Unilever to invest £890 million to eliminate fossil fuels from cleaning products by 2030

In an announcement on Wednesday, Unilever plc (LON: ULVR) said that its cleaning products will no longer use fossil fuels by 2030. The company expressed plans of investing £890 million to hit this target that is attributed to minimising carbon emissions.

Unilever closed about 2% up in the stock market on Wednesday. At £45.33 per share, shares of the company have recovered more than 20% since a year to date low of £37.25 per share in March when the impact of COVID-19 was at its peak. Unilever had started the year at a per-share price of £43.47.

Unilever is collaborating with biotech firms and chemical manufacturers

The consumer goods company said that it will switch the use of petrochemicals in its cleaning products with constituents from marine, plants, and a range of other biological sources. According to Unilever, about 46% of carbon emissions from its Home Care division are attributed to its laundry and cleaning products.

Following the switch, the British-Dutch multinational will be able to minimise carbon emissions by about 20%. As per Unilever, it is the first company in its niche to commit to cutting emissions. In June, Unilever proposed to merge its Anglo-Dutch legal structure into a single UK-based holding company.

President Peter ter Kulve of Unilever’s Home Care business said that the company was collaborating with biotech firms and chemical manufacturers like Dow Chemical to explore environment-friendly alternatives to fossil fuels for its cleaning products. He said:

“The writing is on the wall. The next phase is industry change in chemicals and cleaning agents. Many of these big suppliers still have a lot of capital still locked in the old carbon economy.”

Unilever wants to minimise emissions to net-zero by 2039

The £890 million investment, as per Unilever, will help its partner biotech companies to research and ramp up the production of water-efficient and biodegradable product formulations.

Unilever’s global carbon dioxide equivalents emissions are currently at 100 million metric tonnes. By 2039, the company aims at slashing emissions to net zero, both from its suppliers and its own operations. Unilever also said on Wednesday that it was looking forward to acquiring Liquid IV (hydration mix brand).

At the time of writing, Unilever is valued at £117.64 billion and has a price to earnings ratio of 22.67.