto, A.B.D., Putri, S.R., Ragadhita, R., Maryanti, R. and Kurniawan, T., 2021. Design of heat exchanger for the production of synthesis silica. Journal of Engineering Research.

Raj, K. and Aithal, P.S., 2018. A ‘Desi’Multinational–A Case Study of Hindustan Unilever Limited. International Journal of Case Studies in Business, IT and Education (IJCSBE), 2(1), pp.1-12.

Reza, M.H., Marketing Strategy and Sustainable Plan of Unilever.

Zhi, P., Ou, Y., Li, C., Wang, Y. and Zhao, D., 2020, March. Study on harmless and resource utilization of spent cathode carbon washing process. In IOP Conference Series: Earth and Environmental Science (Vol. 467, No. 1, p. 012177). IOP Publishing.