How Hindustan Unilever Cut Factory Emissions by 99% — And Why the Harder 90% Still Lies Ahead

By ESG World News Research Desk  ·  June 2026-  “At HUL, energy efficiency is integral to our operational excellence, underpinning our commitment to climate action as the cornerstone of our ESG strategy.”

When Hindustan Unilever Limited first set its sustainability baseline in 2008, few would have predicted that within 17 years the company would be running 27 factories almost entirely on green energy. Yet that is precisely where India’s largest fast-moving consumer goods company stands today — and the numbers make for remarkable reading.

Reaching 9 out of 10 Indian households with brands such as Surf Excel, Lux, Dove, Horlicks and Brooke Bond, HUL is not a niche green startup. It is a ₹60,000-crore-plus enterprise that has managed to decouple growth from emissions in its own operations while simultaneously building one of India’s most sophisticated supplier decarbonisation programmes.

But a closer look at where the company’s emissions actually come from reveals both the scale of progress achieved and the magnitude of what remains. Because while HUL has almost eliminated Scope 1 and 2 emissions — those from its own factories — roughly two-thirds of any FMCG company’s carbon footprint typically resides in the supply chain it does not directly control.

This is the central tension at the heart of HUL’s climate story: extraordinary operational transformation, with the harder work still to come.

THE NUMBERS

A Manufacturing Transformation in Five Statistics

Start with the headline figure. Against a 2008 baseline, HUL has reduced its Scope 1 and Scope 2 greenhouse gas emissions intensity — measured per tonne of production — by 99%. Not nine per cent. Not ninety. Ninety-nine.

These are not aspirational targets. They are reported actuals, disclosed in HUL’s Business Responsibility and Sustainability Report for FY 2024–25 and independently referenced in S&P Global’s Sustainability Yearbook 2024, which ranked HUL #1 in India in LSEG ESG ratings for the Personal and Household Products sector.

Sources: HUL BRSR FY 2024–25 (hul-performance-highlights.hul.co.in); HUL Integrated Annual Report FY 2025–26; S&P Global Sustainability Yearbook 2024.

ENERGY & CLIMATE

From Coal to Clean: The Renewable Energy Journey

The backbone of HUL’s operational decarbonisation is a systematic exit from fossil fuels — beginning with electricity and extending to thermal energy, the harder half of the equation.

All electricity across HUL’s manufacturing sites is now sourced from renewables: a combination of onsite solar, wind power purchase agreements and International Renewable Energy Certificates (IRECs) for grid power. The company has installed 30 MW of solar panels across its factories, with another 1 MW under construction, and secured a 45 MW offsite solar project to expand capacity further.

But electricity is only part of the energy story. Thermal energy — the heat used in manufacturing processes — is significantly harder to decarbonise, because it traditionally relies on furnace oil, high-speed diesel and coal. HUL has moved to replace all three: coal has been eliminated entirely, substituted with biomass; furnace oil and diesel are being replaced with biofuel.

As of March 2025, 97% of both electrical and thermal energy combined comes from renewable sources. Fourteen of HUL’s 27 manufacturing sites have met Unilever’s strict internal RE100 criteria, defined as zero Scope 1 and 2 CO2 emissions from the site.

Energy efficiency alongside energy switching: The company has also invested in heat pumps, magnetic chillers, energy-efficient motors, variable voltage and frequency drives (VVFDs), thermic fluid heaters and energy-efficient air handling units — together achieving a 49% reduction in total energy intensity per tonne of production versus the 2008 baseline.

LOGISTICS & SUPPLY CHAIN

‘Load More, Travel Less’: Cleaning Up the Distribution Chain

Manufacturing is where HUL has made the most dramatic gains. But transportation and logistics represent a significant and growing source of emissions — and the challenge here is structural, involving hundreds of third-party transport operators across India’s vast geography.

HUL’s logistics decarbonisation strategy centres on a programme it calls ‘Load more, travel less’ — a freight efficiency initiative that maximises vehicle utilisation to reduce the total number of journeys made. The logic is straightforward: fewer trucks moving fuller loads means lower emissions per unit delivered.

