Unilever, one of the world’s leading suppliers of consumer goods, is now also one of the most sustainable and ethical companies on the planet. But it hasn’t always been this way. So how did the transformation happen?
Unilever was born from a 1930s merger between Dutch margarine company Margarine Unie, and British soapmaker Lever Brothers. It has now grown into a consumer giant with operations on every continent bar Antartica. In 2014, it employed 172,000 people worldwide and registered sales of €48.4 billion, while committing to a business plan which looks to decouple growth from environmental impact and improve worker rights and opportunities.
It hasn’t always had the ethical renown it enjoys today though. It was, for example, accused by Greenpeace UK of sourcing palm oil irresponsibly and contributing to deforestation in 2008.
The turnaround began when Dutch businessman Paul Polman was appointed CEO in 2009. Unilever is now thought of as a model of sustainable growth, and seeks to create ‘transformational change’ in three main areas: deforestation, sustainable agriculture, and universal access to safe drinking water, sanitation and hygiene.
The company declares: “We believe that improving human development and combating climate change must go hand in hand. We also recognise that empowering women is crucial and we are creating opportunities for their greater involvement in our value chain.”
Sustainable Living Plan
Unilever’s Sustainable Living Plan, launched in 2010, aims to double the size of the business while reducing its environmental impact and increasing its positive social impact.
The company, in its UK & Ireland Summary of Progress 2014, reported that the plan had helped 397 million people improve their health and hygiene habits, caused a 37 per cent reduction in CO2 from energy since 2008, and a 12 per cent reduction in waste associated with the disposal of Unilever products by consumers since 2010. By the end of 2014, 55 per cent of agricultural raw materials were sourced sustainably, and the plan is for this to rise to 100 per cent by 2020.
Unilever said The Sustainable Living Plan is committed to enhancing lives; aiming to empower 5 million people, have a positive impact on 5.5 million people, and advance human rights across the operations and the supply chain, all by 2020.
Engagements rates are high at Unilever, and the company believes its employees buy into, and are excited by the Sustainable Living Plan. It has successfully rolled out its USLP in Action engagement programme in a number of countries. The programme was, for example, participated in by 73 per cent of employees in Benelux in 2013.
Unilever has been hugely influential in its approach to CSR. In 2011 it declared that CSR departments were redundant; announcing that if you have a CSR department, you are framing CSR as an add-on. Instead, the company pioneered a strategy which sees CSR being built into the fabric of the organisation instead.
Polman banned quarterly reporting to the City, arguing that this form of short-term economics is both unhelpful and at the heart of a lot of the modern world’s problems. The Unilever man is a proponent of cooperation as well as competition, calling for a joined-up approach from business, governments and NGOs to deal with the world’s most serious challenges.
He is seen as a leader in corporate sustainability, and his vision has seen Unilever emerge as an influential model of long-termism. He has been outspoken on the need for big business to abandon an obsession with profit, and is trying to show business leaders that growth and sustainability can exist side by side without the need for compromise.
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Photo credit: Gerard Stolk from Flickr