Global Index 2018

Unilever

Reported product categories
Canned / Preserved Food, Ice Cream, Noodles, Oils, Sauces, Soups, Soft and hot drinks, Spreads
PDF
Rank 2 / Score 6.7
Rank 1 (2016)
Product Profile
Rank 12 / Score 4.2

Corporate Profile

Nutrition

4/6.6

Undernutrition

2/6.2

Main areas
of strength

  • Unilever’s score has increased from 6.4 (out of 10) in 2016, to 6.7 in 2018. Despite this slight increase, the company now ranks second on the 2018 Global Index.
  • Unilever is a strong performer across most categories of the ATNI methodology. From its high-ranking 2016 performance the company has shown incremental improvements across most categories. However, the company has lost its leading position in the overall ranking and on healthy product formulation (Category B) because other companies have improved more.
  • Unilever has a comprehensive, global governance system and a clear focus on health and nutrition through its Unilever’s Sustainable Living Plan, which contains three overarching goals including 'Improving Health and Well-being'. The company commits to contribute to SDG 2 (Zero Hunger) and SDG 3 (Good Health and Well-being) through this approach, which is fully integrated into its business strategy and, according to Unilever, is commercially successful.
  • Unilever’s commitments on responsible marketing to all consumers and to children are strong. It only markets healthy products to children aged 7-12 and it has recently updated this approach by implementing stricter nutritional criteria for healthy products. As in 2016, the company publishes its individual level of policy compliance achieved relating to marketing to children, as assessed through a global industry association.
  • Unilever has introduced a ‘Global Maternal Well-being Standard’ in 2017, setting a minimum standard of care and support for female employees. It is one of only three companies that arranges paid maternity leave between 3-6 months and provides other support for breastfeeding mothers as well.
  • Addressing undernutrition is a strong focus within Unilever’s commercial strategy. Unilever has changed its non-commercial approach, which was driven through the company Foundation previously, but is now integrated within commercial category strategies. Unilever works in partnerships with relevant organizations to fight undernutrition in higher-priority countries.

Priority areas
for improvement

  • Unilever reports that 35% of its sales volume is derived from products that meet the company’s definition of healthy. The Product Profile assessment, using the Health Star Rating (HSR) system across nine countries, estimated the percentage of healthy products to be substantially lower, and a similar discrepancy was found for the percentage of products that met nutritional criteria to be suitable to be marketed to children. Unilever should therefore review its NPS to ensure that its nutritional criteria align with internationally recognized systems such as the HSR system.
  • Unilever ranks twelfth on the Product Profile assessment with a score of 4.2 out of ten, based on an assessment of their major product categories in nine countries. Unilever was estimated to derive only 10% of its total sales from healthy products, i.e. achieving a rating of 3.5 stars or more on the HSR system. These findings illustrate that Unilever has significant scope to improve the healthiness of its portfolio through product reformulation, innovation and/or portfolio changes.
  • Similar to 2016, Unilever does not define product reformulation targets to increase the levels of fruits, vegetables, nuts, legumes or whole grains in relevant products. This aspect is also missing from its otherwise well-designed and implemented NPS.
  • Despite making broad commitments to improve the affordability and accessibility of its healthy and fortified products, Unilever is encouraged to develop and/or disclose a global strategy with concrete objectives to ensure the affordability and accessibility of its healthy and fortified products for low-income groups in developed and developing countries.
  • Unilever’s responsible marketing strategy could be further improved by extending its commitments to refrain from marketing in or near primary and secondary schools, and by applying a stricter audience threshold, lowering it from 35% to the leading practice level of 25%.

Category Analysis

Governance

Category A - Governance 12.5%

Category B - Products 25%

Category C - Accessibility 20%

Category D - Marketing 20%

Category E - Lifestyles 2.5%

Category F - Labeling 15%

Category G - Engagement 5%

Nutrition

A1
Strategy
A2
Management
A3
Strategy
B1
Formulation
B2
Profiling
C1
Pricing
C2
Distribution
D1
Policy (all)
D2
Compliance (all)
D3
Policy (children)
D4
Compliance (children)
E1
Employees
E2
Breastfeeding
E3
Consumers
F1
Facts
F2
Claims
G1
Lobbying
G2
Stakeholder

