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In what ways does Unilever's focus on sustainability (see Illustration Capsule 9.4), in the long-term interest of its shareholders? Does it contribute to the company's competitive advantage or profitability. Discuss.

In what ways does Unilever's focus on sustainability (see Illustration Capsule 9.4), in the long-term interest of its shareholders? Does it contribute to the company's competitive advantage or profitability. Discuss.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
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In what ways does Unilever's focus on sustainability (see Illustration Capsule 9.4), in the long-term interest of its shareholders? Does it contribute to the company's competitive advantage or profitability. Discuss.

 

ILLUSTRATION CAPSULE 9.4 Unilever's Focus on Sustainability With over 53.7 billion euros in revenue in 2017, Unilever is one of the world's largest companies. The global con- sumer goods giant has products that are used by over 2 billion people on any given day. It manufactures iconic global brands like Dove, Axe, Hellman's, Heartbrand, Knorr Vegetable ST Ives 30 Quips NOXZEMA Vaseline Dove ULTIMATE CLEA and many others. What it is also known for, however, is its commitment to sustainability, leading GlobeScan's Global Sustainability Survey for sustainable companies with a score 2.5 times higher than its closest competitor. Unilever implemented its sustainability plan in as transparent and explicit way as possible, evidenced by the Unilever Sustainable Living Plan (USLP). The USLP was released in 2010 by CEO Paul Polman, stating that the company's goal was to double the size of the busi- ness while halving its environmental footprint by 2020. Importantly, the USLP has remained a guiding force for the company, which dedicates significant resources and time to pursuing its sustainability goals. The plan is updated each year with targets and goals, as well as an annual progress report. According to Polman, Unilever's focus on sustain- ability isn't just charity, but is really an act of self-interest. The Degree ELLMANN Simple COUNTRY CROCK REAL PONDS Lipton CALCRAM Greentea ©McGraw-Hill Education/David A. Tietz, photographer sustainability report, the company details its progress toward its many sustainability goals. By 2018, Unilever had helped more than 601 million people to improve their health and hygiene habits and had enabled over 716,000 small farmers to improve their agricultural prac- tices and/or their incomes. Unilever has also created new business practices to reach even more ambitious targets. Unilever set up a central corporate team dedicated to spreading best sustainability practices from one factory or business unit to the rest of the company, a major change from the siloed manner in which the company previously oper- ated. Moreover, the company set up a "small actions, big differences" fund to invest in innovative ideas that help the company achieve its sustainability goal. To reduce emissions from the overall footprint of its products and extend its sustainability efforts to its entire supply chain, it has worked with its suppliers to source sustainable agricultural products, improving from 14 percent sus- tainable in 2010 to 56 percent in 2017. company's most recent annual report states "growth and sustainability are not in conflict. In fact, in our expe- rience, sustainability drives growth." Polman insists that this is the modern-day way to maximize profits, and that doing so is simply rational business thinking. To help implement this plan, Unilever has instituted a corporate accountability plan. Each year, Unilever bench- marks its progress against three leading indices: the UN Global Compact, the Global Reporting Initiative's Index, and the UN Millennium Development Goals. In its annual AXE I
Transcribed Image Text:ILLUSTRATION CAPSULE 9.4 Unilever's Focus on Sustainability With over 53.7 billion euros in revenue in 2017, Unilever is one of the world's largest companies. The global con- sumer goods giant has products that are used by over 2 billion people on any given day. It manufactures iconic global brands like Dove, Axe, Hellman's, Heartbrand, Knorr Vegetable ST Ives 30 Quips NOXZEMA Vaseline Dove ULTIMATE CLEA and many others. What it is also known for, however, is its commitment to sustainability, leading GlobeScan's Global Sustainability Survey for sustainable companies with a score 2.5 times higher than its closest competitor. Unilever implemented its sustainability plan in as transparent and explicit way as possible, evidenced by the Unilever Sustainable Living Plan (USLP). The USLP was released in 2010 by CEO Paul Polman, stating that the company's goal was to double the size of the busi- ness while halving its environmental footprint by 2020. Importantly, the USLP has remained a guiding force for the company, which dedicates significant resources and time to pursuing its sustainability goals. The plan is updated each year with targets and goals, as well as an annual progress report. According to Polman, Unilever's focus on sustain- ability isn't just charity, but is really an act of self-interest. The Degree ELLMANN Simple COUNTRY CROCK REAL PONDS Lipton CALCRAM Greentea ©McGraw-Hill Education/David A. Tietz, photographer sustainability report, the company details its progress toward its many sustainability goals. By 2018, Unilever had helped more than 601 million people to improve their health and hygiene habits and had enabled over 716,000 small farmers to improve their agricultural prac- tices and/or their incomes. Unilever has also created new business practices to reach even more ambitious targets. Unilever set up a central corporate team dedicated to spreading best sustainability practices from one factory or business unit to the rest of the company, a major change from the siloed manner in which the company previously oper- ated. Moreover, the company set up a "small actions, big differences" fund to invest in innovative ideas that help the company achieve its sustainability goal. To reduce emissions from the overall footprint of its products and extend its sustainability efforts to its entire supply chain, it has worked with its suppliers to source sustainable agricultural products, improving from 14 percent sus- tainable in 2010 to 56 percent in 2017. company's most recent annual report states "growth and sustainability are not in conflict. In fact, in our expe- rience, sustainability drives growth." Polman insists that this is the modern-day way to maximize profits, and that doing so is simply rational business thinking. To help implement this plan, Unilever has instituted a corporate accountability plan. Each year, Unilever bench- marks its progress against three leading indices: the UN Global Compact, the Global Reporting Initiative's Index, and the UN Millennium Development Goals. In its annual AXE I
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