Unilever has heavily marketed the issue of sustainability in the face of climate change as an important value that is critical to its business model. Though its results have proven fruitful in some areas, there are downsides to a mostly self-regulated model of sustainability.
Unilever is the third largest global consumer packaged goods company, best known as the maker of Ben & Jerry’s ice cream, Hellmann’s mayonnaise, and Dove soap, among other products . The conglomerate is heavily influenced by climate change due to its reliance on commodities like dairy, palm oil, and soybeans, and due to the corporate social responsibility push it has very publicly marketed to maintain positive public relations and boost sales. The scientific community is in consensus that commodities highly concentrated in few suppliers and in few geographies that are predicted to be most negatively affected by climate change can have devastating supply chain effects. This was evidenced by the US droughts in 2012 when global food prices increased by 10% between June and July 2012 . As it concerns corporate social responsibility, Nielsen has found that millennials within the age range of 18-34 years old are “four times more responsive to a company with sustainability credentials than older consumers.” While this is an important consideration from an end-consumer’s perspective, it is also of the utmost importance for talent acquisition as Unilever engages in the war for young talent .
The organization has been very public, chiefly through its CEO, Paul Polman, about its efforts to halve its environmental impact from the year 2010 by the year 2030 (revised from 2020). In many regards, the organization is well on its way to achieving some of its goals in both the products that it produces and the impact that its value-proposition has had on competitors. As an example of the latter, Unilever partnered with the Rainforest Alliance to certify many commodities sourced for some of its biggest brands, including Lipton tea bags. Following this partnership, many competitors, like Twinings and Tata, have changed their practices to secure certification . To accomplish its internal goals, Unilever is focusing on halting deforestation to reduce global greenhouse emissions, on helping consumers use less water, and on championing sustainable agriculture . Oxfam, an international collection of NGOs, has validated much of the work that Unilever is touting by rewarding the organization with the top spot on its “Behind the Brands” scorecard, with its highest score given on its tackling of climate change .
However, Unilever’s self-reported measures of success are not always trustworthy and some of its goals remain lofty at best. The organization is not being aggressive enough in trying to influence consumer behavior, given the fear that it will lead to lower sales, while it is aggressively marketing the sustainability of its brands to increase sales. One of the most ambitious goals set by the organization relates to changing the behavior of its consumers, who account for 70% of its environmental impact . However, the Unilever CSR website states that “greenhouse gas impact per consumer use increased by around 8% since 2010,” mainly due to personal care products used in conjunction with heated water . In terms of remedies, the corporation must enter serious lobbying efforts with governments around the world to encourage the use of renewable energy both for its own supply chain and for the ones that affect its consumers.
Another looming controversy concerns the method by which certifications for certain commodities are being secured by Unilever. The organization is credited with starting the Roundtable for Sustainable Palm Oil (RSPO), which certifies the sustainability of palm oil sources. Through this group, Unilever claims that 100% of its palm oil is sustainably sourced. However, a closer look by Greenpeace in 2013 determined that the criteria for sustainable sourcing was laughable as it mainly concerned not deforesting small, symbolic plots of jungle deemed of “high conservation value” while companies clear the surrounding land for the supposedly “sustainable” palm oil . The organization needs to be less generous in the claims that it makes regarding sustainability and must enforce a policy of seeking approval regarding the validity of its certifications from some of its toughest critics, otherwise the nebulous certifications are meaningless.
While Unilever has made some strides in many areas, it remains relatively insular in its approach to sustainability as it concerns its CPG competitors. As climate change is a global problem with widespread consequences, how should Unilever balance its differentiating edge as the most sustainably-driven with the need to collaborate with its competitors to ensure that the combined sustainability efforts are materially fruitful?
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