Unilever’s Sustainable Living Plan, launched in November 2010, has achieved some early wins, but the real story lies in the long-term strategy. Only by working with others does it stand any chance of success
Seven pillars. Fifty core commitments. Horizons of two to 10 years. Unilever’s Sustainable Living Plan all made for impressive reading, rather like an election manifesto.
Politicians usually get a 100-day grace period before the critics plunge in. Anglo-Dutch consumer goods giant Unilever has had six months, which is generous by comparison, but in sustainability terms, that’s still early days.
Its targets are far from being a doddle (see box). Some, as green guru and sometime adviser to Unilever John Elkington puts it, are “almost insanely ambitious”. The goal of making its entire agricultural sourcing 100% sustainable by 2020 fits that bill. (The current figure stands at about 10%).
It remains legitimate to ask how the company is getting on. So what does its early report card look like?
Talk to Unilever and it will point to a number of early wins. Karen Hamilton, global vice-president for sustainability at the company, rolls off three.
The first is PureIt, Unilever’s water purifier. Targeted particularly at low-income consumers, the product has provided access to safe drinking water for 20 million people.
Another is renewable energy. Every single Unilever factory in the Netherlands now runs 100% on power from renewable sources. The company is also on course to become Canada’s largest commercial buyer of renewable electricity after signing a deal with green power generator Bullfrog in April.
The third is Magnum. Unilever’s leading ice cream brand has linked with the Rainforest Alliance to source all its cocoa as sustainably certified.
Should the list be longer? Perhaps. But to Unilever’s credit, it has already harvested much of the low-hanging fruit. Over the past 15 years, for example, it has cut its greenhouse gas emissions and water use by 40% and 65% respectively.
Obvious wins are therefore, well, not so obvious. Take PureIt. The purifier was first launched in India back in 2004. What’s new is that Unilever has expanded the product’s market reach, first to Bangladesh and Indonesia and soon to Brazil.
Market expansion could help with some targets. Lifebuoy is one such example. This popular Unilever soap is credited with helping improve the health of 130 million people (thanks principally to its impact on bacterial disease reduction). The product is now available in 50 countries, up from 25 a few years ago.
Scaling up has a negative flipside, however. The bigger the business, the larger its environmental impacts. Unilever has set itself the target of doubling growth, while halving its social and environmental footprint. Only new ideas and new approaches will ensure the opposite doesn’t happen.
In short, Unilever needs to innovate. Innovation requires many factors to be in place – not least creativity, incentives and investment.
Without doubt, nothing will happen without a nod from the top. In chief executive Paul Polman, Unilever has a genuine sustainability champion. At the November 2010 launch, he made a splash with his talk of “decoupling” growth from environmental impact and by telling sceptical investors to put their money elsewhere.
Six months on, he’s still sending the same signals. He has since attacked European agricultural subsidies for keeping African farmers in poverty and criticised biofuel policies as “ill conceived”.
The message is getting through to his 174,000 or so employees. Unilever’s recent Global People’s Survey showed a “significant shift” in those who claim to be “inspired” by the company’s vision and values, according to Hamilton.
Polman’s comments have also served to boost the public profile and reputation of Unilever (the company recently pipped GE and Interface in a survey on sustainable leadership by GlobeScan and SustainAbility). Both factors further incentivise employees, Elkington says.
“It’s encouraging for people in a company to feel that they are part of a winning team – and, also, that the world is watching,” he says.
The encouragement is beginning to manifest itself in more sustainable product offerings. A prime example is the laundry detergent Persil Small and Mighty. The product’s volume and required temperature have already been reduced, and now Unilever’s marketing insists that the product can be used in a “quick wash” cycle with no drop in performance.
Unilever employees can be found in more than 100 countries. To ensure that all are on board with the plan’s objectives, the company has sent out a best practice toolkit for all its operations. The manual includes everything from case studies and getting-started tips to advice on brand messaging and waste reduction techniques.
“We’re expecting all our 100 companies this year to develop action plans of areas where they will intervene,” Hamilton explains.
Closer to home, Unilever has introduced quarterly scorecards for its core marketing, R&D and procurement teams. The three-monthly reports keep track of performance against the plan’s targets. The results are reviewed by the steering team responsible for the plan’s implementation and reported to board level.
Unilever has other processes in place to ensure ongoing momentum. A “discovery” team in its R&D unit dedicated exclusively to sustainability solutions is one. Obligatory sustainability criteria for all new projects and an employee network of sustainability champions are others.
Unilever does not have all the answers. The company admits as much. Biodiversity is one difficult area. The plan commits to help “improve biodiversity”, yet the company has yet to devise a way of measuring its own impacts.
The same goes for water. Unilever has mapped water use related to its factories, products and consumers, but it still has no means of assessing the volumes that go into growing the crops that it buys.
