Warc Blog

Unilever pursues new approach

25 April 2012
LONDON: Unilever, the FMCG giant, is furthering efforts to create a sustainable business model, a move the company believes will leave it "more in sync with consumers" around the world.

The owner of Dove, Cif and Ben & Jerry's has established a wide range of sustainability goals to hit by the end of the decade, aiming to halve its environmental impact while doubling sales.

"I don't think our fiduciary duty is to put shareholders first. I say the opposite," Paul Polman, Unilever's chief executive, told the Guardian.

"If we focus our company on improving the lives of the world's citizens and come up with genuine sustainable solutions, we are more in sync with consumers and society and ultimately this will result in good shareholder returns."

Unilever expects to attain the goal of buying all of its palm oil from ethical sources by the close of 2012, three years before the original deadline.

Moreover, the firm has nearly doubled the amount of raw materials it procures from sustainable sources in only 12 months. However, Polman admits larger obstacles remain.

"For those targets that have been met or exceeded, I point out that this is year one of a ten year plan so the low-hanging fruits are a little easier and it will be progressively more difficult to achieve these targets," he said.

"The issues we face are so big and the targets are so challenging that we cannot do it alone so there is a certain humility and a recognition that we need to invite other people in."

Among the other major firms fostering change, Polman suggested, are Heineken, the brewer, Patagonia, the clothing manufacturer, and Nike, the sportswear group. This has become especially vital as political instability grows.

"Governments are coming out of office almost on a weekly basis so the onus is on companies to lead the way," he said. "Business is now in the driving seat on many of the initiatives such as the moratorium on illegal deforestation."

At the financial level, Unilever has also stopped issuing quarterly reports and worked to attract long-term investment funds at the expense of hedge funds, which often focus on the short term, and now hold 5% of stock, versus 15% three years ago.

"Historically, too many CEOs have just responded to shareholders instead of actively seeking out the right shareholders," Polman said. "Most CEOs go to visit their existing shareholders; we go to visit the ones we don't yet have."

Data sourced from the Guardian; additional content by Warc staff

 
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