Undernutrition

Nutrition

  • Unilever demonstrates strong governance on nutrition and a focus on health and nutrition in its central business strategy: the Unilever Sustainable Living Plan (USLP). It has been in place since 2010 and focuses on improving health and well-being, as well as on a broader range of sustainability objectives. Nutrition is a core component of this strategy, which is rigorously implemented in the company’s commercial approach, growth strategy, business risk assessments and decisions about mergers and acquisitions. Unilever reports that 'USLP brands' performed better financially than other brands in 2016, illustrating the commercial success of their integrated approach.
  • The company clearly recognizes its role in addressing diet-related chronic diseases, such as heart health, obesity and undernutrition, and commits to contribute to SDG 2 (Zero Hunger) and SDG 3 (Good Health and Well-being). The company commits to providing nutritious food that is accessible for all but does not make an explicit reference to low-income populations. The company could improve by explicitly committing to serve these populations with healthy and affordable products.
  • Unilever publishes a global nutritional policy document and discloses its ‘Improving Nutrition’ strategy on its website. Linked to its overarching 2020 goal to help over a billion people to improve their ‘health and well-being’, the company defines concrete and comprehensive targets to improve nutrition. The company consistently defines and reports these targets in relation to sales volumes to drive consumption of healthy foods rather than price.
  • Unilever is transparent about its well-arranged nutrition governance. Formal accountability for aspects of the nutrition strategy rests with various members of the Unilever Executive Board, who are also members of the USLP steering committee. However, the company could improve its disclosure of the day-to-day responsibility for the for the nutrition strategy. CEO compensation arrangements are disclosed and linked to USLP targets, but the company could improve by linking it directly and explicitly to targets to improve nutrition.
  • The USLP Council advises the company on its USLP strategy and focuses on a wide range of sustainability issues, but the relevance of the areas of expertise of this council in relation to nutrition is not obvious. Therefore there is no evidence that a formal panel of relevant experts is in place to advise the company on a strategic level on preventing and addressing obesity and diet-related chronic disease. The company should improve on this point.
  • Unilever provides annual and comprehensive nutrition reporting in its Sustainable Living Report, reflecting on progress towards 2020 commitments, including the commitment to double the proportion of products that meet the company’s healthy criteria. The reporting on USLP targets is combined with reporting on economic growth, also in its Annual Report and Accounts. The company is commended for having its nutrition reporting independently verified at regular intervals. The company provides limited local reporting for national markets and can improve its score by providing more reports per major market, explaining how its approach is adapted to each local nutrition and health context.

Undernutrition

  • Unilever commits to play a role in fighting undernutrition in low-income countries with a strong, strategic focus that is anchored in two of the main goals of its central USLP strategy: “Improving Health and Well-being” and “Enhancing Livelihoods”. Unilever achieves the highest undernutrition score in Category A. It commits to offer fortified foods at an affordable price in developing and emerging markets. Unilever states it is accelerating efforts on undernutrition to help deliver the relevant SDGs and states an additional commitment to provide 200 billion fortified product servings with at least one of five key micronutrients (iodine, vitamin A, vitamin D, zinc and iron) by 2022. The company could enhance its commitment by expressing it in terms of meeting or solving a nutritional need or deficiency, rather than focusing on a number of servings.
  • Unilever has evolved its non-commercial approach since 2015. It no longer works through its foundation as an independent philanthropic arm of the business, but instead integrates activities with social and environmental impact into its category strategies. Within this new approach it still works in partnerships on non-commercial programs with relevant organizations, including Oxfam, Save the Children, UNICEF, the World Food Programme and others.
  • The company performed market research to assess the need and potential for addressing undernutrition commercially in more than five countries, including in India, Indonesia and the Philippines. The company includes priority populations in its approach, focusing on women of child-bearing age, children (including those under two) and families of smallholder farmers. Unilever’s programs run in many higher-priority countries, including Myanmar, Bangladesh, India, Ethiopia, Angola, Tanzania, Ghana and various others.
  • Unilever has room to improve its performance by setting up a formal panel of experts with a broad range of expertise to obtain structural and strategic advice on preventing and addressing undernutrition, as well as feedback on existing initiatives and programs.

