Unilever PLC

#### Trade associations and industry partnerships

###### Trade associations

As we progress on our climate action journey, we want our industries to move forward

too. We have conducted an in-depth review of our main trade associations to assess their

alignment with the Paris Agreement and our climate policy positions and have published

this review on our website. We have also examined the extent to which we can influence

these positions.

We have updated our internal trade association governance guidance to make clear that

when entering into a new trade associations membership or when renewing a membership,

our trade associations must confirm that their climate policy positions are aligned with

Unilever. If they are not, they must confirm why this is the case and whether they are open

to change.

Where we consider it necessary, we offer guidance and support to our trade associations to

help determine whether they are aligned with our climate policy positions and agree a way

forward when they do not. In some circumstances, a trade association may be advocating

for policy change that runs counter to Unilever's interests or position. In these cases, our

preference is to engage the trade association to determine a) why their position is at odds

with ours; and b) if their position(s) can change. If a trade association's position cannot be

made consistent with Unilever's, then we reserve the right to withdraw our membership and

make this information public.

###### In some instances, there may be a clash of positions; however, we may decide that

Unilever's interests are best served by staying within the trade association. If this happens,

Unilever reserves the right to make a public statement to this effect: we will then continue

to work with the trade association to encourage it to align its climate policy position to

our own.

Industry partnerships and coalitions

We believe that cross-industry action can contribute to achieving both our goals and

an economy-wide transition. We will continue to work with suppliers and industry peers

and participate in issue-specific coalitions, such as RE100, to achieve transformational

change within our chemicals and agricultural value chains. We will also continue to actively

participate in groups seeking to pioneer net zero pathways, such as the WBCSD, the

Exponential Roadmap Initiative and the We Mean Business Coalition. [...] #### Governance

###### Unilever Board and Board committees

The Board has overall accountability for the management of all risks and opportunities,

including those arising from climate change and our CTAP. Our CEO and Executive Board

member, Hein Schumacher, is ultimately responsible for overseeing our climate change

agenda and the implementation of our CTAP. The Board delegates responsibility for specific

matters related to climate change and our CTAP to different Board subcommittees:

• The Corporate Responsibility Committee (CRC) has responsibility for the oversight of

Unilever's conduct regarding our corporate and societal responsibilities, our reputation

as a responsible corporate citizen, and our culture. The CRC reviews and provides input

to Unilever on the management of current and emerging sustainability matters affecting

the Unilever Group. It also provides external and independent oversight and guidance on

the environmental and social impact of how Unilever conducts business. The Committee

is responsible for reviewing the CTAP, ensuring we remain current and reviewing the

progress towards meeting targets, and providing recommendations to the Board in

relation to the development of the CTAP. The Committee reports all relevant matters

discussed at its meetings to the Board.

• The Audit Committee oversees the non-financial disclosures in our Annual Report and

Accounts, including the progress reports against the CTAP. This includes reviewing

the scope and results of any internal and external assurance activities obtained over

the disclosures. [...] Implementing and measuring progress against the plan

The Corporate Responsibility Committee (CRC) delegates the day-to-day oversight of the

CTAP to the Unilever Leadership Executive (ULE), receiving updates on the progress of our

CTAP from the ULE four times a year.

The ULE comprises the CEO, CFO, and other senior executives, including the President of

each Business Group and the leaders of key functions. The ULE reviews progress against

our Net Zero by 2039 ambition, our near-term Scope 1 & 2 GHG reduction target, and our

near-term Scope 3 GHG reduction targets quarterly. The ULE is supported by our newly

created Unilever Leadership Council (ULC), a group of senior leaders including our Chief

Sustainability Officer.

Each of the Business Groups and Business Operations are responsible for the delivery of

their respective action areas as part of the CTAP, with a Sustainability Lead in each Business

Group. The Business Groups are supported by the Sustainability Function and the Business

Operations Sustainability team.

Our Climate & Nature Investment Committee evaluates and approves investment

proposals and will review the progress of the Climate & Nature Fund. While investments

made possible by our Climate & Nature Fund have the potential to contribute to the

acceleration of our mitigating actions, it is not the primary financial resource used to deliver

our CTAP (see Financial Planning below).

