Unilever outlines green plans

17 November 2010

LONDON: Unilever, the FMCG giant, has established a range of sustainability goals which it believes will drive long-term growth and strengthen brand equity.

The company hopes to halve the footprint of its goods, ensure 1bn people enhance their health and wellbeing and source all agricultural raw materials sustainably.

"We're calling for a business model that decouples growth from environmental impact, and that frankly isn't out there yet," Paul Polman, Unilever's ceo, told CNBC.

The owner of Knorr and Lipton has outlined 50 specific targets, like slashing greenhouse gas emissions, water and waste internally, and among suppliers and customers.

Indeed, this latter group contributes two-thirds of Unilever's aggregated emissions and half of its water use.

"People tell us they want to reduce their environmental impact but find it hard to change their behaviour and don't know how they can make a difference," said Polman.

"The beauty of this plan is it covers all of our products, it covers all of our 178 countries where we operate, and on top of that it takes responsibility of the total lifecycle."

Polman suggested population growth in the next three or four decades, resource constraints and advancing conditions in emerging economies had a role to play in encouraging this shift.

"What we're talking about here is doubling our business while reducing our environmental impact," he said.

"Our aim is to help people in developing countries improve their quality of life without a big increase in their environmental impacts, and to help those in developed markets maintain a good standard of living while reducing theirs."

Another motivating factor is forging successful strategies looking beyond the pressures of the recession.

Polman said: "If we don't develop a sustainable model, I don't think a business like ours has a long-term future ... This is a unique opportunity to step up to the plate and change the reputation of business."

He added: "If we want to grow … we need to do that in a responsible way. What we're launching here is a very new model of sustainable growth that covers our entire business."

This approach diminishes Unilever's reliance on scarce resources, and reflects the evolving requirements of shoppers who are starting to "vote with their wallets on responsible products".

"Consumers want more," Polman continued. "They see food shortages, malnutrition and climate change, and governments are not addressing those problems.

"Companies that do this will get a competitive advantage. Those that do not will put themselves at risk."

Unilever is already enjoying benefits from its related activity, which has included forming the Marine Stewardship Council and Roundtable of Sustainable Palm Oil.

"There is a compelling case for sustainable growth - retailers and consumers demand it and it saves us money.

"It creates preference for our brands, builds business with our retail customers, drives our innovation, grows our markets and, in many cases, generates cost savings."

The Anglo-Dutch firm has now partnered with organisations like Oxfam and the Rainforest Alliance to link 500,000 smallholder farmers and small-scale distributors with its supply chain.

"I would actually welcome anybody to join us," Polman said. "We don't see this as enlightened self-interest; we see this as the right way to run a business model, even more so today than ever."

Data sourced from Unilever, CNBC, The Guardian, BBC; additional content by Warc staff