Unilever unveiled its 2020 sustainability plan yesterday, and no one can accuse the company of playing small ball.
The global consumer products giant ($57 billion in revenues in 2009) intends to improve the health of 1 billion people, to buy 100 percent of its agricultural raw materials from sustainable sources, and to reduce the environmental impact of everything it sells by one-half, while doubling its revenues.
Those are big hairy audacious goals (to borrow a phrase from Jim Collins), befitting a company that touches two billion consumers a day. Unilever's brands include Lipton, Dove, All, Hellman's and Ben & Jerry's.
The biggest idea here -- and the one that will probably prove hardest to achieve -- is that a company can grow its sales without growing its environmental footprint. As Dave Lewis, president of Unilever Americas, put it: "We cannot choose between growth and sustainability. We have to do both."
This is what U.S. consumer-products giant Procter & Gamble implicitly said it could not do when it announced its sustainability goals back in September. Unilever is also hedging its bets some -- it is promising a 50 percent reduction "per consumer use" -- and it acknowledges that it can only grow sustainably by changing consumer behavior. That's no small matter and one that is largely beyond its control.
Still, Unilever's Sustainable Living Plan, as it's called, breaks new ground for a number of reasons.
It is comprehensive, setting more than 50 social, economic and environmental targets.
It is rigorous; the company says its has measured the carbon, water and waste footprints of 1,600 products, representing 70 percent of its volume.
It's far-reaching, taking into account the full life cyle impact of its product, from "seed to disposal," as one executive put it.
It builds on an impressive past history when it comes to sustainability.
And it goes well beyond green, including efforts to improve nutrition --
By 2020 we will double the proportion of our portfolio that meets the highest nutritional standards, based on globally recognized dietary guidelines.
and global health --
By 2020, we will help more than a billion people to improve their hygiene habits and we will bring safe drinking water to 500 million people.
and poverty --
Our goal is to link 500,000 smallholder farmers into our supply network. We will help to improve their agricultural practices and thus enable them to supply into global markets at competitive prices. By doing so we will improve the quality of their livelihoods.
The Unilever plan was announced with fanfare in London, New York, Rotterdam and New Delhi by CEO Paul Polman, other top company execs and outsiders who had been been briefed on the effort. (In New York, they included Columbia's Jeffrey Sachs and author Dan Esty.) Early reaction has been favorable. Writing in The Guardian, Jonathan Porritt, the founder and director of a British corporate responsibility organization called Forum for the Future, said:
Is this a game-changer for Unilever? Absolutely. Is it the best Plan out there for big global companies? I believe it is.
I spoke with Dave Lewis, who runs Unilever's U.S. operations, after the New York announcement. He told me he was feeling just fine even though, at the news event, he drank brownish water that was pulled out of the Hudson River and treated with a Unilever water-purification product called Pureit. Pureit has been in development for more than a decade and is now being sold in India, he told me, and the company now wants to get the product into the hands of half a billion customers. "It's a bit of a leapfrog innovation," Lewis said. In the case of Pureit, the alignment between the company's environmental and business goals is near-perfect–the more water purification it sells, the more the health and well-being of its consumers improves.
In other businesses, though, there are unavoidable tensions between Unilever's business and environmental aims. Consider the problem of the hot shower. Yes, it's a problem for a company that wants to sell lots of soap and shampoo and still lower its footprint. No matter how much Unilever shrinks packaging or improves the efficiency of its factories, the big impact of its soaps and shampoos come when people use them in hot showers, which consume lots of water and energy. Unilever says:
We estimate that 95 percent of the greenhouse gas emissions associated with soaps, shower gels and shampoos occur when the products are used -- and in particular, when the consumer takes a shower.
So to reduce the impact of those products, the company will need help for its customers. To save water and energy, Unilever says: "We aim to reach and persuade 400 million consumers to change their shower habits by 2020″ and "if we can persuade 20 million people to cut a minute from their shower time, it would save emissions of 1 million metric tonnes of CO2 a year -- equivalent to taking 110,000 cars off the road." The company plans to launch a campaign called "Turn off the tap" in the U.S. next year to which I say ... well, good luck with that.
The company also can't say how it will reach some of its goals, Lewis told me, but that doesn't trouble him. He's counting on motivated employees to help, citing as an example a factory worker in Britain who, on his own, devised a way for the company to reduce the paper use in its teabags. "The engagement of our employees has shot up as we have worked our way through this plan," he said.
Unilever's track record on sustainability also gives the company confidence that it can meet its goals. Particularly around supply chain issues, Unilever has been a leader -- helping to form the Marine Stewardship Council to certify fisheries back in the late 1990s, making early commitments around sustainable palm oil, promising several years ago to source all of its Lipton tea bags from farms certified by the Rainforest Alliance. It sold concentrated detergent packages before anyone else (except Method). It's pioneered efforts to sell products to people at the base of the economic pyramid.
This is why other global consumer products companies are, at least for now, following Unilever.
Image CC licensed by Flickr user havankevin.