“Unilever will demonstrate that sustainable business is the pathway to superior financial performance.”
—Alan Jope, CEO, Unilever
NAVIGATING A DECISIVE DECADE
It took a pandemic for the world to fully embrace the importance of hand washing.
That simple act—soap on hands, with water when available—has been saving lives since long before COVID-19 arrived in our communities.
Unilever has stressed the importance of hand washing for more than a century, ever since the Lever brothers created Lifebuoy soap in 1894. In the years since, the company has created products and advocated for access to this live-saving formula while building on what CEO Alan Jope calls the company’s commitment to responsible business.
Under former CEO Paul Polman in 2010, the British multinational launched an ambitious decade-long strategy, The Unilever Sustainable Living Plan, to advance sustainability initiatives in and beyond the company. The strategy did not meet every target, but in the process Unilever achieved 100% renewable energy use in its operations, reduced carbon emissions in its manufacturing by half and reduced total waste per consumer use of its products by nearly one-third. And, in the spirit of its hand-washing campaigns of years past, it has helped 1.3 billion people around the world improve their health and hygiene.
We believe that the winning businesses of tomorrow will be those that anticipate and respond to the huge changes shaping people’s lives around the world. The businesses and brands that capitalize on the infotech and biotech revolutions, adapt to changing demographics and shifting consumer needs and contribute to tackling the twin challenges of climate change and social inequality will have the greatest success.
—Alan Jope, CEO, Unilever
Today, Unilever makes and sells more than 400 brands, from detergent to shampoo to pantry snacks, in 190 countries. More than 2.5 billion people use a Unilever product every day. With these customer relationships comes significant responsibility toward sourcing, manufacturing, packaging and logistics across its value chain.
Meanwhile, a convergence of global crises—climate change, nature loss, the ongoing pandemic, rising social inequality—threatens the wellbeing of communities everywhere. “Globalization and capitalism are good for a business like ours,” says current CEO Jope. “But globalization and capitalism at the expense of people and the planet are not.” Put another way: If you are not thinking about and acting on the crises the world faces, your business isn’t planning for the long term.
That’s why Jope introduced the Unilever Compass, calling for renewed action to confront inequality and stem biodiversity collapse and climate change.
Alan Jope, CEO, Unilever
“For every minute spent defining, spend ten executing. The Unilever Compass is just that. It sets our direction—but we still have to complete the adventure.”
“It is not me or our executive team or any one individual who will deliver the Compass; it will take the whole Unilever team. We will deliver it together and win together. Nothing beats winning together.”
“Is your business profitably solving the problems of people and the planet, or is it profiting from creating problems for the future?”
A MULTI-STAKEHOLDER MODEL
Unilever’s 21st-century purpose (“to make sustainable living commonplace”) is guided by a conviction that sustainability and business are indivisible. The new Compass integrates business and sustainability objectives into one unified strategy, uplifting more than a dozen multi-year priorities across the value chain and positioning the company to achieve top one-third financial performance in its industry.
Unilever’s holistic approach to business strategy engages and serves all stakeholders—employees, consumers, society, shareholders, suppliers and the planet—to drive action toward its climate, nature and waste reduction goals.
We believe deeply that a multi-stakeholder model aligns interests, mitigates risk and drives sustainable value creation. The not-so-secret truth: businesses that are slow to adopt a multi-stakeholder approach risk losing consumers and losing investors.
— Alan Jope
The Compass builds upon Unilever’s commitment to human rights and implementation of the UN Guiding Principles on Business and Human Rights. Key to the success of Unilever’s multi-stakeholder approach is its leadership’s commitment to actively listen to stakeholders, especially to voices within the company, where gender balance and diversity are seen as critical levers for driving innovation and long-term business performance. The board and manager level are gender balanced and diverse, though women currently occupy only 30% of positions at the executive management level. The company is committed to achieving gender balance and equitable representation in leadership.
Net-zero emissions from all products—from sourcing to point of sale—by 2039
100% of ingredients will be biodegradable by 2030
€2 billion annual spend with diverse businesses worldwide by 2025
SUSTAINABLE VALUE CREATION
Mainstreaming sustainable business requires efforts across the value chain. One focus is to become net zero by 2039. Another is committing to a deforestation-free supply chain in paper, palm oil, soy and cocoa by 2023. Unilever is working to achieve 100% biodegradable ingredients by 2030 and aiming to keep plastic outside of the environment through a range of commitments on plastic waste, including an absolute reduction in plastic use, increasing the use of recycled plastic and ensuring all plastic can be recycled, reused, or is compostable—while also collecting and processing more plastic than the company sells.
With an eye toward shaping a sustainable and inclusive global economy, Unilever is stepping up its public advocacy with governments, industry peers and partners. When CEOs and business leaders advocate as economic actors in a coordinated fashion, these signals can de-risk decisions by politicians, policymakers and regulators. And when policy change takes shape across markets and regions, broader economic and social transformation is possible.
All 149,000+ Unilever employees are paid a living wage or higher, and the company is committed, by 2030, to paying a living wage or income to all who contribute direct goods and services. Getting there means first shifting views across some industries and countries; to tackle this, Unilever is vigorously advocating for a living wage or income in key markets.
On another front, two years ago Unilever committed to halve the use of virgin plastic in its packaging by 2025—despite the fact it’s still cheaper to buy virgin plastic made from oil than to buy and use recycled plastic. Together with partners, Unilever is advocating to correct perverse economic incentives such as this.
Consumers increasingly demand sustainable goods and transparent business practices—and all successful businesses respond to the operating environment they are in. The social, environmental and economic imperatives of sustainability are no different; business leaders must respond.
The Compass is about seamless integration of our business plan and sustainability. It’s changing the way our business operates to improve the health of the planet; people’s health, confidence and wellbeing; and contributing to a more socially inclusive world.
—Rebecca Marmot, Chief Sustainability Officer, Unilever
Alan Jope on purpose and the role of business