To achieve its targets in such areas will require outside advice and expertise. Unilever accepts this fact and has shown an impressive willingness to get help where it can.
So, on biodiversity, it’s working closely with conservation charity WWF to develop assessment methodologies. Likewise, on water, it has reached out to the non-profit group Water Footprint Network for assistance.
“The groundbreaking scale of Unilever’s commitments means it has big challenges ahead – challenges that it will have to work with others outside the company to achieve,” says Mike Tuffrey, director at consultancy firm Corporate Citizenship and a long-term adviser to Unilever.
The company has already pioneered it fair share of partnerships. Yet the scope and ambition of its sustainability targets are pushing it into new areas and new approaches.
Jonathon Porritt, founder of environmental charity Forum for the Future and a member of Unilever’s Sustainable Living Plan’s steering team, points to the issue of non-home food waste.
Unilever has just published an extensive study on waste in the commercial food sector, including restaurants. The World Menu report serves as a “baseline” from which to engage with the sector, Porritt says.
“It’s intriguing to see what [the plan] means in terms of reaching out to different organisations, forming different partnerships and bringing people together in a completely different way,” he adds.
Unilever is stepping up its work with its industry peers, for example. As co-lead of the sustainability working team of the business-led Consumer Goods Forum, the company is advocating industry-wide standards for products linked to deforestation.
Convincing the consumer
It’s all about gathering purchasing power, Porritt explains. He says: “If you’ve got the top 15 big buyers of these commodity products – whether it’s palm oil or soya or paper and board – then you’ve got scale and with that scale you can exert influence.”
Unilever is now extending its experience in voluntary initiatives, such as the Forest Stewardship Council and Marine Stewardship Council, to the sugar and dairy sectors. Porritt expects “a lot more” to follow.
Consumer-linked targets undoubtedly remain Unilever’s biggest challenge. Unlike producers and suppliers, the company’s ability to influence consumer behaviour is limited.
Advertising, in-store campaigns and on-pack information can effect some degree of change. Much more effective, however, is one-on-one contact.
Lifebuoy’s handwashing programme provides an apt example. Its success is a result primarily of community demonstrations, local training and other direct interventions. These, Hamilton says, do not come cheap. And when it comes to hygiene, Unilever has set itself the target of reaching one billion people.
Some behavioural traits are so entrenched that nothing short of government intervention will suffice to shift consumers. While Unilever’s first instinct is to find market-based solutions, it is growing bolder in lobbying government for change.
Showering is the classic example Unilever likes to cite. Around three-fifths (61%) of Unilever greenhouse gas emissions come from the company’s skin and hair products, of which a significant proportion is related to heated water for showers.
“We can’t reduce the [shower] temperature or time people spend in the shower by ourselves. It needs to be coupled with the way governments operate,” Hamilton says.
Among the policy measures that Unilever would like to see are water metering and improving the insulation of water heaters.
Pick up speed
Unilever has a long way to go. It claims to be “on a journey”. That is true. But that journey is not new. Though its plan may be new, Unilever has been in the sustainability management game for more than a decade.
Progress has been steady over that period. Indeed, Unilever’s record outstrips most. But it will need to speed up drastically if it is to hit its new targets. The plan has succeeded in releasing a fresh sense of urgency and purpose. All the same, the key delivery dates – 2012, 2015, 2020 – will come round fast.
Only by teaming up with others does Unilever stand a chance. And therein lies the true mark of success. The plan’s targets are, in a sense, a mere academic abstraction. The real win is creating a sustainable business movement that is more buoyant, more ambitious and more mainstream.
And a challenge for Unilever will be to get individual brands to feel ownership of the Sustainable Living Plan and to communicate directly with consumer audiences on what, for now, remains rather a corporate level initiative. If brands do not live and breathe the laudable corporate goal, its impact will surely be open to question. Other areas, such as impact on human rights and the impact of ecotoxicity should perhaps receive more attention.
Of course, coming back to John Elkington’s initial point, Unilever have given themselves a lot to do.
Hamilton herself is under no illusions. She says: “If we achieve these targets but haven’t been part of a bigger change, then we will have failed.”
Like a good politician, Unilever has laid out its case. It is also leading from the front. But it will require some serious cajoling and diplomacy to persuade others to join it. If Unilever succeeds, it will be in coalition, not alone.
- help more than 1 billion people improve their health and well-being
- halve the environmental impact of its products
- source 100% of its agricultural raw materials sustainably.
There are two big challenges here. (1) the 20% of agricultural raw materials over which Unilever exerts little purchasing power, and (2) non-agricultural (mainly chemical) raw materials. Getting other big buyers on board will be crucial.corporate responsibility CSR supply chain sustainability Sustainable Living Plan Unilever