Investors inveigh against purpose | WARC | The Feed

Investors inveigh against purpose

Activist investors are taking aim at the focus on purpose of some fast moving consumer goods (FMCG) companies, with Unilever, in particular, in the firing line.

What’s happening

Last year Unilever CEO Alan Jope suggested that the purpose of its Hellmann’s mayonnaise brand is to fight against food waste. “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot,” responded one activist investor earlier this week. 

Why it matters

Jope’s point was that food waste contributes significantly towards greenhouse gas emissions, so anything that can help reduce those has to be a good thing. Corporate attitudes towards sustainability have been shifting as thinking around environmental, social and governance (ESG) evolves and as research indicates consumers have a positive attitude towards brands that take such issues seriously. Indeed, there is arguably a strong marketing case for using sustainability in branding.

But as the pandemic drags on and inflation grows, it’s quite possible that sustainability could slip down the agenda as economic recovery is a priority for brands and affordability is key for many consumers. A push from activist investors to put the spotlight on profits and growth could signal a reappraisal of marketing strategies.

Final thought

“From its early origins, a social purpose has been anchored in Unilever’s DNA. More than an undue obsession with ESG, Unilever has, like Danone, mostly suffered from unfortunate product categories and geographical exposure” – Sébastien Thevoux-Chabuel, ESG analyst and portfolio manager at Comgest.

Sourced from Financial Times, WARC [Image Unilever.co.uk]