Unilever, Southwest Airlines set new standards

16 November 2011

NEW YORK: Unilever and Southwest Airlines are among the major brand owners setting new standards in the areas of sustainability and corporate governance, a report has argued.

The Harvard Business Review, a leading journal, asked a panel of industry experts and academics to identify some of the companies clearly making the most progress in this discipline.

Unilever, the FMCG giant, has set out goals including only utilising sustainable palm oil by 2015, cutting CO2 emissions by 40% in 2020 versus 1995 levels and sourcing material in an ethical fashion through its Sustainable Agriculture Code.

"We have to do business this way to sustain our long-term business goals," said Luigi Sigismondi, Unilever's chief supply chain officer. "Today we're investing. We'll see the return in years to come."

As well as tapping the rising demand for green goods, Unilever plans to educate shoppers, as 65% of its footprint comes from consumers using products. "We have to lead beyond our own four walls," said Sigismondi.

Elsewhere, Southwest Airlines was lauded for its on-going focus on staff satisfaction, engagement and training, which has contributed to the fact it regularly posts the lowest number of complaints across the sector.

Alongside helping the firm remain profitable for 38 years in a row - with employees receiving a share of this income - such an emphasis has reduced the threat of damaging labour disputes and facilitated a stable merger with AirTran.

"We have a common objective to keep the company healthy and prosperous," said Joe Harris, Southwest's senior labor relations counsel. "It's a tremendous challenge, but this philosophy really does still permeate the entire organisation."

DSM, a Dutch firm which has made the transition from selling chemicals to nutritional supplements, constituents for drugs and eco-friendly construction materials, was also applauded by the study.

It has donated considerable quantities of food lines like MixMe, a porridge enriched with nutrients such as iron, to poor countries in a tie-up with the World Food Programme, and launched various education and healthcare initiatives.

"We don't really put a value on it right now, and maybe we should to have the investor community better understand," said Fokko Wientjes, DSM's director. "But shareholders haven't ever called me and said, 'Please stop.'"

PotashCorp, the industrial products manufacturer, was praised for corporate governance measures like empowering shareholders to elect directors by a simple majority and offering a "say on pay" covering its top earners.

"Instead of adhering to the minimum requirements, we could implement best-practice programs that in the long run would be good for the company," said Joe Podwika, its general counsel.

Data sourced from Harvard Business Review; additional content by Warc staff