Nutrition

  • Unilever commits to invest in R&D to make it products healthier through the Unilever Nutrition Network, part of the broader innovation team that plays a role in delivering the USLP targets. The commitment to double the percentage of products (60%) that meet the ‘Highest Nutritional Standards’ (HNS) by 2020 is a concrete commitment to deliver on R&D activities, but no financial R&D commitment is provided.
  • The company reports that 35% of products met the HNS by 2016, an increase of just 2% compared to 2014. The company should considerably scale up its efforts to improve the healthiness of their products and to meet the USLP target of 60% by 2020.
  • The reported percentage of healthy products, which is based on sales volume, is substantially higher than the results of the Product Profile assessment, which found only 10% of sales products (17% based on the number of products) is estimated to be derived from healthy products (based on a HSR of 3.5 or above, which is considered healthy.). Similarly, Unilever reports higher percentages of products that meet its criteria for marketing to children than the outcome of the assessment based on WHO EURO criteria. This suggests that Unilever’s criteria for healthy products are less strict than internationally recognized criteria and the company is strongly encouraged to align to these, revising its metrics for healthy products as needed.
  • Unilever reports to offer healthy product options across the majority of brands, meeting its criteria for healthy products for adults and children. The company could improve its score by offering healthy product choices across all brands without exception.
  • Unilever discloses all reformulation targets, nutritional criteria and performance against those criteria. The company defined a near-comprehensive set of targets to reduce relevant ‘negative nutrients’ across assessed product categories, linked to its HNS criteria, but does not define a sugar or calorie target for its ‘Soup’ category. The company did not define any targets to increase levels of fruits, vegetables, nuts, legumes, or whole grains in its products where relevant. The company is encouraged to define such targets, making them quantitative and verifiable.
  • At the core of Unilever’s nutrition strategy is a well-defined NPS that is applied globally across all products, achieving the maximum healthy multiplier that is applied across the ATNI methodology. Process-wise, the nutritional criteria within the NPS are applied consistently by the company as criteria for healthy products. Unilever is one of two companies that have published its NPS in a peer reviewed journal, which is industry best practice. However, it does not address ‘positive nutrients’ as recognized in the ATNI methodology. Unilever should update its NPS to include these.

Undernutrition

  • Unilever commits to invest in R&D to develop fortified or otherwise suitable products to fight undernutrition, both through commercial and non-commercial programs. It sets internal as well as public targets on increasing the number of fortified products, basing its fortification approach on international (Codex) guidance. Unilever could increase its transparency by publishing its fortification policy.
  • Unilever provided recent product development examples related to the relaunch of fortified spreads in South Africa and Indonesia. In addition, Unilever combines commercial products with approaches to stimulate healthy cooking and fresh food intake. The Green Food Steps program in Nigeria combines iron-fortified Knorr cubes with a program to stimulate iron-rich fresh food intake to address anaemia in women of child bearing age in Nigeria. Non-commercial programs include a partnership with GAIN to provide vitamin A-fortified foods in Vietnam.
  • Unilever does not make a clear commitment to only fortify product of high underlying quality, although it reports to do so in practice. Similarly, the company provides examples of using ingredients with high inherent levels of micronutrients, but it does not commit to seeking opportunities to do so. The company should increase clarity and transparency on its approach by making public commitments on both topics.

Nutrition

  • Unilever commits to ensure the accessibility and affordability of healthy foods as part of a three-point plan to feed 10 billion people by 2050. However, the company does not make a particular reference to low-income populations, which are most likely to have poor diets. This is an area the company should focus on.
  • The company does not have a formal policy on affordability or accessibility of healthy foods and does not disclose concrete targets beyond an aspiration to reach a certain number of people the future. There is no designated executive who is responsible for the implementation of such a policy or strategy. Unilever is strongly encouraged to develop a policy and disclose more information on their approach to specifically make healthy products affordable and accessible to low-income groups in both developed and developing countries.
  • The company mentions that analysis of pricing and accessibility is always performed as part of its normal way of working, but provided limited examples only relevant to healthy products and low income populations in developing countries. Although the company provided examples of offering discounts, price promotions or coupons on healthy products at the same or greater rate as for less healthy products in feedback to ATNF, the company does not disclose relevant information in the public domain.
  • Similar to 2016, Unilever’s commitments, performance and disclosure related to improving the affordability and accessibility of healthy products, especially for low-income populations, remains weak. The company is strongly encouraged to address this topic.