Beyond optimisation, the company is actively shifting its fleet’s fuel mix:

• LNG (Liquefied Natural Gas) and CNG (Compressed Natural Gas) vehicles are being introduced for long-haul and inter-depot freight, with CNG trucks shown to reduce GHG emissions by approximately 30% compared to diesel equivalents.
• Electric vehicles have been integrated into the last-mile distribution network. HUL’s last-mile fleet now includes over 100 EVs, deployed primarily in metro markets, with plans to expand to non-metro cities through partnerships with OEMs and logistics service providers.
• Bio-CNG and hydrogen are being explored as future fuel options for geographies where battery EVs are not yet viable.

Structural changes to the distribution network — reducing the number of intermediary steps and improving service from fewer, better-located depots — also contribute to emissions reduction by shortening the total distance goods travel from factory gate to shelf.

SCOPE 3 & SUPPLIER ENGAGEMENT

The Harder 90%: Tackling Supply Chain Emissions

“Emissions from raw materials, ingredients and packaging contributed approximately 63% of Unilever’s greenhouse gas emissions in 2023.” — Unilever Supplier Climate Programme

Here is the uncomfortable arithmetic of sustainability at scale. Even with 99% Scope 1 and 2 reduction, HUL’s actual climate impact is determined primarily by what happens outside its factory gates — in the farms that grow its palm, the chemical plants that supply its surfactants, the packaging manufacturers that produce its bottles and wrappers.

Globally, Unilever estimates that approximately two-thirds of its total value chain emissions come from purchased goods and services alone. For HUL, this means the supply chain — not the factory — is where the climate battle will ultimately be won or lost.

The company is responding through its Supplier Climate Programme, operating under Unilever’s global framework. As of 2024, Unilever engaged with 291 suppliers across its value chain — covering approximately 42% of Scope 3 emissions within scope of its net zero ambition — to accelerate climate action and build measurement capacity. Of those, 181 suppliers were actively participating in the programme.

The programme works in three ways:

• Helping suppliers develop costed decarbonisation plans with actionable pathways to reduce emissions.
• Strengthening Product Carbon Footprint (PCF) data collection so that HUL has an accurate picture of where its Scope 3 emissions actually sit.
• Identifying and scaling lower-emission alternatives within the supply base.

A striking example of the last point: HUL has partnered with Tuticorin Alkali Chemicals and Fertilizers Limited to scale the use of low-greenhouse-gas soda ash — a key ingredient in laundry detergents — replacing a carbon-intensive input with a cleaner alternative without compromising product performance. The partnership was showcased at HUL’s ‘Clean Future Summit’ in August 2023, where 18 key suppliers signed a Climate Pledge.

In product formulation, HUL is also reducing the carbon footprint of the products themselves. In 2024, its R&D teams developed ‘Stratos’ — a path-breaking reformulation of its soap bars business that reduces the use of high-GHG-impact palm oil and shifts to deforestation-free palm sources.

NET ZERO TARGET & CTAP

2039: The Net Zero Deadline — and What It Will Take

HUL’s overarching climate target is aligned with Unilever’s global Climate Transition Action Plan (CTAP): net zero emissions across the entire value chain by 2039. This ambition was backed by 97.59% of shareholder votes at Unilever’s 2024 AGM and validated by the Science Based Targets initiative (SBTi), which confirmed that Unilever’s proposed Scope 3 targets conform with SBTi criteria.

The 2039 net zero target is flanked by near-term milestones that provide accountability:

• Zero emissions from manufacturing operations (Scope 1 and 2) by 2030.
• A 42% reduction in absolute Scope 3 emissions from purchased goods and services by 2030 (vs a 2021 baseline).
• A 30.3% reduction in forest, land and agriculture emissions by 2030.

Achieving these targets requires transformation not just in HUL’s own operations but across the Indian industrial ecosystem it is embedded in — from agriculture and chemicals to packaging and cold chain logistics. This is why the company’s approach extends beyond supplier engagement to industry-level collaboration.

