According to the second Progress Report published by the Anglo-Dutch giant, Unilever’s commitment to put sustainable and equitable growth at the heart of its business model is helping to drive increased sales while reducing costs and risks.
Working for sustainable development would have a positive effect on sales. In any case, it is what Unilever claims, highlighting the group’s brands that have made sustainability central to their proposition or product innovation have accelerated sales during 2012.
For instance, says the company, Lifebuoy soap, which has increased its handwashing education programmes, has seen double digit growth in each of the last three years. Similarly, dry shampoos such as TRESemmé and Dove, which result in 90% less greenhouse gas emissions compared to washing hair in heated water, grew by nearly 20% in 2012.
Unilever is also accelerating the integration of sustainability into the heart of many of its biggest brands.
For example Dove, the group’s largest personal care brand with sales of over 3 billion euros, redesigned its self esteem programme for young people in 2012 to further strengthen its engagement with consumers by helping them look and feel their best.
At the same time, eco-efficiencies in Unilever factories from reducing energy, water and materials consumption, as well as waste production, would have enabled the group to take over 300 million euros out of the system since 2008.
The company has also reduced risk at a time of volatility in food commodity prices by increasing its purchases of agricultural raw materials from sustainable sources from 14% in 2010 to 36% in 2012.
“Sustainability is contributing to our virtuous circle of growth. The more our products meet social needs and help people live sustainably, the more popular our brands become and the more we grow. And the more efficient we are at managing resources such as energy and raw materials, the more we lower our costs and reduce the risks to our business and the more we are able to invest in sustainable innovation and brands,” says Paul Polman, CEO of Unilever.
Three big goals
In 2010 Unilever has chosen to put sustainable and equitable growth at the heart of its operations and growth strategy, setting three big goals, all to be achieved by 2020:
1) Help more than a billion people take action to improve their health and well-being;
2) Source 100% of agricultural raw materials sustainably;
3) Halve the environmental footprint of its products across the value chain.
Since the launch of the plan, the group has made significant progress on several of these issues. For instance, Unilever announced to have achieved a CO2 reduction of more than one million tonnes from its manufacturing and logistics operations compared to the 2008 levels. This is equivalent to taking 250,000 cars off the road.
Numerous challenges ahead
Although, to reach its goals Unilever will also have to face numerous challenges.
To that end, helping consumers change their behaviour to live more sustainably is a key factor of success. In the absence of major framework changes by governments, the company is tackling this in a number of ways, from driving habit change through packaging solutions, such as single dose laundry detergent capsules which make it easier for consumers to dose accurately, to working with others such as retailers and civil society organisations to encourage shoppers to make sustainable choices at the supermarket and in the home. In addition, Unilever is leveraging its scale and reach to work with its many suppliers across the value chain to instil sustainable practices.