Undernutrition

  • Unilever has stated an aim to offer its own fortified foods at an affordable price and promote nutritious cooking. Although the company defines high-level goals of reaching a certain number of people or providing a certain number of fortified product servings, it does not specify explicit objectives related to affordability and accessibility. For example by reaching specific price points or reaching specific target groups through a targeted distribution approach. Unilever is encouraged to define concrete objectives on affordability and accessibility in relation to products that address undernutrition.
  • The company provided evidence of implementing both its own and joint initiatives to improve affordability and accessibility in high priority developing countries. Mirroring the approach of Unilever’s successful Shakti project in India, the Knorr ‘Gbemiga’ program trains women in Nigeria to become entrepreneurs and ambassadors for nutrition, improving the accessibility of fortified products to difficult to reach populations. Unilever partners with GAIN and Growing Business Foundation and Society for Family Health on this program. A similar approach is applied in project Zeinab, in rural areas in Egypt. Unilever provided examples of improving affordability to ATNF, for example by reducing product sizes, but could enhance its transparency in this area by disclosing information publicly.
  • Unilever’s non-commercial programs to improve accessibility cover higher-priority countries such as India, Kenya and Vietnam, encompassing school feeding programs and providing products for distribution to undernourished populations. Through a collaboration with GAIN and others, the company provided an example of using existing distribution systems, initially used to distribute safe drinking water and hygiene products in Kenya, for the distribution and sale of fortified products to undernourished consumers.

Nutrition

  • Unilever makes strong, global commitments to market its products responsibly and is transparent by publishing Unilever’s Principles on Responsible Food and Beverage Marketing Including Marketing to Children, which was last updated in July 2017.
  • Unilever commits to follow the ICC Advertising and Marketing Communication Practice code (ICC Code), thereby covering all relevant media channels and commitments related to product representation. Thus obtaining the full score for its responsible marketing commitments to all consumers. However, Unilever does not provide evidence of a formal independent third-party auditing process related to these commitments, which it should.
  • Unilever has signed up to the E.U. Pledge, CGF, IFBA and CFBAI, in addition to its own commitments regarding responsible marketing to children. The company states that it covers all media and forms of marketing under its policy but is also encouraged to improve by explicitly mentioning that sponsorship is included in its definition of marketing activities.
  • Unilever does not market to children under six, regardless of the health profile of a product, and markets only healthy products to children aged 7-12. Unilever has strengthened the latter commitment as of January 2018, applying stricter nutritional criteria than before. To guide these commitments, Unilever applies an audience threshold of 35%, which it could improve on by applying a threshold of 25% or lower.
  • Unilever commits to refrain from marketing in primary schools but does not extend this commitment to places near primary or secondary schools. The company could improve its commitments by doing so, and by extending its commitments to refrain from marketing in or near other places popular with children, as recommended by the WHO.
  • Unilever audits its compliance on marketing to children through industry association and pledge organizations, as well as internally. Unilever discloses its individual compliance results of the IFBA audit, for which it is commended. The company can further improve its performance by commissioning independent auditing to complement existing audits, and by stating explicitly that corrective action will be taken in case of non-compliance. Furthermore, the company does not provide evidence that the current auditing covers compliance across all media, beyond the media covered in industry association and pledge organization audits.

Undernutrition

  • Despite Unilever’s strong focus on addressing undernutrition and various fortified, commercial products, the company does not express a clear commitment on developing and delivering marketing strategies intended to reach undernourished consumers. The company is encouraged to increase its transparency in this area.
  • Unilever provides many examples of having generated consumer and marketing insights relating to undernourished populations. In many cases, these insights are used in programs that combine educational elements with branded marketing activities. Examples include Knorr Jok’s education program in Thailand aimed at healthy eating and cooking, Blue Band’s healthy breakfast program in Kenya and many more. This approach makes it difficult to distinguish educational activities from marketing activities. Unilever is encouraged to increase its transparency in this area.

