by Fatima Crerar, Director of Projects, PUBLIC Inc.
Two billion people use Unilever products every day. Many would recognize the brands belonging to the 120-year-old company, like Dove, Popsicle or Vim, but few know the name Unilever and most have no idea of its incredibly bold -- some would even say radical -- approach to business.
In 2009, in the throes of the financial crisis, Paul Polman became Global CEO of the consumer goods company. Since then he has established his vision and led the charge unflinchingly: to double the size of the business by 2020, while cutting its environmental impact and creating social value in communities around the world.
Polman sees a simple truth in a modern world. He talks frequently about how global resource consumption -- energy, water, crops and more -- directly impacts the health of communities and the environment. He also sees how rising standards of living can lead to "mindful consumption" as he has called it, and how, together, these features of global living and development can create opportunity for Unilever. Quite simply, he believes good social and environmental conditions will drive his business.
This idea is as practical as it is daring. To deliver on his vision, in 2010, the company launched the Unilever Sustainable Living Plan, setting out clear goals that by design, will also help drive the company's growth.
Today Unilever has annual sales of €49 billion and is viewed as one of the five best stocks of 2015. It oversees 400 different consumer brands in 190 countries across the globe and is one of world's most desired places to work.
Unconventional measures of success
Clearly Unilever is enjoying success by all traditional measures. But it's the more unconventional measures that make this story so remarkable.
For example, Unilever is leveraging their Lifebuoy soap brand to teach hand-washing to one billion people in developing countries. This effort will dramatically reduce the number of children contracting diarrhea -- a condition that takes the lives of an estimated 2,200 children around the world every single day. The health of families and households in these markets contributes to Unilever's growth targets.
Unilever is also transforming the market for sustainable palm oil, a common ingredient in goods like margarine, shampoo and ice cream. The palm oil industry today is tied directly to harmful environmental degradation, social conflict and poor working conditions and is therefore, unsurprisingly, the focus of many environmental organizations. Today (and three years ahead of plan) Unilever sources all of its palm oil sustainably, helping to spur local economies, protect critical habitats and contribute to the prevention of the effects of climate change. Unilever has also discovered that the yield from sustainable palm oil is up to three times greater than traditionally sourced palm oil, meaning better sourcing at less cost.
These are just two examples of profit and purpose working in tandem for the corporation.
"The world's biggest NGO"
So how is one of the largest consumer packaged goods companies in the world able to sustain steady growth and also deliver such major environmental and social change?
The Unilever Sustainable Living Plan reads like the strategy of an ambitious and driven social change organization.
"We're the world's biggest NGO," Paul Polman, the chief executive of Unilever sometimes likes to joke. "We're a non government organization. The only difference is, we're making money so we are sustainable."
The Plan establishes the idea that "in a volatile and uncertain world" growth should be decoupled from social and environmental effects.
And Polman is committed. So much so that he has asked Unilever shareholders to be patient. Accountability is an important part of Unilever's culture and soon after the launch of the Unilever Sustainable Living Plan, he famously identified that quarterly financial reporting does not accommodate the level of leadership, research and development, and stakeholder collaboration required by his hypothesis. It will take longer-term evaluation to see how addressing labor conditions, community livelihoods, resource consumption and climate change will help drive growth for Unilever.
But the global leadership cannot act alone either. Every single brand is moving towards plans that include, in Polman's words, "social missions, product missions and economic missions." The same goes for each country's individual operations.
Renewable energy, zero waste
In Canada, the Unilever team is galvanized behind the Plan. John Coyne, Vice President External Affairs at Unilever Canada says, "This is a smart and important plan. I would challenge others to steal from it, but if they do, they had better keep up."
As a result of this kind of conviction, the Canadian operations are entirely powered by renewable electricity, the manufacturing facilities generate zero waste to landfill, and all hazardous waste is recovered and responsibly managed.
John Coyne's personal ambition runs deep. He serves in a number of leadership roles to increase recycling across Canada, including a forward-looking corporation that is working to ensure recycling across the country is harmonized, easy and convenient for all Canadians. The vision is to maximize the recovery of post-consumer waste and divert it from landfill. "In today's world, a business has to acknowledge its social and environmental footprint and not simply be accountable for that, but create a whole new idea of what's possible," he says, "Consumers have made that very clear to us."
That's a vital observation that is leading the next phase of Unilever's work. Their research uncovered that more than two-thirds of the environmental impact they are responsible for (68 percent to be exact) comes from the consumer's use of their products. From the freezers that keep our ice cream cold to the energy and water in the teakettle, our behavior is a critical consideration in achieving Unilever's sustainability goals.
Consumer engagement needed
For a company whose goals include cutting their environmental footprint in half, it will take really effective consumer engagement to bring about such significant behavior change. Polman believes that, in part, consumers will increasingly choose products not just because of what the brands offer them, but what the company behind them stands for. At times consumer behaviors will reflect Unilever's sustainable values, but in other cases consumers will need to be led.
While not an easy undertaking, the Unilever Sustainable Living Plan is the kind of strategy than can change things. Here is a giant company driven to make and sell products it wants each one of us to choose and use, and one of the ways it is appealing to us is by protecting the environment and creating value for communities globally.
Some will say that not all of Unilever's targets can be met. Still others venture that anything short of 100 percent success will fuel skepticism that a truly sustainable business is possible. But as the saying goes, "the journey is the reward," and in this case, five years into the plan, Unilever has already shown the world that you can achieve amazing impact when you lead with a clear sense of purpose.
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