Recently, Unilever and CEO Paul Polman have been one of my favorite examples of brave and unparallel leadership in the sustainability space. Unilever recently announced its progress one year into the implementation of its “Sustainable Living Plan,” providing a great opportunity for reflection and assessment.
While many are asking if consumers and investors will notice and reward Unilever for its sustainability efforts, I already know the answer: Yes, they will – if Unilever has the gumption to stick with its plan for the next 5–10 years and not abandon its commitments as others, like Wal-Mart, have recently done.
But it’s an uphill battle. Polman recently noted that the financial markets still don’t understand that the company has moved beyond old-style corporate social responsibility. “With Unilever, the Sustainable Living Plan is our business model. So we spend an enormous amount of time explaining it to our investors.” Polman also noted recently that climate change is costing the company €200 million per year.
Marc Gunther, a journalist who reviewed the update in detail concluded:
“It’s obviously too soon to say whether sustainability will drive growth at Unilever, but the early evidence appears mixed. Eco-efficiency efforts in factories have reduced waste and saved money. Unilever revenues have grown nicely, to $46.5 billion in 2001, up from $44.2 billion in 2010 and $39.8 billion in 2009. But the company’s share price is up by less than 2 percent in the last year in the U.S. market, slightly trailing the Standard & Poor’s 500. (Its stock is doing better in European markets, where currency factors don’t come into play.) Meanwhile, Unilever’s corporate identity is all but hidden behind consumers brands like Lipton, Skippy, Ragu, Bertolli, Hellmann’s, Suave, Dove, Ben & Jerry’s and Breyers, at least here in the U.S. That makes it hard to win over those consumers who care about companies that do good.”
Gunther also reported on Unilever’s president for North America, Kees Kruythoff, who commented at a Washington DC event on the company’s progress. “Broadly speaking, we feel like we’ve made good progress,” he said, citing gains around agricultural sourcing, waste reduction and energy efficiency, among other things.
- 24 percent of the company’s agricultural raw materials, including palm oil, soybeans and soy oil, paper and wood, tea, fruits and vegetables, were sustainably-sourced last year.
- 48 million people in poor countries were reached with Lifebuoy soap’s hand washing program aimed at curbing disease.
- 100 percent of the electricity that Unilever buys in Europe comes from renewable sources.
- Pure-it, a water-purification technology, is expanding from India, where it already has reached 35 million people, to Bangladesh, Mexico and Brazil.
Pretty encouraging if you ask me!
This week, Unilever also announced the construction of a $100 million palm-oil processing plant in Indonesia to accelerate its commitment to buy sustainable palm oil. This is an issue that Greenpeace, where I am a US Co-Chair, and Seventh Generation have both considered as critical to sustainability.
Because palm oil is used in many personal care and household cleaning products, including soaps, detergents, shampoo, and even food products like potato chips and ice cream, and traditional palm oil plantations wipe out forests releasing huge amounts of C02 and destroy biodiversity, the commitment to this new factory is extremely noteworthy and should receive very positive recognition.
So far, I quite cautiously optimistic.