Case study: Unilever

As one of the world’s largest FMCG companies, the social and environmental impact of Unilever’s business activities will always be huge relative to most other organisations. However, by 2020 it aims to halve the environmental footprint of its products, improve the welfare of 1 billion people and source all its agricultural products sustainably, while doubling its revenues.

Click here the read the cover feature: CSR – This time it’s profitable
Click here to read about what Marks & Spencer is doing about CSR

There are two strands to this growth strategy, according to Unilever vice-president of sustainability Karen Hamilton: “We will sell more volume of product because a lot of our growth is going to be in developing and emerging markets. We will also develop products that are higher value.”

The environmental impact takes into account emissions, waste production and water use, but the majority of the impact comes from how products are used by consumers. As a result, marketing and design will play an important role in helping to change people’s behaviour.

Farm
Green shoots: Unilever aims to make its sourcing of raw materials more sustainable

Hamilton says: “We have done a very in-depth analysis that allows us to see that our direct manufacturing impacts are less than 5%. When it comes to greenhouse gases, for example, almost 70% of the lifecycle impacts are tied up in the way consumers use our products, so we are going to need to innovate.”

Though there are opportunities for cost reduction, there is also a need for investment. This is certainly the case when it comes to Unilever’s sourcing of agricultural products. “You need an initial outlay for setting up some of these schemes, such as for sustainable sourcing of palm oil,” says Hamilton.

Shareholders’ attitudes towards the way Unilever has communicated its new approach to CSR will need to be gauged as results emerge. The share price has been volatile in recent months, with movements both up and down in the days following the unveiling of the Sustainable Living plan.

Hamilton says that both the finance department of the company itself and its shareholders recognise that this is not a “nice-to-do”, but is necessary for protecting Unilever’s future profitability in an uncertain world economy.

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