We are also bringing the level of accountability for the delivery of sustainability roadmaps in line with other business deliverables – from Unilever-wide KPIs used in the company's bonus plan to individual KPIs for those managing workstreams. We will continue to link reward and the delivery of sustainability performance as part of our broader Growth Action Plan to dial up the performance culture at Unilever. [...] Throughout, we intend to engage more transparently. The publication of our first Climate Policy Engagement Review (PDF 1.39 MB), which sets our climate policy priorities and critically examines the positions and engagement activities of our main industry associations, is testament to this effort.

##### Internal oversight of climate policy engagement

The management system for Unilever's direct and indirect climate policy engagement is overseen by our Global Sustainability and Global Corporate Affairs teams. For direct lobbying we adhere to the following process:

- Global climate advocacy priorities are defined through an annual planning and review process. In line with our commitment, all direct lobbying priorities are assessed to ensure consistency with our objectives in delivering the 1.5°C ambition of the Paris Agreement. Plans are approved by the Chief Sustainability Officer and the Global Head of Communications and Corporate Affairs.

- Priorities and guidance are then given to Unilever's Business Groups and our in-country Sustainability and Corporate Affairs teams, who apply our global objectives in a local context.

- The Global Head of Sustainability - Environment and the Global Head of Corporate Affairs meet monthly to review this process and manage any flagged issues.

All public policy engagement that Unilever undertakes must adhere to our Code of Business Principles. Colleagues that engage with industry associations must also undertake mandatory compliance training. Our policy engagement has been, and will continue to be, a key driver in helping to deliver the goals set out in our CTAP. Our CEO and Executive Board member, Hein Schumacher, is ultimately responsible for overseeing our climate change agenda. Further details on our internal governance will be included in our updated CTAP, which will be published ahead of our AGM in 2024. [...] ##### Internal governance of industry associations

Unilever reviews its membership of industry associations on an annual basis and is committed to conducting a full, global industry association review every three years (the last review took place at the end of 2022).

Furthermore, we are committed to publishing an annual list of principal industry associations and climate specific alliances and advocacy groups. This includes disclosing whether these groups are aligned with the Paris Agreement. Our intention is to publish a full list of our industry associations after our next global review, expected in 2025.

Moreover, our Trade Association Standard, an internal Unilever document approved by the Unilever Leadership Executive, has been updated to give guidance to all our country teams. It sets out that, at the point of joining or renewing membership (typically an annual process) they must seek confirmation from industry associations that their climate policy work is consistent with Unilever's positions and the 1.5°C ambitions of the Paris Agreement.

This process is led by the business lead who manages the day to day relationship with the industry association.

We believe that an industry association's continuous improvement is more important and constructive than setting deadlines to reach alignment. If an industry association's position cannot be made consistent with Unilever's, or no improvement is being made to reach alignment over a 12-month period, the issue is escalated to the budget holder, in consultation with the Communications and Corporate Affairs team. At this point, we will determine whether to withdraw our membership and make our withdrawal public.

In some instances, there may be a disagreement regarding positions taken, but Unilever decides that its interests are best served by retaining membership. If this happens, Unilever reserves the right to make a public statement to this effect. We will then continue to work with the industry association to seek to align its climate policy position with Unilever's.

In other instances, associations may be aligned with a Unilever position, but not active in engagement. In these circumstances we will work with the industry association to determine how they can become more proactive in this space.

The last layer is our wider influence on society and it's huge. It includes high-level advocacy in support of the Paris Agreement goals and work on quite specific issues on nature and the voluntary carbon market. We're also part of trade associations and business coalitions helping to speed up climate action. [...] That's where we come in, in terms of how we engage not only with governments, policymakers and regulators but also with other businesses and platforms. Unilever can help highlight the need to make policy shifts and draw on our experience to show how it's good for business and the economy. By taking a leadership role, we can embolden governments to be more ambitious, which in turn gives businesses the confidence to take action.

