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Unilever: Profile of a Sustainable Brand Leader, Part One
November 19th, 2012
A surging global population, diminishing natural resources and poor land management together threaten both the planet’s and businesses’ long-term viability. In recent years more companies have focused more on environmental, economic and social issues, but compliance, not sustainability, has been the main driver. But a shift in attitudes is occurring: Environmental degradation, reports of human rights abuses and the 2008 global financial crisis shattered consumers’ confidence in companies and their brands. And in an age in which social media influences consumer behavior more than traditional advertising, it is now the customers, not companies and their advertising agencies, who drive the conversation. Within that conversation, customers and stakeholders are demanding companies to become more transparent, socially conscious and environmentally responsible. Sustainability can both rebuild consumer trust in companies and lay the foundation for their long-term financial success in a volatile and resourced-stressed world.
But it is not enough for companies to create a sustainability or corporate social responsibility (CSR) program and treat such initiatives as a separate function from finance, marketing, human resources or legal. The drive towards a more sustainable company requires an integrated strategy in which sustainability is embedded, not compartmentalized in a silo within a company’s organizational structure. A company’s brands can help launch such a new approach because the loyalty, affinity, trust and reputation they engendered among consumers can become a force for environmental stewardship, social good and economic development. Unilever, the multinational $60 billion consumer products company that is home to iconic brands including Dove, Lipton and Ben & Jerry’s, is a leading example of how brands, rather than a CSR department, can lead this new business paradigm and inspire social innovation, encourage more sustainable behaviors and improve the lives of people loyal to those brands.
Unilever’s roots in CSR date back over a century to when the founders of Lever Brothers, the British soap company that eventually merged with another firm to form Unilever in 1930, understood a content workforce contributed to the profitability of a company. The makers of Lifebuoy and Lux soaps focused on employee well-being and security, with one of its most generous programs being the construction of employee housing adjacent to its factory. Employees also benefitted from a fixed work week, enjoyed paid holidays and enrolled in health and safety programs atypical of that era. Decades later, Unilever broke ground with its proactive compliance, environmental reporting, leadership on the establishment of sustainable fisheries, and its continued high ranking on the Dow Jones Sustainability Index since its appearance on the inaugural list in 1999.
By 2006, Unilever’s executive team decided that the company had to focus even more on sustainability for a variety of reasons. Water scarcity became an increasing threat, raw materials including palm oil caused more environmental destruction and two-thirds of the world’s population still lived on less than $2 a day. At the same time the developing world offered huge market opportunities for a multinational such as Unilever — and challenges, too, because the rising costs of fossil fuels and petrochemicals drove up the costs of doing business. Consumers also started showing more interest in the effects their favorite products had on people and the planet. Unlilever was in a unique position to create a positive impact because of its vast supply chain and procurement of raw materials: The company alone purchases 3% of the world’s palm oil, 5% of tomatoes and 12% of tea.
Therefore the company’s leadership realized that branding had to be more than about building customer loyalty and trust. Brands could become, in fact, an aspirational force for social good and address some of the world’s most pressing economic, social and environmental problems. It was untenable for Unilever to operate CSR initiatives separately from the company’s marketing and brand management.
To that end, Santiago Gowland, Unilever’s then-VP of Global Brand Development & Sustainable Development Strategy, headed a team that launched the company’s Brand Imprint Tool in 2006. Representing several of the company’s functions and external stakeholders, the process began with an evaluation of Unilever’s brands, with a sharp focus on their “impacts” and “influences.” Gowland’s team started with the Dove and Lipton brands and then rolled out the process to include the company’s 13 €1 billion brands. The three impacts, social, economic and environmental (SEE), became more lucid to the team during an “inside-out” inquiry that included both life-cycle and value chain analyses. Concurrently, the team studied the potential “outside-in” effects the company’s brands could have on consumers, market forces and key opinion makers such as media outlets and bloggers, NGOs and government regulators.
Once the team completed those analyses, it could achieve a better understanding of the potential impacts these brands would have in a world confronting massive social and environmental problems. For Unilever, the question was not merely how the company could best respond to the world’s emerging challenges: It was necessary to make the business case for sustainability. In addition, Unilever had to focus on issues offering opportunities for growth, long-term success in key markets, continuous innovation and of course for these brands, a strengthening of consumer trust. The sweet spot for Unilever on that 2x2 matrix (below) was where products that benefited society could also spur the company’s continued growth. The conventional approach towards conducting business for most companies, the pursuit of profits at any environmental or social cost, was no longer tenable. Nor could the company pursue a quixotic course of doing good while losing money — that was hardly a sustainable course for Unilever’s employees and shareholders.
The next challenge was to aggregate, integrate and escalate this Brand Imprint program. Unilever had to match its employees’ core competencies and capabilities with the social, economic and environmental problems the company, its customers and markets faced. At the same time, it was necessary for Unilever to address its consumers’ expectations and demands while not losing sight of its overall business growth strategy. Looking through these four lenses, the result would be a holistic brand strategy that could result in that coveted triple bottom line: people, planet and profit. An effective matching of the company’s greatest strengths and experiences with the world’s most worrisome challenges meant that Unilever would become a driving force for environmental sustainability and social responsibility, backed by 170,000 employees deeply engaged in creating change for the better.
The eventual results, which led to the November 2010 launch of Unilever’s Sustainable Living Plan, ranged from the company’s promotion of life-saving behaviors to its funding and organization of renewed economic opportunities. Examples abound throughout Unilever’s brand portfolio:
- Lifebuoy, a decades old brand of soap embedded in our popular culture, has the potential to teach one billion people how to stop the spread of disease simply by washing their hands effectively.
- Flora and Becel, plant-based margarine products, encourage customers to be proactive about their heart health.
- Lipton improves the lives of farm workers while improving the land on which they cultivate the brand’s tea, through the purchase of more Rainforest AllianceTM-certified tea.
- Suave is tasked with motivating customers to consume less water while using its line of shampoo and body washes.
Unilever has taken a holistic approach towards sustainability challenges by leveraging the strengths of brands, not programs, to strive for that triple bottom line of people, planet and profit. Whether teaching, rewarding or conserving, each Unilever brand now is responsible for a push to change consumer behavior for the better, increase sales and inspire social good over the next decade.