Nutrition

  • Unilever has a codified commitment to support staff health and wellness in the Fairness in the Workplace pillar of its Sustainable Living Plan, with a program focused on physical and mental health, nutrition and well-being, based on its Global Medical & Occupational Health Strategy 2016-2020.
  • As in 2016 and before, Unilever’s Lamplighter employee health & well-being program is available globally. A target is in place to implement the program in all countries of operation with over 100 employees by 2020. The program encompasses health assessments, exercise, nutrition, mental resilience and individual well-being scorecards. The company articulates expectations in terms of health and business benefits and it conducts its own assessments of the outcomes of the program. The company is encouraged to extend the program’s availability to family members, to conduct third-party evaluations and to disclose evaluation results fully.
  • Unilever developed a new ‘Global Maternal Well-being Standard’ in 2017, setting a minimum standard of care and support for female employees. The company is one of only three companies to provide a minimum paid maternity leave between three and six months globally, in addition to relevant facilities to support breastfeeding mothers. The company is encouraged to further improve its performance by publishing its policy and extending paid maternity leave to six months.
  • Unilever offers a wide range of programs to educate consumers on nutrition and healthy lifestyles, focusing specifically on heart health and good nutrition among the young and old. The programs cover aspects of healthy diets comprehensively, including breastfeeding education in its Baby Dove program. The company makes a conscious choice not to exclude brand-level sponsorship and it supports independently designed and implemented programs in addition to its own. Unilever is encouraged to exclude brand-level sponsorship and have all programs designed, implemented and evaluated by third parties with relevant expertise, to ensure that educational programs are not used for marketing activities.

Undernutrition

  • Similar to 2016, Unilever runs many consumer-oriented educational programs in higher-priority countries that cover a range of relevant topics in relation to undernutrition: the benefits of a diverse diet, of consuming fortified foods (or foods inherently high in micronutrients), of exclusive breastfeeding and of safe, timely and adequate complementary feeding for infants and young children.
  • For example, Unilever runs the ‘Your milk can save lives’ campaign in Brazil to drive awareness regarding breast-milk donation, especially to support premature babies. The campaign has led to increases in the number of milk donors and the total number of donations. Unilever and GAIN have created a global program to help improve the health and nutrition of 2.5 million people in rural areas in developing countries, which are difficult to reach. This program will cover Unilever’s 800,000 smallholder farmers and their families, with a specific focus on female farmers, pregnant women and young children. Apart from promoting the importance of healthy foods and a diverse diet, participating families are given the means to grow their own kitchen gardens.
  • Unilever does not publish a policy or commitments regarding the types of programs to be funded. The company could further improve its approach by distinguishing between educational and marketing activities, by committing to exclusively supporting programs designed and implemented by independent third parties with relevant expertise and by increasing transparency regarding its approach.

Nutrition

  • Unilever continues to have strong commitments and performance regarding nutrition labelling, as in 2016. It commits to provide the "Big 8" nutrients on back-of-pack labels, or a smaller selection of nutrients if the product package size is limiting. In addition, it provides a percentage of daily recommendations for five nutrients as well as information on portion sizes for single and multiple portion packages.
  • Unilever commits to use an icon on front-of-pack labels, showing energy content as a percentage of the daily recommendation. Unilever is part of an initiative to develop a new front-of-pack labeling system in the EU but does not make a commitment to implement interpretative front-of-pack labeling globally. The company should do so and, like all companies, it should ensure to not undermine existing local interpretative FOP labeling systems by implementing alternative or additional systems.
  • Unilever discloses on its website that it implemented its full labeling commitments for 92% of products, but does not report information on the number of markets in which commitments are fully implemented. Unilever commits to fully roll out its commitments, covering all markets, and is encouraged to follow up on this.
  • As in 2016, Unilever has a global set of guidelines for making health claims on its food and beverages which follow best practice and are applicable to all markets. These guidelines are not public, but since 2016 Unilever has published a position statement on its use of nutrition and health claims that addresses the main principles of Unilever’s approach. Unilever could further increase its transparency by tracking and disclosing the percentage of SKUs (stock keeping units) that meet its healthy standard and which carry nutrition or health claims.

Undernutrition

  • As in 2016, Unilever commits to labeling all products in all markets that have been fortified with micronutrients, as described in its internal fortification guideline. The company also has guidelines in place to ensure that fortified products only carry health and nutrition claims when consistent with Codex standards in the absence of a national regulatory framework. Unilever makes the latter commitment in a new position statement on nutrition and health claims, published since the 2016 Index. It could improve its score by publishing its labeling commitment, now expressed in the internal fortification guideline, as well.