Unilever has already committed to ensuring that all direct lobbying relevant to climate policy is consistent with our stated objectives in delivering the 1.5-degree ambition of the Paris Agreement. However, direct advocacy is not the only form of policy influence that a business exerts. Unilever has long championed the importance of aligning indirect climate lobbying (through trade associations) with an organisation's climate position. In 2019, we asked our trade associations to confirm whether their policy engagement matched the 1.5-degree ambition of the Paris Agreement. Our intervention was positively received, and in several cases, it triggered a discussion about clarifying existing positions. We believe this is a growing area of importance, and beginning later this year, we will publish: • An annual list of our principal trade associations • A climate policy position that we will use to assess trade association membership renewals. [...] The Board takes overall accountability for the management of all risks and opportunities, including climate change. Our CEO and Executive Board member, Alan Jope, is ultimately responsible for oversight of our climate change agenda. The Corporate Responsibility Committee and Audit Committee review our climate reporting and receive presentations from sustainability experts, including the Sustainability Advisory Council, which includes external sustainability leaders from civil society organisations and academia. [...] The Board is supported by the Unilever Leadership Executive (ULE). The ULE meet monthly to discuss key strategic matters. During 2020, several agenda items related to climate change were discussed, including progress against our climate goals. Additional specialist governance groups are in place to support our climate agenda and ULE decision making, including: • The Carbon Neutral Board: Drives delivery of our carbon ambition at the corporate and country-level and leads strategic partnerships and policy on renewables. It is chaired by our Chief Supply Chain Officer, Marc Engel. • The Sustainable Sourcing Steering Group: Supports our strategy focusing on long-term, sustainable access to our key crops. It is chaired by our Chief Procurement Officer, David Ingram. Having submitted this Climate Transition Action Plan for a shareholder advisory vote at Unilever's Annual General Meeting on 5 May 2021, we propose to report annually from 2022 on progress made in implementing the plan. We also propose to submit an updated plan for shareholder approval at the AGM every three years, noting any material changes we have made or propose to make.

How do we work with coalitions and trade associations? : For our advocacy to be effective, we need support from other powerful actors to whom governments will listen. That includes cross-industry coalitions seeking to pioneer net zero pathways. For example, we're working with the WBCSD and the Exponential Roadmap Initiative, as well as We Mean Business Coalition's Fossil to Clean campaign, to accelerate the clean energy transition globally. We're also pushing our trade associations to be more transparent about their own climate positions and statements. Earlier this year, we published our first climate policy engagement review. Where this showed room for improvement, we're calling on them to step up.

We will need to be more systemic in our advocacy

We know there are still challenges for delivering on our goals, some of which we cannot overcome without wider systems change. Within the CTAP, we've outlined our dependencies and how we will need to work with governments, regulators, industry and consumers to address barriers, drive innovation and scale solutions, now and in the years ahead.

Collaboration with key suppliers to accelerate climate action, with industry to find alternatives to chemical ingredients, with trade associations (PDF 1.39 MB) to align on our positions and with governments as we step up our advocacy will all help us to deliver our vision of a new era of sustainability leadership, under our Growth Action Plan.

By more forcefully using our voice and convening power to address enablers and blockers of our progress, we believe we can move faster towards our goals and help accelerate the transition to net zero – while also driving success for our business.

## Identifying and managing Policy compliance and non-compliance in our own operations and supply chain

###### Only In-Scope Materials that we believe are produced in accordance with this Policy will be knowingly bought by Unilever. We are committed to the independent verification of compliance with the Policy principles. Where the means and methodologies for independent verification are not well defined or developed, we will work collaboratively with suppliers and other stakeholders to develop scalable methodologies.

Unilever works to verify and address Policy non-compliances, including grievances, found in our own operations and supply chain. Unilever commits to the responsible handling of allegations of non-compliance through Unilever's grievance process which is open both to our own employees and to third parties and sets out our procedures for addressing allegations of non-compliance with this Policy.

