How Unilever Converges Doing Good and Strong Performance

This article is part of a series on “The ROI of Sustainability,” written with the support of MeterHero. MeterHero helps companies and organizations offset their water and energy footprints through consumer engagement. To follow along with the rest of the series, click here.

An old paradigm of business assumed profits must be sacrificed to help people and the planet. Now, some companies have experienced a paradigm shift, where people, profits, and the planet are inseparable. Unilever is an example, with sustainability shaping its actions and the way it communicates its brand, fostering trust in the marketplace. As a company that reaches 2 billion consumers annually, has 172,000 employees, and 76,000 suppliers, this is a huge undertaking with an enormous global impact.

Efforts to mitigate risk and ensure security in the supply chain are shaping corporate behavior, spurring sustainable innovation. Unilever initiated drip irrigation projects for soybean farmers that save water and reduce the need for pesticides. Its factory eco-efficiency programs save €200 million annually while creating 1,000 jobs. Achieved in 2014, there are now 241 zero-waste factories in 67 countries, resulting in some former waste streams being used for manufacturing building materials or as compost.  Now 55 percent of Unilever's agricultural raw materials are sustainably sourced, with a 100 percent goal by 2020. Paul Polman, Unilever's CEO sees clear value in a triple bottom line approach to business.

"In a volatile world of growing social inequality, rising population, development challenges and climate change, the need for businesses to adapt is clear, as are the benefits and opportunities," he says. "This calls for a transformational approach across the whole value chain if we are to continue to grow."

There are numerous examples of Unilever using its branding and marketing reach to create a positive social or environmental impact, with a tangible benefit on sales. In Argentina, Unilever partnered with Carrefour to educate consumers on ways to save energy when doing laundry, resulting in a boost in market share and a 25 percent increase in sales. The Lifebuoy brand aims to reduce the spread of disease by changing the hand-washing behavior of 1 billion consumers. Dove's self-esteem program works with girls and women to promote a positive body image by changing the conversation around female beauty.

These campaigns are a win-win, both for humanity and sales and the efforts are paying off. Unilever reports that its brands with a social mission, such as Ben & Jerry's, Lifebuoy, and Dove are achieving above average growth.

With such initiatives, you might expect Unilever's CSR department to be working overtime. In fact, the department disbanded several years ago because it was seen as redundant. The company's new approach embeds sustainability in all aspects of the business, making a separate department disjointed and unnecessary.

When taking a step back, Unilever's potential to shape the world is tremendous, and ideally this will be harnessed in a positive way. For example, Dove's campaign produced the most popular viral video ad at that time, now with 65 million views on YouTube alone. Unilever's vast resources and reach can be used to promote human health, boost sustainable farming practices, and mitigate water shortage issues. In many cases the company has chosen a triple bottom line approach, but there are areas where it has fallen short.

Unilever is criticized for opposing GMO labeling and the giant poured money into efforts to defeat a California ballot initiative for GMO food labeling. Oddly, its subsidiary Ben & Jerry's is the poster child for food safety and has been leading the way in creating GMO-free products. Oxfam uncovered unsavory labor practices in a Vietnamese factory, but Unilever since agreed to improve practices. Unilever's greenhouse gas emissions have decreased by a meager 4 percent across the value chain since 2010, but sales increased over the same period indicating that some progress has occurred.

Many of us get skeptical when we hear of a big company doing good and wonder if it is more of a green-washing campaign than a genuine paradigm shift. It does seem Unilever is sincere in seeing the business opportunity in CSR and is successfully benefiting the bottom line by mitigating risk and creating trust. Of course no CSR initiative is impeccable, and a "business as usual" mentality may sneak in at times as the new paradigm takes hold.

Image credit: Mike Mozart, Flickr

Image credit: Ingmar Zahorsky, Flickr