Nutrition

  • Unilever states that its engagement with governments aligns with its Sustainable Living Plan goals. It codifies its approach to lobbying and political donations in a Code of Conduct, which is disclosed. The company does not commit to only lobby in support of measures to prevent and address obesity and diet-related chronic diseases but is encouraged to do so.
  • Unilever discloses its membership of industry associations and other organizations but does not disclose its financial support for these organizations, potential governance conflicts of interest or board seats at influential organizations. In addition, Unilever publishes a list of position statements and policies but does not provide commentary or other disclosure about its lobbying activities related to nutrition and health. The company is encouraged to improve its transparency and accountability in this area.
  • Unilever has a strong approach to stakeholder engagement. On its corporate website, Unilever reports engagement with a wide range of stakeholders in order to improve its decision-making and achieve its USLP goals. Unilever engages with international organizations, including GAIN and SUN, as well as with nutrition and health experts, in a systematic manner to informs its nutrition strategy. In addition, the company engages with various stakeholders to support the SDG agenda.

Undernutrition

  • Unilever states on its corporate website that, in order to tackle undernutrition, partnerships between governments, NGOs and the food industry are needed. However, this statement is a description of what is needed rather than a clear commitment. Although Unilever also makes other statements about engaging with governments, is encouraged to be more explicit in its commitment to support governmental efforts to address undernutrition in developing countries.
  • Unilever reports to support government efforts to address undernutrition through its work with World Food Programme, GAIN and SUN. However, the concrete examples the company provides of supporting government efforts to introduce undernutrition policy or regulation are limited to a single project with the government of Vietnam. Unilever could improve its score by providing and disclosing more such examples.
  • Unilever is involved in one-to-one discussions with various key organizations working on undernutrition, as already mentioned in this document, and uses this engagement to inform its decision-making and strategy. Unilever provides a narrative about its approach on its corporate website.

Product Profile

12
Rank 12 / Score 4.2
Average HSR score products (sales-weighted) Percentage of healthy products (sales-weighted) Percentage of healthy products suitable to market to children (sales-weighted) Number of products included in HSR and WHO EURO assessments Number of countries included in the assessment
HSR WHO EURO
2.1 stars 10% 9% 1653 1673 9
  • Unilever’s average sales-weighted HSR is 2.1 (2.3 unweighted), generating a Product Profile score of 4.2 out of 10, and it ranks twelfth.
  • The estimated percentage of products that meet the healthy threshold, weighted by sales, is 10% (17% unweighted). The proportion of products that are suitable to be marketed to children, based on WHO EURO nutritional criteria, was estimated to be 9% based on sales-weighted data (19% unweighted). The lower sales-weighted HSR-related results suggest that Unilever’s products with lower HSRs accounted for a relatively higher proportion of sales than those with higher HSRs.
  • Out of the nine countries included in Unilever’s analysis, South Africa had the highest mean HSR both before and after results were weighted by sales (2.8 and 2.7 respectively), followed by Mexico (2.7 and 2.5 respectively), with Hong Kong having the lowest HSRs (1.0 and 1.5 respectively). South Africa’s high ranking can be explained in part by the types of products evaluated. It has a larger number of products in product categories such as ‘Soup’ and ‘Processed Meat and Seafood’ compared to other countries, and these categories ranked well in terms of overall mean HSR.
  • When examining results by category, ‘Rice, Pasta and Noodles’, ‘Dairy’ (the definition encompasses margarines and vegetable oil-based butter-substitute spreads) and ‘Soup’ contained most products meeting the healthy threshold. No products in the ‘Concentrates’, ‘RTD Tea’, ‘Ready Meals’ and ‘Spreads’ categories received an HSR of 3.5 or greater.
  • Unilever ranks second on the 2018 Global Index, making strong commitments on nutrition and health, and having implemented a well-designed NPS. The results of the Product Profile assessment show relatively low percentages of healthy products, substantially lower than the 35% of products that the company reports, by sales volume, to meet the nutritional criteria in their NPS. The difference in score and rank between the two elements of the ATNI methodology suggest that, while the company has a comprehensive governance structure and well-structured commitments, there is a room for improvement and strengthening of its NPS with metrics to track the number of healthy products. Consequently, the company needs to align its focus on nutrition and health with a matching healthy product portfolio.

For full details, see the company’s Product Profile scorecard.

Product Profile
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