## Requirements and clarifications for our DIRECT Suppliers

We expect that our Direct Suppliers have
their own equivalent or stronger policies,
procedures, and management systems in
place. Where their own policies, procedures
and management systems are not yet in place,
or are not yet sufficiently robust, we will work
with such Direct Suppliers to reach this goal in
a mutually acceptable timeframe.

We may, after due diligence, choose to accept
as equivalent a benchmarked policy or policies
of a Direct Supplier, in place of the principles
contained within this Policy.

We require that our Direct Suppliers have
effective control mechanisms in place
to determine Policy compliance or non­
compliance and operate transparently to
provide sufficient evidence of control and/or
compliance mechanisms.

We require that all Direct Suppliers have in
place administrate grievance mechanisms
that are aligned with the UN Guiding
Principles on Business and Human Rights and
which are accessible to those who need it.
Unilever requires that Direct Suppliers share
proactively, or as requested by Unilever, any
non-compliant issues arising under such Direct
_Supplier grievance mechanisms._

For Unilever's supply chain, we require that our
_Direct Suppliers' compliance with this Policy's_
principles and that of their third-party supply
_chain be independently verified. We expect that_
our Direct Suppliers independently verify the
compliance of their third-party supply chains
with this Policy's principles, irrespective of the
buyer of the materials.

For Unilever's supply chain, we require
that Direct Suppliers remediate their
non-compliance where they have caused
or contributed to a breach of this Policy's
principles. Where a Direct Supplier refuses to
engage or take steps to remediate or mitigate
a breach of this Policy, Unilever will take
appropriate steps to address this in a manner
consistent with our upholding of our commitment
to the principles set out in this Policy.

We expect that our Direct Suppliers remediate
non-compliance that they caused or
contributed to within their corporate group
operations and third-party supply chains,
irrespective of the buyer of the materials.

###### grievance process which is open both to our own employees and to third parties and sets out our procedures for addressing allegations of non-compliance with this Policy.

Unilever takes any verified breaches of this Policy seriously. Unilever will remediate non-compliance in our own operations where our own operations have caused or contributed to a breach of this Policy's principles.

We will report annually on the progress we have made with implementing our plan, in line with the recommendations of the Task Force on Climate-related Financial Disclosures, and will participate in the annual CDP disclosure process. We will also submit an updated CTAP for an advisory shareholder vote at our AGM every three years, noting any material changes we have made or propose making.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Trade Associations:

We've long championed the importance of aligning indirect climate lobbying through trade associations. Since 2019, we've asked the trade associations, of which Unilever is a member, to confirm that their lobbying activities are in line with the Paris Agreement too. In some cases, this triggered discussions to clarify existing positions and we'll continue our efforts in this area, publishing an annual list of principal trade associations. We've committed to ensuring that all direct lobbying relevant to climate policy is consistent with the Paris Agreement. At the end of 2021 we published our climate policy position on our website for indirect climate lobbying. The climate crisis has now reached a point where there can be no room for misinterpretation on the scale of the challenge, or indeed on the importance of regulatory measures to support businesses in driving the transition to a net zero emissions economy. Therefore, Unilever believes strongly in working with trade associations that hold similar advocacy positions and alignment with our broader climate objectives.

We are respectful of others' views and perspectives and where differences arise, we may publicly disagree from a trade association position. On major issues, if our views and those of an association cannot be reconciled, then we will be prepared to withdraw our membership.

Policy Makers:

We work directly with governments, regulators and legislators, and through trade associations, to help develop laws and regulations that may affect our business. For example, we participate in policy discussions on global issues like climate change, as well as detailed subjects like product safety standards.
We were an early signatory to the We Mean Business open letter to G20 leaders calling for higher ambition ahead of the COP26 conference in 2021. Subsequently we partnered with the UK government as a Principal Partner of COP26 in Glasgow. Our CEO served as a member of the COP26 Business Leaders Group to rally UK and international businesses. During the conference, we participated in numerous events including the World Leaders Summit, the Forest, Agriculture, Commodities and Trade (FACT) dialogue to reduce emissions in commodity value chains and events on creating high integrity standards for voluntary carbon markets. We also developed a climate advocacy toolkit to support our market teams to push for higher climate ambition.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes