Unilever says sustainability key to new business model

By Richard Anderson
Business reporter, BBC News

Image caption,
Unilever is one of the world's biggest buyers of tea

Consumer products giant Unilever has unveiled a "new business model" putting sustainability at the heart of its global operations.

It pledged to halve the environmental impact of its products while doubling sales over the next 10 years.

Chief executive Paul Polman said the new model was "the only way to do business long term".

The company said it would produce an annual report on its progress towards achieving these goals.

'Consumer demands'

Unilever, which makes a number of the UK's most popular brands, such as Persil, Dove, Flora, PG Tips and Ben & Jerry's, made three overarching commitments to achieve by 2020:

  • cut by 50% the environmental impact of its products in terms of water, waste and greenhouse gases
  • source 100% of its agricultural supplies from sustainable sources
  • improve the health and well-being of one billion people across the world.

It outlined a number of ways in which it would deliver on these commitments, including doubling its use of renewable energy to 40% of total energy use; reducing its water consumption by 65% on 1995 levels; reducing waste sent for disposal by 70% on 1995 levels and reducing levels of salt, fat and sugar in its food products.

The company admitted it would not be easy to achieve these goals, but said they could be hit with the help of non-governmental organisations (NGOs), governments and suppliers.

'Value creation'

Speaking at the launch of the company's Sustainable Living Plan at Unilever's headquarters in London, Mr Polman said there was "no conflict between sustainable consumption and business growth.

"Quite the opposite, in fact. There is a compelling case for sustainable growth - retailers and consumers demand it and it saves us money."

Asked how the company would sell this new model to potentially sceptical City investors only interested in the bottom line, Mr Polman said: "I'm not interested whether [the plan] brings competitive advantage. This is about long-term value creation. It's the only way to do business long term".

Jonathon Porritt, environmental campaigner and an adviser to Unilever, said that businesses needed to make money out of becoming more environmentally responsible.

"There is no way of arriving at a sustainable world that does not involve businesses making money," he said.

Rising profits

A number of leading multinational companies have made commitments to reduce their environmental impact.

For example, the world's biggest retailer Wal-Mart has introduced sustainability criteria as part of its official product-sourcing process.

However, few major companies have made such concrete commitments on environmental policy as Unilever, or been so vocal in championing the importance of sustainability to long-term growth.

There are concerns that some companies merely make grandiose statements about environmental policy in order to attract customers.

Mr Polman said he was aware of the need to "walk the walk, not just talk the talk", which is why the company would be reporting regularly on its progress towards achieving its 2020 commitments.

Unilever is the second-biggest producer of consumer goods in the world, with around two billion customers using its products everyday, it claims.

Earlier this month, the company reported profits of 1.35bn euros (£1.18bn, $1.9bn) for the three months to the end of September.

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