HUL is a founding member of the FICCI Centre for Sustainability Leadership, designed to accelerate climate action across India’s corporate sector, including SMEs and MSMEs. It has also partnered with IIM Bangalore’s NSRCEL startup hub to launch a Climate Incubation Hub supporting climate-tech startups. And it is an active participant in the G20 Resource Efficiency Circular Economy Industry Coalition (RECEIC), formed during India’s G20 Presidency with support from the Ministry of Environment, Forest and Climate Change.

The company also participates in India’s chemicals industry decarbonisation — India’s chemical sector, the sixth-largest globally, contributes approximately 7% of GDP but is a significant GHG emitter. HUL is working to shift its home care products from fossil-based to renewable and recycled chemical feedstocks, a transition it describes as critical to India achieving net zero by 2070.

CONTEXT & PERSPECTIVE

The Limits of Operational Decarbonisation

HUL’s operational achievements are genuinely exceptional by any benchmark. A 99% reduction in factory emission intensity, 97% renewable energy and zero coal, achieved while growing production — this is what deep decarbonisation looks like in a large, complex industrial operation.

Yet the company’s own reporting is candid about where the limits lie. The BRSR FY 2024–25 acknowledges that the priority action areas for near-term Scope 3 target delivery include supplier engagement, product reformulation, forest-risk commodities, regenerative agriculture, chemical ingredients, packaging and logistics — in other words, almost every part of the value chain beyond the factory floor.

Globally, Unilever’s 2024 total GHG emissions were approximately 105.8 billion kg CO2e — of which Scope 1 amounted to 480 million kg, Scope 2 to 690 million kg, and Scope 3 to approximately 53.8 billion kg. That ratio underlines the point: operational emissions, where HUL has made such dramatic progress, represent a small fraction of the total.

The transition of suppliers — particularly in India’s complex, fragmented supply base — to clean energy and low-carbon processes will require not just corporate programmes but policy support, infrastructure investment and financing mechanisms that currently do not exist at the required scale.

HUL’s trajectory suggests it understands this. The company is not treating sustainability as a compliance exercise but as a core business strategy — embedded in what it calls its ‘ASPIRE: Unlocking a Billion Aspirations’ growth framework, where sustainability is listed as a key pillar alongside market competitiveness and innovation.

Whether that framing survives the harder, more expensive, more politically complex work of Scope 3 decarbonisation will be the defining sustainability question for HUL — and for every large FMCG company operating in emerging markets — over the next decade.

BY THE NUMBERS

HUL ESG Scorecard — FY 2024–25

SOURCES & REFERENCES

All figures and claims in this article are drawn from primary sources:

• HUL Business Responsibility & Sustainability Report (BRSR) FY 2024–25 — hul-performance-highlights.hul.co.in/performance-highlights-fy-2024-2025/brsr/
• HUL Integrated Annual Report FY 2025–26 — hul.co.in
• HUL Climate Page — hul.co.in/sustainability/climate/
• HUL ‘Journey Towards Renewable Energy-Powered Operations’ — hul.co.in/news/2024 (December 2024)
• HUL ‘Integrating EVs in Our Last Mile Network’ — hul.co.in/news/2024 (April 2024)
• HUL Suppliers & Business Partners — hul-performance-highlights.hul.co.in/fy-2023-2024/suppliers-and-business-partners
• Unilever Climate Transition Action Plan (CTAP) — unilever.com/sustainability/climate/
• Unilever Supplier Climate Programme — unilever.com/suppliers/supplier-climate-programme/ (2024)
• Unilever ‘Aligning Business & Government Climate Plans’ — unilever.com/news (January 2026)
• Unilever BRSR FY 2023–24 — hul-performance-highlights.hul.co.in/performance-highlights-fy-2023-2024/
• S&P Global Sustainability Yearbook 2024 — spglobal.com
• DitchCarbon: Unilever Emissions Breakdown 2024 — ditchcarbon.com/organizations/unilever
• Research on Sustainable Practices in HUL Logistics & Supply Chain — ResearchGate (2025)
• OneStopESG: How Unilever is Advancing Sustainability in 2025 — onestopesg.com (December 2025)

ESG World News  ·  esgworldnews.com  ·  This article is for informational purposes. All data sourced from public company disclosures.