Unilever and the ‘Sustainability’ agenda

Here are some thoughts for those of you who enjoy evaluating the costs and benefits of environmentally friendly and ethical business practices. The consumer goods giant Unilever have been through the process themselves and the findings have just been made public.

According to a BBC article Unilever have come to the conclusion that they should be putting ‘sustainability’ at the heart of their global operations. The business, which recently reported strong profits plans to double its sales over the next 10 years whilst pledging to halve the environmental impact of its products .

So why does the firm’s chief executive think that this strategy was “the only way to do business long term”?

Several industry stakeholders get nervous when they hear these announcements, and the government and public are sceptical. Is this good business sense or just more ‘greenwash’?

The answer given by the boss is deceptively simple: “retailers and consumers demand it and it saves us money” and “this is about long-term value creation. It’s the only way to do business long term”. In other words, the proposals are likely to increase short run costs, but yield long term gains.

Some corners of the environmental movement are becoming less hostile to business and are beginning to see it as part of the solution. One environmental campaigner, Jonathan Porritt, 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.

Other firms have followed this trend of course and there’s plenty to read on the subject:
Can Tesco save the world? Or another example of ‘Greenwash’?
Cash strapped shoppers move away from ‘ethical shopping’
Recession puts pressure on business ethics

In 2008 there was a thought provoking and detailed report on corporate social responsibility (or CSR) that was published in The Economist.